Loans are a kind of debt. As with all mechanisms of debt, loans necessarily involve the redistribution of money over a given period, between the person borrowing the money and the person lending it.
With loans, a borrower receives an agreed sum of money, known as a “principal”, from a lender. The borrower is subsequently obliged to repay the full monetary sum to the lender at a later date. In general, the loan sum is repaid regular installments, or lump sum payments.
However loans do not come free of charge. The costs to the borrower appear as interest upon the debt owed, which gives the lender a reason to lend the money in the first place. In legitimate loan agreements, the obligations and restrictions of any loan are upheld by a contract, which may also put additional restrictions, known as “covenants” onto the borrower.
The following articles provide information about the numerous varieties of loan that are available to borrowers as well as explanations of the terms and conditions they necessarily involve.