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What is Loan
The loan is a provision of cash or something else for a predetermined period of time.

The loan is a provision of cash or something else for a predetermined period of time. The loan arises between two persons - individuals or organizations (legal entities). The one who borrows is referred to as a creditor (or lender) a person who borrows a debtor. (or borrower).

How works a loan in practice?

Loan arises debt between the creditor and the debtor that the debtor has to repay. In addition to this pays an interest. There may be interest-free loans as well. The loan may arise on the basis of oral or written agreements. The legislation of developed countries regulates conditions for providing loans so that the outstanding loan or other non-compliance acting has legal consequences.

When providing loans are important to the following requirements:

  • The way of providing (how the loan is passed)
  • Subject of the loan
  • Time period of the loan
  • Reward (interest)
  • The way of repayment of the loan (how the loan is returned)

Related terms and methods:

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Last update: 28.06.2015

Comments

Ricky Garcia 4 months

Personal loans can be a relatively simple way to secure additional cash. One excellent use of a personal loan is to pay off high-interest debt, such as credit card debt. If you can get a personal loan at an interest rate of 7 to 10% and use it to pay off credit card debt that carries a 19 to 26% interest rate, you will improve your overall financial situation. And in order to find the best online loans, you can find special sites with reviews on lenders.

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Lawrence Fields 3 months

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