What is Loans: Definition and 87 Discussions

In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that debt until it is repaid as well as to repay the principal amount borrowed.
The document evidencing the debt (e.g., a promissory note) will normally specify, among other things, the principal amount of money borrowed, the interest rate the lender is charging, and the date of repayment. A loan entails the reallocation of the subject asset(s) for a period of time, between the lender and the borrower.
The interest 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 main activities of financial institutions such as banks and credit card companies. For other institutions, issuing of debt contracts such as bonds is a typical source of funding.

View More On Wikipedia.org
Recent contents Top users
  1. B

    Schools Joining the air force reserves vs. borrowing money for college loans

    I am thinking about joining the air force reserves while continuing to attend college because I am no longer able to borrow money for college. I think the air force would be beneficial for me because I think it would be the perfect opportunity for me to developed my research skills in the Air...
  2. B

    Schools Managing College Loans: Tips for Paying Off Debt and Planning for Grad School

    I'm sure most of you have college loans to pay , with the exception of a few students who were offered scholarships or grants. Without getting into specifics , how long does it take most of you to pay off your college loans. tuition at my school cost at least 10,000 dollars a year. I know I...
  3. P

    News Effects of a World Without Loans: Corporate & Street Level

    If people were not able to borrow money anywhere in the world at at any time what would be the effects we would notice on a corporate scale and at street level in people's everyday lives? Will people still need to borrow money in 100 years time - whether in terms of notes or in terms of...
  4. A

    Differential Equation with loans and investments

    [SOLVED] Differential Equation with loans and investments Hello Guys, Basically my problem is that my teacher has taught everything in the chapter that dealth with differential equations, slop-fields, population models, and prey-predator models. However, she failed to teach us how to model...
  5. S

    Calculate Lowest Interest on Different Loans

    Hi all Just wondering if someone could help me out this... I have two loans of differing amounts and interest rates. I have x amount of dollars that I want to pay on each loan to achieve the lowest possible interest payable. How can I work it out?
  6. G

    How does refinancing student loans work?

    God how I love how they never teach you personal finance in high school or even college and having to learn it on your own. Anyway, I am looking to refinance some private student loans that I have. The ones that I have now have variable interest and are at 8.75% right now. Now I am only 2...
  7. W

    Finaid Loan Amount: Calculate What You Need

    Ok I am trying to figure out how much money I should take out for a loan(private). I took my total tuition and subtracted personal expenses and books(I can afford those), then subtracted how much I took out for my stafford. The thing i can't decide on is do I stubract my work study?
  8. I

    What do to do with these loans?

    I am entering my senior year and I will be getting more financial aid that I need. The problem is I don't know what to do with the extra money. See I owe about $4500 in students loans dating back to my freshman and sophomore year. It's not a lot of money at all, and I could pay it off all in one...
  9. Ivan Seeking

    Loan me money today and I will gladly pay you back yesterday

    http://seattlepi.nwsource.com/local/319367_timeguy12.html
  10. S

    Graduated with a BS in Physics with terrible GPA. What next? help?

    So like the title indicates, I graduated with a terrible GPA (2.6) and no papers published and no research experience in December. It took me 5 1/2 years instead of 4. I could go into how this happened but I doubt it is relevant to either you all or potential employers. Since I graduated I've...
  11. V

    Programs Interruption in BSEE transfer degree, what to do

    Hi, so I went to community college and got an AS engineering transfer degree, transferred to an expensive private university and completed 1 year there. This summer, during my internship, a family situation came up that requires me to move to Arizona. Also, I got an inheritance from my grandpa...
  12. N

    Matrix multiplication, P1.1.1 Golub/Van Loan-Matrix Computations 3rd

    Hi, I am studying linear algebra from Golub G.H., Van Loan C.F.- Matrix Computations 3rd edition. This book is somewhat old now, but I find it rather comprehensive. I want to study all chapters and answer all problems appear at the end of each section. Here is the first problem from the first...
  13. L

    Astrophysics Questions: Answers For Students Pursuing AP

    Hello, I'm currently in my senior year finishing a Finance degree but have come to the realization that I should follow the career path I would actually enjoy rather than simply getting a job and starting a 9-5 life. However I have a few questions on my mind and if anybody could help me it would...
  14. F

    Career in Physics(limited money) help

    Hi and thank you for reading this, I live in Canada and will soon be going for my last year in high school, and I really want to pursue a career in physics, I've wanted this for a long time(5 years). Physics just intrigues me, and I'm quite good at it, but my family's income isn't that great...
  15. QuantumCurt

    Schools How important are different schools for undergrad and graduate degree?

    Hey everyone, I'm currently attending a community college, and heading into my last year here. I'm starting to fill out my transfer applications, and I was wondering how important it really is to attend different universities for your undergraduate and graduate degrees. I've always heard that...
  16. G

    Graduate work in Particle Theory and Biophysics ? Possible ?

    Hi, I am starting graduate work next fall in biophysics, mostly simulations. It's not that biophysics doesn't appeal to me, but my primary interests are in particle theory. Eventually, I would want to learn qft, gr, geometry and topology, the essentials for understanding superstring theory...
  17. Z

    Studying in Germany and then coming back to the US?

    Hey everyone! I'm going to be a college freshmen this year. I will be doing at least one year of college in the US, I am going to Rhodes College. However, it is rather expensive for me (even with scholarships, I need to take out about $20,000 in loans per year). That amounts seems like it will...
  18. Ritzycat

    Going to school for chemical engineering

    Hello friends. I am an incoming high school senior this year, and of course, the college application process is just around the corner. Despite my harsh troubles with Honors Chemistry last year, it was my favorite class. I am naturally a math & science oriented person, so I know this is the...
  19. H

    Engineering Taking on 120k of debt for engineering school EE or Aero worth it?

