In sports, a loan involves a particular player being allowed to temporarily play for a club other than the one he is currently contracted to. Loan deals may last from a few weeks to all season-long.
Players may be loaned out to other clubs for several reasons. Most commonly, young players will be loaned to a club in a lower league in order to gain valuable first team experience. In this instance, the parent club may continue to pay the player's wages in full. Some clubs put a formal arrangement in place with a feeder club for this purpose, such as Manchester United and Royal Antwerp, or Arsenal and Beveren.
A club may take a player on loan if they are short on transfer funds but can still pay wages, or as temporary cover for injuries or suspensions. The parent club might demand a fee and/or that the loaning club pays some or all of the player's wages during the loan period. A club might seek to loan out a squad player to make a saving on his wages, or a first team player to regain match fitness following an injury.
A loan may be made to get around a transfer window. Such a loan might include an agreed fee for a permanent transfer when the next transfer window opens.
Some players are loaned because they are unhappy or in dispute with their current club and no other club wishes to buy them permanently. Examples of this situation include Henri Camara with Wolverhampton Wanderers and Craig Bellamy with Newcastle United.
In the English Premier League, players on loan are not permitted to play against the team which holds their registration (section 7.2 of rule M.6). This can mean that one of the 'big' clubs might loan out a promising young player to an opposing team in the Premiership and then enjoy watching the player do their very best against the 'big' team's rivals, whilst not being available to do any damage to their 'owning' club.