The Scotland youth international moves to the Seadogs to gain experience in senior football, having scored three goals in 12 appearances for Scott Gardner’s side across all competitions this term.
Two of those goals came against senior opposition, underlining the progress McDonald has made while playing for Leeds United's development team.
The winger found the net during a National League Cup fixture away to Boreham Wood before scoring again in the Whites' memorable EFL Trophy victory over Barnsley.
His performances have now earned him the opportunity to continue his development in a first-team environment at Scarborough, where he joins fellow Leeds youngster Harvey Vincent.
McDonald could make his debut for the Seadogs this weekend against Buxton, giving him an immediate chance to make an impression.
The move is intended to provide the young attacker with valuable competitive experience away from the academy environment, while Leeds will continue to monitor his progress during the loan spell.
The club have wished McDonald well for his time at Scarborough as he looks to build on a promising start to the campaign and take another step towards senior football.