In finance, a loan is a debt evidenced by a note which specifies, among other things, the principal amount, interest rate, and date of repayment. A loan entails the reallocation of the subject asset(s) for a period of time, between the lender and the borrower.
In a loan, the borrower initially receives or borrows 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. Typically, the money is paid back in regular installments, or partial repayments; in an annuity, each installment is the same amount.
The loan is generally provided at a cost, referred to as interest on the debt, which 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 under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice any material object might be lent.
Acting as a provider of loans is one of the principal tasks for financial institutions. For other institutions, issuing of debt contracts such as bonds is a typical source of funding.
Read more about Loan: Loan Payment, Abuses in Lending, United States Taxes, Income From Discharge of Indebtedness
Other articles related to "loan":
... joined Football League Championship club Derby County on a three-month loan ... Vaughan was however subsequently recalled from the loan following surgery on a slight tear in his cartilage ...
2003–04 season, also spending time on loan at Oldham Athletic ... He spent part of 2004–05 on loan at Torquay United, before returning on loan at Oldham ... His loan deal was made permanent in the summer for a £50,000 fee, though he did not find success in the 2005–06 campaign ...
... Although a loan does not start out as income to the borrower, it becomes income to the borrower if the borrower is discharged of indebtedness ...
... to ever hold down a first team place and was sold to Stoke City in 1996, after a short loan spell at the club, for £250,000 ... He joined Sheffield Wednesday on 21 September 2007 on a loan deal to regain his fitness where he played seven games, scoring one goal against Watford on 2 October ... on 31 January 2008 Kavanagh again joined Wednesday on a loan deal until the end of the season ...
14 July 1988) is an English footballer who plays for Huddersfield Town on loan from Norwich City ... He played for the club between 2005 and 2011, including loan spells at Derby County, Leicester City and Crystal Palace, before signing for Norwich in May ... As of August 2012 he is on loan at Huddersfield Town ...
Famous quotes containing the word loan:
“... the ... thing I am proudest of in my whole business life is that I do not take, that I never took in all my life, and never, never! will take, one single penny more than 6% on any loan or any contract.”
—Hetty Green (18341916)
“Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
This above all: to thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.”
—William Shakespeare (15641616)
“Slight was the thing I bought,
Small was the debt I thought,
Poor was the loan at best
God! but the interest!”
—Paul Laurence Dunbar (18721906)