loan
A loan is a type of debt. According to the dictionary meaning of Loan is
1 - thing lent, esp. a sum of money
2 - lending or being lent
3 - on loan being lent. [Old English]
in Summary that all materials things can be lent.
Lender
Lender is the person who give loans. In simple words he lend the things
according to dictionary Lend meanings are
1 - grant (to a person) the use of (a thing) on the understanding that it or its equivalent shall be returned
2 - allow the use of (money) at interest.
3 - bestow or contribute (lends a certain charm).
Borrower
Borrower is the person who use the loan and return the loan to lender accordingly defined terms and conditions. According to dictionary borrow means
the redistribution of financial assets over time, between the lender and the borrower.
1 - a acquire temporarily, promising or intending to return. b obtain money thus
2 - use (another's idea, invention, etc.); plagiarize
Types of loans (Monitory )
1.1 Secured
1.2 Unsecured
Secured
In Secured loan borrower pledges some asset (e.g. a building or home) as a security for the loan to safe guard the lender.
In secured loan where the borrower offers an asset as collateral to the lender. In case the borrower fails to repay the loan, the lender can take control of the asset.
Example:
Bank Give $ 100,000 loan to ABC Company who pledged their property
in Bank worth $ 150,000. If company is unable to pay bank loan . the
bank will sell their property and get their money back.
Unsecured
Unsecured loans are loans that are not secured against the borrowers assets (Lender has nothing pledged) . Banks prefers to give secured loans but they also provide unsecured loans to the consumers.
packages:
credit card debt
personal loans
bank overdrafts
credit facilities or lines of credit
corporate bonds
Interest Rates on the loan is different depending upon the agreement
between lender and borrower. Some time they have variable rates of
interest