What is Loans
what is a loan a loan is something that we have borrowed usually in the form of money or property we eventually pay back the money with interest a loan is a form of credit it can be for a one-time amount or in the form of open-ended credit when someone borrows money we call the amount they borrow the principal the borrower pays the principal back in regular payments. what is a loan
that is in installments the loan agreement specifies when to make the payments and how much they should be the interest that the borrowers pay annually on the amount of their loan is the apr stands for annual percentage rate before signing any agreement with your bank or another lender it is important to find out what the apr is according to the financial time’s online dictionary a loan is money lent that is provided by a lender to a borrower normally in return for interest and repayable at a specific date also the act of lending something
especially money what is a secured loan this type of loan is secured by an asset that is collateral if the borrower fails to pay back the money the bank may seize the collateral examples of secure loans include a mortgage or auto finance if the borrower fails to repay the money the lender can seize for example the person’s house or their car unsecured loans are not secured by assets if the borrower defaults the lender cannot recover the money
for the bank unsecured lending is riskier hence interest rates are higher examples of unsecured loans include credit cards student loans and personal lines of credit millions of people and businesses take out loans every year worldwide if you are thinking of borrowing money do some research before you commit yourself check out what the abr is whether there are any penalties and other clauses you
