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How Do Soccer Loans Work? All You Need To Know

How Do Soccer Loans Work? All You Need To Know

The transfer season is always a busy yet very important part of the world of soccer. Soccer players get to move about from one club to another in search of a better fit for their career at that point in time.

Of course, clubs conduct different transfer businesses based on their budget while trying to balance their books so as not to breach the financial fair play guidelines provided by FIFA and other statutory laws that govern the respective soccer federations.

A lot of soccer players shift from one club to another on a permanent move. The second type of transfer is when players move out on loan to other clubs. What does it mean for soccer players to move out on loan? Let us delve further into that.

What does it mean for a soccer player to be on loan? 

Let us say you borrow money from a financial institution such as a bank. This could be a loan. The most common terms and conditions of a loan is that you will pay back within a specified time. The loan repayment time could vary from one person to another.

Similarly in soccer, when a player moves out on loan, it means that they agree to play for another club for a specified amount of time and they will go back to their parent club at the end of the loan spell. 

Therefore, loan spells are temporary moves that soccer players make and have no say on whether they get to stay at the expiry of the time agreed due to the contractual obligations with the parent club.

Read more: How To Determine The Value Of A Soccer Player?

loans contract

How do soccer loans work?

There are 3 popular ways of soccer loans, which are direct transaction, player for player, and agent orchestrated. Details are as follows:

1. Direct transfer 

When the transfer window opens, two clubs can get into agreement over a player to go out on loan. In this case, they agree on the time whether short term (3-6 months) or a long-term loan (6 months-2 years).

Normally when a parent club agrees to a long-term deal, it is because the player is either too young and needs more time to develop, or the club receiving the player did not want to part with large sums of money at once to secure a permanent deal.

In the latter case, the receiving club agrees to take the player out on loan with the option of buying him or her permanently at the expiry of the loan spell.

Direct transfer on loans in soccer

2. Player for player option

In permanent deals, clubs agree to swap players like Arsenal and Manchester United did in January 2018. United took Alexis Sanchez from the Gunners while Henrikh Mkhitaryan moved the other way on a free transfer. In this case, the weight of the astronomical wages for Sanchez commanded fell on Manchester United.

When it comes to loan deals, a club may approach another with the intention of buying a player. The club that was approached may be unwilling to sell the player but would only agree if they get another player on loan as part of the deal.

This scenario happens particularly when there is not enough time in the transfer window for the club that was approached to replace the player who is sought after.

Player for player option on loán in soccer

3. Agent orchestrated 

Nowadays, a soccer player’s representative or agent plays a pivotal role in the transfer business which is to represent their clients’ interests that may include playing time.

The agent may take the lead to talk to other clubs in order to sanction a move for his or her client away from the parent club. The agent will then argue on behalf of his or her client on why a loan move may be imperative and beneficial to both parties. 

Maybe the club stands to save some money by getting a significant portion of the players wages off their books, or the player may get the sought after match experience and game time when the move materializes.

How many loan players can you have?

Have you ever been curious as to how many players a club can move or receive in a transfer window? If the club has money, can they just purchase a whole new squad and replace the current squad?

Well, there are some guidelines provided on all player transfers to ensure that they fully abide by the same code and timelines provided.

Initially, there were no restrictions on the number of players that could be loaned out or come to a club. However, in early 2020, FIFA made proposals to limit that number to a maximum of 8 players for those aged 22 years and above.

This rule was meant to cover international loan transfers. This means that all those players who came from leagues based in other countries would be affected from the 2020/2021 season onwards.

FIFA’s directive would however not affect local transfers between clubs based in the same country. It would also not affect those players who are below 22 years of age as these loans are the ones that help players in terms of their development.

kid soccer player is practicing

How many loans are Premier League clubs allowed?

The English Premier League is considered the most prestigious soccer league in the world. Internally, they have their own set of rules with regards to loans and transfer of players.

According to the Premier League, there exist some restrictions on how many players Premier League clubs can loan from other Premier League and English clubs.

Teams in the Premier League are not allowed to register more than two players on loan at any time. The teams also cannot have acquired more than one player from the same team on loan within the same transfer window. 

Premier League teams are also restricted to the number of loan deals they can make in the same season. There are two transfer windows, one in the summer and the other one in January of the following year.

They are restricted to a maximum of four players who can be registered on loan in that same season. If a Premier League club has acquired a player on loan or permanently, they cannot loan or sell the player to another Premier League club in the same transfer window.

There are also rules with regards to goalkeeper transfers on loan. A club can only loan a maximum of one goalkeeper to another Premier League. This set of rules shows that the Premier League has even more stringent restrictions as compared to FIFA.

What are the pros and cons of these rules?

Kid soccer players sit together


  1. Promotes transfer fair play

Even with the existence of financial fair play regulations, the biggest soccer clubs still have the advantage of signing the best talent and balancing the books based on what they declare as their revenue.

The loan transfer rules however cut across all the soccer clubs regardless of their financial position and pedigree in the eyes of supporters. In this regard, it prevents a situation whereby bigger clubs have an unfair advantage in the loans transfer business over the smaller ones.

