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.

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  1. hagopbul

    Asking for advice about filing for a patent on a new device

    Hello All : i uploaded some threads here asking about patent on engine modification , as i looked more in the discoveries , found out that it is already , discovered , but came up with another system to improve the energy efficiency (theoretical , experiment and a make shift prototype ) , now...
  2. M

    MHB Optimizing Loan Interest Rates: Solving for Loan Length

    The problem: Lending companies often offer better rates when you borrow a larger sum of money for a shorter period of time. A borrower is offered a loan of \$10,080 at 10% and a loan of \$7000 at 12%. If the larger loan is 6 mo shorter but the total interest payed is the same, find the length of...
  3. Shakattack12

    Calculation for Finance and Loans

    Homework Statement We are asked to calculate the comparison rate of an offset loan. Loan amount = $735000 Offset amount = $100000 Original term length = 300 months Offset term length = 254 months Original repayments = $4228.50 Adjusted Repayments (for comparison rate) = $4224.57 Total amount =...
  4. S

    Other Help Non-traditional student planning to study astrophysics

    Hello, I am an MBA graduate from India, currently working at a private company. I am single and I belong middle income group. I discovered my interest only after completion of my postgraduate degree. I am so much passionate towards astrophysics and astronomy. I am 27 years old now, and I am...
  5. Ritzycat

    Undergrad student loans for PhD

    Hi friends I am a high school student and I'll be going into college next year. I will likely be attending Grinnell College, with the initial intent of majoring in physics. (I do not need the talk of possibly changing interests, I realize that; I am planning for all possible outcomes) It is of...
  6. W

    Schools About to take out my first loan for college

    Ok so I about to take out my first loan for college- a big one. But I figure that I am in engineering I will be making quite a bit of money and won't have to worry about it. What are your experiences with loans? Advice?
  7. G

    Is paying off student loans a never-ending cycle?

    So for the first time I took a look at the details of my monthly student loan payment info and found out that of the roughly $320 I pay every month for my student loans $200 of that money goes to paying off the interest! How exactly is this legal? Why can't I pay off all the principal first...
  8. P

    Schools How do student loans work for grad school?

    I got a federal subsidized loan and had to take out extra via Sallie Mae. Ummm... how does that work with grad school? I admit I was dumb enough not to ask when I was applying, but they said you have 10 years to repay, so I thought you wouldn't start repaying until you were completely out of...
  9. A

    Schools Can I get a loan for university in Canada?

    I live in Canada. I want to take a loan from the bank for university because I don't want to go to university in my home town. How do I go about doing this? Do I have to give up anything in order to do this. Could you help me.
  10. D

    Debt Repayment Strategies for Graduate Physics Students

    First of all, I would like to thank all of you who post on these forums. I've been reading it thoroughly ever since my first post here, and have found a wealth of information. It has helped me a lot. Especially ZapperZ's wonderful "So you want to be a physicist" guide. My question is...
  11. J

    Schools Finding a 9000 Loan for University

    Hello all. This fall will be my first semester at a University, and can not figure out how I should take out loans. My parenst are not going to pay for anything, and will not take out loans in their name either. I have to take out all the loans in my name. My school has offered me one student...
  12. T

    Loan $500 to Jr Evo - Pay for Trip

    Evo forgot the payments for a trip think I should loan some money to Jr evo...a round 500 dollarx?
  13. check

    Student Loan Ques: Investing Excess Money for Future Repayment?

    I’m starting school in September and I’ll need to apply for a student loan soon. I’ll be going to a university in Ontario, Canada. Anyway, I’m not sure how much to apply for because I have a bunch of scholarship applications still pending approval, so I think I might just apply for the max and...
  14. S

    Can undocumented students apply for private student loans?

    Can undocumented students get private student loans? I'm a senior and I want to apply to colleges but don't know what college is best for me. I'm applying to MIT, Boston University, MSOE, Worcester Polytechnic Institute. But can someone recommend me a few other no loan colleges that have strong...
  15. C

    Programs US - where to get loan for Masters degree?

    hello, where can i get loan for masters degree. i know some companies like discover give loan for graduate study but I'm curious what better options i have. is it too late to fill fafsa and apply for federal loan?
  16. denjay

    Graduate Fellowship? (financial aid/loan question)

    Not sure if this is the right place for this question but this seems the best place to me. So after I graduate (with a Bachelor's degree) my loans require repayment after a 6 month grace period. One option I have with that is to defer the loans (make it so I don't have to pay back right away)...
  17. J

