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What Is A Loan?

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Shane Richardson Profile
A loan is where a person (called the borrower) borrows a sum of money of variable amount form another person (called the lender).  It is in effect a type of debt as whatever amount you borrow from the lender you have to pay back usually in regular monthly instalments over a given period of time, anywhere from one to 25 years. 

Loans are used for various reasons, such as to buy a car, home improvements, to go on holiday or debt consolidation in order to pay off existing debts.

Most people who want a loan go to a bank or building society, but there are loans available online as well.  The loans that are to be found online are for people with a less than perfect credit rating and who stand little chance of getting a loan through the usual avenue of a bank or building society.  They are usually for a small amount and come with a very high interest rate and a shorter repayment period.

In order to apply for a loan you must be over 18 years of age, have a bank account and be employed, especially so if you want a loan from a bank or building society.

Loans can be secured or unsecured. A secured loan needs a certain amount of collateral up front whereas an unsecured loan does not.

No matter where your loan comes from it will have a certain amount of interest attached to it so you will end up paying back more money than you borrowed originally. 

Unsecured loans usually have a higher interest than secured loans.

The amount of interest can affect the amount of your repayments so it is important to check them out carefully. With a fixed rate loan your repayments will remain the same every month for the life of the loan. With a variable rate loan your payments will go up and/or down depending on what interests rate do in general. If they go up, so will your payments and likewise should they go down.

It is important that the borrower looks carefully at the loans available and to pick one that suits their individual circumstances as far as amount, interest rates and repayments are concerned before committing themselves.
Muddassar Memon Profile
Muddassar Memon answered
A loan basically is a kind of debt. All types of material articles can be loaned out. Like every debt instrument, a loan involves the redistribution of fiscal assets over a fixed period of time, involving the lender and the borrower.

In the beginning the borrower gets a particular quantity of money from the lender, which they need to repay back, generally but not always in standard installments, to the lender. This service is normally given at a particular cost, which is known as interested charged on debt.

Acting as a source of loans is one of the main tasks for financial organizations. Where as for other organizations, allocation of debt contracts like bonds is a fundamental source of money, and bank loans along with credit are one particular way to increase the money supply.
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Laura Schmid Profile
Laura Schmid answered

Loan is a term used to coin a thing that is borrowed. This is usually in a sum of money borrowed from a money lender or a licensed money lender. Though this is to be repaid with interest. Hope this helps.

Karl Sagan Profile
Karl Sagan answered

A loan is the receipt of money from a third-party company (Bank or other credit institution) at interest. It seems to me that sometimes loans save people from difficult life situations. A month ago I asked zenith quicken loans for help. Honestly, I didn't think it was that convenient. It helped me to solve all financial issues and I quickly closed the debt.

Meg Thomas Profile
Meg Thomas answered

This is something like a credit service. In fact, if you are looking for a way to accomplish this, then I know one pretty good company that can help you. This company is called webmoneyloans. In my opinion, this is your best choice, so try

carlos Striker Profile
carlos Striker answered

It is something given to you temporarily for your use which to be returned with appreciation at certain given time?

John bmn Profile
John bmn answered

You're right, this is a certain type of debt. Having his own business, everyone faces such a problem when the company has no finances and has to close the company or seek additional financing. But I can’t understand one thing. Why do people close their businesses and don’t make loans or do not appeal to investors? After all, there are enough good companies that provide loans. Here my friends recommended me Debt Quest USA . They took a loan and thus were able to save their business. The main thing is to think about all these decisions correctly.

Anonymous Profile
Anonymous answered
Where do I go to to apply for a payday loan so I get it loaded on my pre paid debit card...until pay day I have direct desposit

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