All About What is a loan and how does it work? With basics Understanding the different kinds of loans?
All About What is a loan and how does it work? With basics Understanding the different kinds of loans? INDEX of this Post [ hide ] What is Loan? Explain Loan, Define Loan, Meaning of Loan? In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient incurs a debt, and is usually liable to pay interest on that debt until it is repaid, and also to repay the principal amount borrowed. The document evidencing the debt, e.g. a promissory note, will normally specify, among other things, the principal amount of money borrowed, the interest rate the lender is charging, and the date of repayment. A loan entails the reallocation of the subject asset for some time, between the lender and the borrower. The interest provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower