For me the trouble with loans are it leaves you at the mercy of the parent club, remember when we loaned Clemence(may have spelt that wrong) from WBA , he was surplus to requirement there, came to us on loan , we started moving up the table, he started putting in some great performances, what happened then, WBA recalled him.
Clubs can't actually do that any more, loans can now only be cancelled in a transfer window (a player could still be recalled in January, but I think it has to be done by a certain date, to allow time to replace them).