    Loan financing algebra question

    Hey guys. Thanks for reading. I haven't done any regular algebra in a long time and feel like I am just too rusty to see something that I should be seeing. I am weighing the option of buying a house vs. renting for a year and then buying (giving me a larger down payment and a better apr on the...
  18. K

    Philosophy, Electrical Engineering, Jobs and Loans

    I currently have a BA in Philosophy from 2008 and am interested in getting an MS in Electrical Engineering. Are the loans worth it? Does the salary typically outweigh the cons of the loans? How is the employment out there for electrical engineers? Does anyone have any idea as to how my BA...
  19. J

    Programs Student loans for an EE major question

    Hey guys, so my parents just recently decided that i need to move out. Now they originally said that they would take care of all my tuition fees as long as i paid for my living expenses. I was told by my adviser that it really wasn't a good idea if i worked more than 10 hours a week in order to...
  20. V

    Graduate assistantships and defaulted loans.

    Hello, I'm a permanent resident of the US and some years ago I began my studies in a US university on grants+loans. After my first year, I found myself in a terrible financial and living situation which forced me to move back to Europe and I ended up defaulting on my school loans (under $5k)...
  21. M

    Managing Student Loans: Balancing Need and Responsibility

    Did you take it (or are you taking it) in college and if so, then how much? And would are you thoughts about paying it back with small grad school/post doc etc salaries?
  22. PhizKid

    Options for continuing education with inability to take out loans

    For my first year at community college I was short ~$600 since financial aid didn't cover all my expenses, so when I went to multiple banks to see if I could take out a loan, they all labelled me as a credit liability because I didn't have any credit nor a job at the time. I had to borrow the...
  23. Math Is Hard

    Is Technology the New Antiques Market?

    I want to buy this owl lamp: http://www.ebay.com/itm/Antique-collectible-one-of-a-kind-lighted-OWL-rare-piec-/120654099625?pt=LH_DefaultDomain_0&hash=item1c178b74a9#ht_2141wt_122
  24. C

    Where Does the Money for European Countries' Loans Come From?

    Due to the credit crisis some European countries have asked for external help provided by a Troika constituted by the European Central Bank, International Monetary Fund and European Commission. In the loans that the Troika is giving to countries like Portugal, Ireland and Greece, where does the...
  25. W

    News Student Loan Bubble: Bursting or Bailout?

    I'm a little behind on this topic. Will there be a student loan bubble burst? What consequences does that carry for students and everyone else? I don't understand why there would be a bailout? This might sound a bit idealistic, but could they stop collecting debts with percentage until a student...
  26. J

    Deriving a differential equation for a loan/interest problem

    Homework Statement You borrow money from a friend at a continuous interest rate of r% per month. You want to pay your friend back as quickly as you can at the beginning, but reduce your payment rate over time. You decide to pay off at a continuously decreasing rate given by K₀e^{-at}, in...
  27. 3

    Low tier + no debt or top tier + loans?

    Hey everybody! First post here, love the forum/site. I'm seeking some college advice. I live in North Carolina, and have been accepted into Western Carolina and NC State for electrical engineering. I'm trying to figure out which to attend. WCU was only my backup school (close to my house)...
  28. K

    Federal & state education loans: is the government 'doing it wrong'?

    I recently had a friend pop up on my news feed with a link to a promo video, with the video saying that the US should forgive student debt on the basis that the (former) students won't be able to pay it back without basically crushing them financially. It kind of got me thinking about how...
  29. K

    What are typical private student loan rates?

    Hello all. I would like to know what an average number for a private student loan (e.g., from Wells Fargo, etc.) interest rate would be right now. Ballpark would be great. I have tried googling but just got walls of information without any real numbers. Are we talking under 5%? 5-10%? More?
  30. K

    Calculate Equivalent Loan Rate: $1,598 @ 6.8% & $6,680 @ 3.8%

    Hi guys, it's 3 AM so don't judge me. I'm doing some accounting work with my student loans and I want you to confirm something for me: If I have two loans: $1,598 @ 6.8% F-APR $6,680 @ 3.8% F-APR Then the 'equivalent' single loan would be: $8,278 @ 4.38% F-APR Correct? I used a...
  31. J

    Does anybody know how student loans work if you go to grad school?