  1. Clubs plan ahead 

Because soccer clubs are aware of these rules and regulations, they are able to plan ahead in terms of the players who will move out of the club and others that will come into the club.

In a way, the restrictions force clubs to make more strategic decisions on the type of transfers they want to buy and the players they feel are surplus to requirements.

  1. Opportunities for some academy players 

The limited number of players who can be loaned out to other clubs may come as a blessing to the up-and-coming players within a soccer club who stay.

When the transfer window is shut, the senior team manager can only pick a new player from the existing academies and youth systems at the club. Therefore, a youngster gets a chance to be promoted to the senior team.

Young soccer players


  1. Blocks youth development 

When a club is restricted to about four players that they can loan out in a single transfer season, it means that a huge chunk of up-and-coming soccer players will miss out on the opportunity to get more playing time in other clubs.

This can greatly affect their development and skills building ambition. Breaking into the senior team may also be a challenge for them as there are limited opportunities to play at the highest possible levels.

  1. Clubs are forced into pursuing permanent deals 

Due to the fact that loan deals are limited in number, clubs may be compelled to look for players to sign on a permanent deal which means that there will be more money required to spend on securing those transfers.

These are critical funds that could have been used in developing other aspects of the club or even securing better deals for existing players.

  1. Dealing with an injury crisis

There are instances where even the top clubs face an injury crisis. For example, if first-team players are injured, where will the club find other top players to replace all those injured?

The youth academy players, who are called upon to fill those shoes, may not possess the same quality as those who were injured. In such a situation, the team’s performance is ultimately affected.

A less stringent system would have helped this soccer club in such a situation as they can get players in without the burden of spending money on securing permanent deals for them.

Soccer player is injured

Can loan players play in the Champions League?

According to UEFA competition rules, a soccer player may not play in the UEFA Champions League for more than one team in the same season. They will be cup tied. There are several exceptions to this rule.

The UEFA Champions League has several stages before the competition proper. They include; preliminary round, the first, second and third qualifying round or the play-offs. If a player is fielded in these rounds, he or she is still eligible to represent a different club in the same season.

Secondly, a player may be eligible to play for another club in the Champions League during the same season if they were substitutes who did not enter the field of play for the parent club. This means that even if they were on the match day squad, they can still play as long as they were never fielded previously.

Unlike in some domestic cup competitions, the Champions League does not have wider restrictions against players facing their parent club. It all depends on the nature of the agreement between the parent club and the club a soccer player was loaned out to.

commitment in a contract

A good example is the case of Brazilian international Philippe Coutinho. He joined Bayern Munich in August 2019 from Barcelona in what was a season-long loan. While still on loan, he came on as a substitute against his parent club Barcelona and scored two goals in an 8-2 demolition.

Can soccer players on loan play against their club?

The short answer to that is sometimes they can. It really depends on the type of competition and the agreement between the player and the parent club which is also communicated to the club to which the player has gone out on loan.

In most major leagues, a player who is out on loan, is free to play all league matches with the exception of facing his or her parent club. The player also becomes cup-tied if he or she represented the parent club previously in the same season.

There are competitions that do not have higher level restrictions when it comes to players out on loan facing their parent club. The UEFA Champions League offers a good baseline argument for this case.

In that competition, players who are on loan are allowed to face the parent clubs. The only stumbling block is the agreement made between the two clubs on whether the player can face the parent club or not.

Can a player be called back from loan?

It is possible for a parent club to recall a player they sent out on loan. Those players sent out on long term loans can be recalled but they will not be allowed to feature for the parent club in that same season.

Sometimes, players who are out on loan can get serious injuries which will keep them out for some time. In this case, it is the responsibility of the parent club to recall them and handle their treatment. Recalled loan players cannot feature for the senior team.

In the event of a contractual issue that forces a player to return back to his or her parent club, there is always the option of terminating the contract to which either party can part with some amount of money for doing so.

Then, the player in question becomes a free agent who can sign with whichever club they wish outside the normal transfer windows as the rules allow that.

Who pays the wages of a loan player?

A deal is made between the two clubs on where the burden of paying wages falls. There are some cases where the player stands no chance of playing for the first team but is given a chance to go develop his or her skills elsewhere.

The parent club will then demand a fee for the loan signing and agree on a payment system where they share the responsibility of paying the player for the duration of the loan spell.

There are cases where the parent club will shoulder the burden of paying the players wages until the end of the season with an agreement in place stating that the other club will sign the player in question permanently at the end of the season.


The transfer business is always a tricky yet critical aspect of running a soccer club. Teams have to find a balance between the players they bring into the club and those they choose to release through loans.

The exercise during transfer windows, be it loans or permanent deals can determine the overall performance and success of a team when all is said and done.

It is not always a guarantee that a loan spell will work out for a player although the hope is that he or she will develop the skills needed as well as get the much-needed play time. There are guidelines and regulations set in place regarding loan deals in soccer.

By far and large, soccer players are not allowed to face the parent clubs either due to contractual agreements when going out on loan or restrictions set by the respective soccer associations for their domestic competitions.

However, there is some leeway for players out on loan to represent their new clubs against their parent clubs. The most important thing is to understand what guidelines have been put in place to ensure that you adhere to the rules.