Definition - What does Loan mean?
A loan is a thing that is lent from one party to another. Typically, loans are sums of money. However, this is not always the case. Oftentimes, the lender charges the borrower interest for the use of the loan. Loans usually have to be repaid. Loans with interest have to be repaid in full plus the amount of the interest.
In the context of the law, many loans are legally binding. Failure to repay the loans can result in default and, sometimes, foreclosure.
Justipedia explains Loan
Parties who offer loans are usually banks. Loans are one way that banks make money. They lend out money to borrowers who repay the loan over time, plus interest. Interest rates can vary from loan to loan and are decided by a number of different factors, including the borrower's credit history.
Many people use loans to help them finance the purchasing of a home. A loan that is used to finance a home purchase is commonly referred to as a mortgage or a mortgage loan.
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