    Hey guys I've gotten accepted into RIT Rochester Institute of Technology for electrical engineering and Embry Riddle for Aerospace engineering. I'm a non traditional student aged 28 with a BA in Econ who always had a passion for engineering. I am still making up my mind between EE or Aero. I...
  20. B

    Java Can't make natural logs work in java?

    I'm trying to learn java. So I'm practicing what I've learned so far by making a calculator to do formulas I learned in my finance class. But it's not working right now. case ("loan length"): Scanner inp_ll = new Scanner(System.in); System.out.print("What is the monthly...
  21. A

    College Loan Repayment Optimization Pt.1

    My Goal: to find what fraction of my monthly payment should go to each loan. The ideal outcome would be to pay the debt as fast as possible. I have several loans, but for now, I want to start with a simple exercise of one loan that accrues monthly interest and one fixed monthly payment for that...
  22. Cygnus_A

    Credit Union or Big Bank: Which is Better for Managing Your Money?

    What do you guys think about the advantages/disadvantages of being at, say, BofA vs being at a local credit union? For a savings account and for loans, it seems that credit unions take the cake with their low interest rates and (relatively) bigger returns on savings. But for getting a...
  23. L

    How essential is programming for BS degree holder?

    Hey guys, I am graduating in about a month or so. I have applied to only a few graduate schools due to financial problems, but i was just rejected from my first school earlier this week. I am starting to worry that i won't get into graduate school this year.. I have some subsidized loans out...
  24. P

    Postgraduate studies in Particle Physics or Radiation Physics?

    Hello Everyone! I have a huge dilemma this period.I'm searching/applying for masters but I've not yet quite come to a conclusion regarding the field.For example,I love particle/nuclear physics but I also like radiation physics and radiation biology.My undergrad thesis was on radiation biology...
  25. O

    Problems w/ REU: Unfair Application Process?

    Hello, I applied to REUs for the summer, and was happy when I got accepted to one. Now I feel like the school has ambushed me and lied to me. When I applied, I was told that if accepted, I might have to send in my transcripts, which seems true for any college. Now I am being told that I have...
  26. A

    Which school for master's in EE and related career questions

    Hey my name is Abdelrahman I've just graduated this year with a B.S in Electronics and Communication engineering (Egypt) which is basically the regular US EE track but with a special focus on digital and analog circuit design, communication systems and DSP. The problem I'm facing right now (or...
  27. W

    Paying for Masters in Physics Secondary Ed.?

    Hi all, I've applied and been accepted to graduate programs in secondary education in physics/math. I will have a B.S. in physics by May, so the graduate degree is to give me the credentials to be certified to teach. My question is, do any of you know of scholarships or other ways that I can...
  28. D

    I no longer enjoy physics and I don't know what to do

    I've struggled a lot in the past two years about whether or not I wanted to stay in Physics. Last year I graduated with my Bachelors and immediately started at a university to get my PhD. I didn't like the program for various reasons, so I took "an absence of leave" because I got a research...
  29. C

    Social changes caused by high level of surveilance

    I think about consequences of implementing insane amount of transparency within society. I mean not a case of merely Big Brother, but a case where practically every citizen can search for any information about other citizen. Simply a post privacy era, where: -except maybe in wilderness every...
  30. 2

    Any benefit to a Mech Eng. learning CNC machining?

    I graduated 18 months ago with my BSME degree and currently work full time as a Mech. Engineer. I enrolled in night school at a local community college to take a CNC machining certificate course this spring. The course is 2 semesters long and focuses on opereation of CNC equiptment mostly lathes...
  31. A

    What is the expert consensus on the Rolling Jubilee project?

    I am looking for the opinion of an expert in economics on the Rolling Jubilee project. If you do not have any formal education in economics, I would kindly request you to please make clear that your opinion is layman speculation. Website: http://rollingjubilee.org/ Warning: layman...
  32. A

    How to Write an Effective Appeal Letter for Academic Dismissal?

    Hi. I was recently convicted of academic dishonesty and dismissed from the university. However, the dean has given me a chance to present my case. I do not wish to contest the charges. I made a mistake. I wish to apologize and humbly request for a second chance. Please read my letter and give...
  33. E

    Using student loans for one semester - necessarily a bad decision?

    I asked this in the career thread so before ti gets pointed out I would like to note I realized this, but since this forum may have a different set of respondents who read these forums, i figured I would ask it here too. So more about my situation: I am now in the process of completing a...
  34. PhizKid

    Can Private Student Loans Bridge the Gap for Community College Transfers?

    I am attempting to transfer from a community college. After factoring in the Pell grant, state financial aid, maximum federal loans and work-study, none of the schools I've been accepted to are offering enough aid for me to attend. Even though I am an independent student with no credit, is there...
  35. I

    M.Sc Astrophysics, my prospects

    Hey, I guess recently I've been trying to think (read: stressing over) about what in the world I could do with the rest of my life once I finish this M.Sc in computational Astrophysics. I need something that won't keep me bogged down in a cubicle running a 9 to 5, I'll hate my life (having...
  36. A

    MHB How to approximate IRR with simple formula for two loans of different terms

    I am trying to make a simple formula to approximate the IRR using the IRR of each loan, their respective term and loan size. i.e. loan one is $\$1,000,$ has a term of $10$ years and an IRR of $5\%$. loan two is $\$100$ has a term of $1$ year and an IRR of $15\%$. Using a simple weighted...
  37. T

    What is Usury and How Does it Affect Our Economy and Morality?

    Could someone explain to me what is the deal with the usury or interest on loans stuff?Some people claim that it is immoral to claim usury(interests)on loans, while others have no problem with that. If we had no usury in our day to day banking in what way would our lives and economy be...
Back
Top