    I just finished my first year as a math/chem. major and have been toying with the idea of going to grad school right after undergrad to go for a PHD.(Not sure if I want to do applied math or physical chem, yet). My question is though if you go to grad school, will your undergraduate loans be put...
  32. R

    Early repayment of a loan compounded daily

    An amount of $5,000 is due on August 22nd of a leap year. What amount will settle the debt on February 5th of the same year? Assume that interest is compounded daily and use the Banker's Rule. Please help I do not even know where to start other than the Banker's rule is exact time and...
  33. I

    How much was/is YOUR student loan

    ...and how many years did it take/will take to pay back? I'm at a point in my life where I will soon be taking student loan for my studies, but the idea of taking a "huge" amount of money frightens me! Share your experience!
  34. M

    Studying Will studying math and physics leave me with insurmountable loan debts?

    I've heard stories about people who have loan debts of at least $100.000. I'm going to study mathematics in about 1 and a half years and I'm eventually planning to obtain a Ph.D. I don't know exactly how expensive this is all going to be, but with my capital and the restricted financial support...
  35. N

    How are interest payments on IMF loans apportioned among member countries?

    Hello! Not sure of this is the right place for this question, but here it is anyway: It concerns the International Monetary Fund, I was wondering how the interest on IMF loans are apportioned. I suppose a consideration of how loans are provided is necessary. For example, I do not know if all...
  36. H

    Diffe equation loan problem

    Homework Statement # 39 on page 36, specifically part a and case 1...
  37. C

    Student Loan Debt: Is It Worth It to Go to a Better School?

    Post is kinda lengthy, thanks for reading though. For starters, I'm from las vegas, so i could go to university there, however, i will be attendting the u of minnesota-twin cities, which is a very good school for physics. If I go to university in las vegas than when i receive my bachelors...
  38. M

    How can a lender make more money if you don't pay off your loan early

    or pay a prepayment penalty? Il
  39. L

    Where Can I Find Low/No Interest Student Loans?

    I've never had a student loan before, but I just looked at one and the interest was ridiculous. You end up paying more than twice the amount you received. Is there, by any chance, a place that offers student loans at no interest, or very low interest? Thanks.
  40. Char. Limit

    Does anybody lose as a result of the student loan changes?

    I saw this snippet in a newspaper today: When I saw this, I didn't feel remorse for the banks. I almost laughed out loud. Then I worried that I was laughing at the suffering of others... Then I remembered that the "others" were banks, and I felt happy again. Has anyone exhibited similar...
  41. S

    Get Answers to Private Student Loan Questions

    I have never gotten a student loan before so I have several questions that some of you might have the answers to. I'll be finishing up community college this fall and planning to enroll into 4 year school right away in spring. I need a loan to finance it. For various reasons, I am not eligible...
  42. N

    Interlibrary loan at your university

    I was wondering if anyone of you were able to access your interlibrary loan at the university that you attended long after you graduated from the university that you attended; I was able to access to the books at my library but not the interlibrary loan service at my university. I asked why...
  43. xortan

    Student loan vs Student line of credit

    Hey I am in a really sticky situation. Here is the low-down. I was living with my dad (parents are divorced) and I asked him 2 months ago to do the parent part of the student loan and the other day when I asked him he went off the deep end and actually kicked me out of the house :S now I am at...
  44. N

    Loan with equal annual repayments

    I was undertaking the following problem: A man takes out a 5 year loan for $10,000 with an annual interest of 8% with equal annual repayments. How much must be paid each year? I'm stuck as to where and how to start. Is there are particular equation which I should be using? Thanks
  45. F

    A few Private Loan Questions

    It looks like for the next school year I will need ot take out a private loan to cover living expenses. My first year I went to a community college and was able to afford (and save a bit) tuition and living expenses by working part time and in the summer. This previous year I depleted my saving...
  46. P

    Quick question about Stafford loans

    I am analyzing my payment options for my last year of college and I just wanted to confirm this: You do not have to make payments for your undergrad Stafford loans if you are enrolled as a full-time student in a PhD program--right? In other words, interest may accumulate, but I would not be...
  47. S_Happens

    Student Loan Freedom Achieved: How I Paid Off $25,000 in Just Over 2 Years!

    Paid off my student loans! Not 100% accurate, but I did file for a final payment submission for next week and my paycheck clears this weekend. I'm too excited to wait until then. FREEDOM! :cool: :eek: :!) All in all it was a little over $25,000 since I started paying in Feb. 2007. My goal...
  48. W

    Grad Student Loans: Tuition Waivers & Stipends for Ph.D. Programs

    So, for essentially every physics program in the U.S. (including the one I'm about to start at =), you get a tuition waiver and a reasonable stipend for the hours that you put in, but it's less hours than I'm used to. So essentially, I would dread having a TA appointment, a full graduate...