loan

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Loan

Temporary borrowing of a sum of money. If you borrow $1 million you have taken out a loan for $1 million.

Loan

The extension of money from one party to another with the agreement that the money will be repaid. Nearly all loans (except for some informal ones) are made at interest, meaning borrowers pay a certain percentage of the principal amount to the lender as compensation for borrowing. Most loans also have a maturity date, by which time the borrower must have repaid the loan.

A loan may be guaranteed by collateral, meaning that the lender either keeps an asset belonging to the borrower until the loan is repaid or has the right to seize such an asset in the event of default. Often, loans are obtained to purchase a major asset, such as a house. These loans are generally guaranteed by the asset they are used to buy. Lending is a foundational component of capitalism.

loan

the advance of a specified sum of MONEY to a person or business (the BORROWER) by other persons or businesses, or more particularly by a specialist financial institution (the LENDER) which makes its profits from the INTEREST charged on loans. The provision of loans by COMMERCIAL BANKS, FINANCE HOUSES, BUILDING SOCIETIES etc. is an important source of CREDIT in the economy serving to underpin a substantial amount of spending on current consumption and the acquisition of personal and business assets.

Loans may be advanced on an unsecured or secured basis; in the latter case the lender requires the borrower to offer some form of COLLATERAL SECURITY (for example property deeds) which the lender may retain in the event of the borrower defaulting on the repayment of the loan. See BANK LOAN, INSTALMENT CREDIT, MORTGAGE, LOAN STOCK, DEBENTURE, LOAN GUARANTEE SCHEME, INTEREST RATE, SOFT LOAN.

loan

the advance of a specified sum of MONEY to a person or business (the BORROWER) by other persons or businesses, or more particularly by a specialist financial institution (the LENDER), which makes its profits from the INTEREST charged on loans. The provision of loans by COMMERCIAL BANKS, FINANCE HOUSES, BUILDING SOCIETIES, etc., is an important source of CREDIT in the economy, serving to underpin a substantial amount of spending on current consumption and the acquisition of personal and business assets.

Loans may be advanced on an unsecured or secured basis; in the latter case the lender requires the borrower to offer some form of COLLATERAL SECURITY (for example, property deeds) which the lender may retain in the event of the borrower defaulting on the repayment of the loan. See BANK LOAN, INSTALMENT CREDIT, MORTGAGE, LOAN CAPITAL, DEBENTURE, LOAN GUARANTEE SCHEME, INTEREST RATE, SOFT LOAN, BOND.

References in periodicals archive ?
69) the supply of loanable funds curve shifts to the right, from S to Sm, when the central bank expands the supply of loans.
The conventional wisdom among economists is that prolonged deficits will raise interest rates as borrowers are crowded out of credit and loanable funds markets, thus negatively affecting long-term economic growth.
residents chose to save more (for example, due to a change in the demographic distribution over time), the world supply of loanable funds would increase and the world interest rate would fall.
What the South lacked after March 1865 was not currency per se but a set of institutions capable of translating local currency holdings (which formed a major part of the South's meager postwar savings) into corresponding local supplies of loanable funds [Redlich 1951, 118].
Lending sensitivity across banks will also depend on the bank's sources of loanable funds.
For this reason, the base of mortgage credit has broadened in recent years, making the provision of mortgages far less dependent on the condition of any one type of financial institution or on the regional supply of loanable funds.
Intrasweep offers its Demand Deposit Marketplace(SM) (DDM), a product that enables banks to acquire stable deposits to increase loanable funds, send deposits off their balance sheet to generate income, and exchange reciprocal deposits with other banks to maximize their customers' FDIC insurance coverage without decreasing their deposit base.
Two years ago, we had targeted three percent of our total loanable funds to that sector.
For example, the meta-game in the loanable funds market is that when interest rates fall, people will borrow and invest more.
The central bank was behaving reasonably well by central banking standards (though not targeting NGDP), but loanable funds were flooding in from other nations anxious to lend.
The selected input variables are (1) Labor (measured in terms of number of full time employees, (2) Loanable funds (measured as the sum of deposits and borrowings and (3) Physical capital comprises fixed assets and book value of premises at the end of the year.
However, the preceding criticisms do not focus on de Soto's misconception of "capital" and of its source--namely, savings--or consider that titles may only increase the demand for loanable savings in the formal credit market without necessarily increasing the total supply.