What is a loan

Today I will show you what is a loan .

In finance, a loan is a debt provided by one entity (individual or organization ) to another entity at an interest rate, and proved by a note which specifies, among other things , the principal amount , date of repayment and interest rate. The loan entails the reallocation of the subject asset(s) for a period of time, between the borrower. and the lender .
What is a loan

In a loan, the borrower initially borrows or receives an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time.

The loan is generally provided at a cost, referred to as interest rates , which provides an incentive for the lender to engage in the loan. In a legal loan, each of these restrictions and obligations is enforced by contract, which can also get the borrower under additional restrictions known as covenants of loan . Although this article focuses on money loans, in practice any material object might be lent.

Acting as a provider of loans is one of the principal tasks for banks. For other institutions, issuing of debt contracts such as bonds is a typical source of funding.

If you want to borrow loans to start up your business , you can contact us . Our interest rate is below 8% .


What is a loan
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