What is a loan & how does it work?

What is a Loan? A loan is a sum of money that one or more individuals or companies borrow from banks or other financial institutions so as to financially manage planned or unplanned events. In doing so, the borrower incurs a debt, which he has to pay back with interest and within a given period of time.

What is a 'loan'?

This educational video, from our sister channel on YouTube – Marketing Business Network, explains what a ‘Loan’ is using simple and easy-to-understand language and examples. A loan is a form of lending, which in finance is usually money. The borrower typically pays back a certain sum each month over a period of years.

What is a term loan?

Term loanDefinition: In general, a transaction in which a legal claim is exchanged for money. The legal claim is typically a contract or promissory note stipulating when and how the money will be repaid. The lender gives up the money and receives the legal claim. The borrower gives up the legal claim and receives the money.