Loans

Warning: mkdir() [function.mkdir]: Permission denied in /home/webs/affiliatelib2/CacheManager.php on line 12

Warning: mkdir() [function.mkdir]: No such file or directory in /home/webs/affiliatelib2/CacheManager.php on line 12

Warning: fopen(/home/templatecore2cache//*cluesnet.com/eb/eb75fc2f22404b05d1963ca71631c694131f3eb6.tc2cache) [function.fopen]: failed to open stream: No such file or directory in /home/webs/affiliatelib2/CacheManager.php on line 130

Warning: fwrite(): supplied argument is not a valid stream resource in /home/webs/affiliatelib2/CacheManager.php on line 131

Warning: fclose(): supplied argument is not a valid stream resource in /home/webs/affiliatelib2/CacheManager.php on line 132

A loan is a type of debt. All material things can be lent but this article focuses exclusively on monetary loans. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the wiktionary:lender and the wiktionary:borrower.

The borrower initially receives an amount of money from the lender, which they pay back, usually but not always in regular installments, to the lender. This service is generally provided at a cost, referred to as interest on the debt. A borrower may be subject to certain restrictions known as loan covenants under the terms of the loan.

Acting as a provider of loans is one of the principal tasks for financial institutions. For other institutions, issuing of debt contracts such as bond (finance) is a typical source of funding. Bank loans and credit are one way to increase the money supply.

Legally, a loan is a contractual promise of a debtor to repay a sum of money in exchange for the promise of a creditor to give another sum of money.

Types Secured A mortgage loan is a very common type of debt instrument, used by many individuals to purchase housing. In this arrangement, the money is used to purchase the property. The financial institution, however, is given security - a lien on the title to the house - until the mortgage is paid off in full. If the borrower Default (finance) on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it.

In some instances, a loan taken out to purchase a new or used car may be secured by the car, in much the same way as a mortgage is secured by housing. The duration of the loan period is considerably shorter - often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer.

A type of loan especially used in limited partnership agreements is the recourse note.

Unsecured These may be available from financial institutions under many different guises or marketing packages:

credit card debt,
personal loans,
bank overdrafts
credit facilities or lines of credit
corporate bonds

The interest rates applicable to these different forms may vary depending on the lender, the borrower. These may or may not be regulated by law. In the United Kingdom, when applied to individuals, these may come under the Consumer Credit Act 1974.

Abuses Predatory lending is one form of abuse in the granting of loans. It usually involves granting a loan in order to put the borrower in a position that one can gain advantage over him or her. Where the moneylender is not authorised, it could be considered a loan shark.

Usury is a different form of abuse, charging excessive interest. In different time periods and cultures the acceptable interest rate has varied, from no interest at all to unlimited interest rates. Credit card companies in some countries have been accused by consumer organisations of lending at usurious interest rates and making money out of frivolous "extra charges" Credit card holders pay Rs 6,000 cr 'extra' May 03, 2007

Abuses can also take place in the form of the customer abusing the lender by not repaying the loan or with an intent to defraud the lender.

See also

Finance, Personal finance, Settlement (finance)
Debt, Consumer debt, Debt consolidation, Government debt
Bank, Fractional-reserve banking, Building society
FAFSA
George D. Sax and the Exchange National Bank of Chicago - Innovation of instant loans
Annual percentage rate (a.k.a. Effective annual rate)
Interest-only loan
Student loan
Payday loan
Refund Anticipation Loan
Federal student loan consolidation
Federal Perkins Loan
Stafford loan
Title loan
Syndicated loan

References

Unsecured and Secured Loans from The Loans Organisation
Personal Loans Loans.org is the best place for personal loans. Personal Loans can be located here: Personal Loans Loans UK There are a wide range of loans available in the UK.

Loans.co.uk | Cheap Personal & Secured Loans | Loan Calculator
Offers consumer loans for any purpose in the United Kingdom.

Loans for Homeowners with Loan.co.uk
Are you a homeowner? Then loan.co.uk can get you the best loans. Here's why... ... The Loan.co.uk Difference Are you a Homeowner in the UK? Then here's why loan.co.uk can get you ...

RBS | Personal Loans
Personal, graduate and homeowner loans with interest rates starting at just 7.4% APR. ... Great rates and a fast service. A loan for almost anything you like. A new car.

Loans - Loans from Barclays - Barclays Personal Banking
Barclays offers customers low APR secured and unsecured loan rates, as well as the opportunity to consolidate outstanding debts. Borrow with Barclays Loans today.

NatWest Personal Loans
At NatWest we offer a selection of loan products tailored to meet our customers' varying needs. ... Updating your car. That holiday you've promised yourself. Or maybe some home ...

Bad Credit Personal Loans from ADM
UK brokers for secured and unsecured personal loans, with secure online application form.

Fool.co.uk - Compare Loans, Find a Secured or Unsecured Loan
Compare personal and homeowner loans at the UK's leading financial community. Find useful information along with all the best loan rates and latest offers.

Loans at Virgin Money - Personal loans and secured loans
Personal loans 7.6% APR typical. Secured and unsecured loans from Virgin Money. Apply online for UK loans.

Find a Loan - Compare Secured and Personal Loans Online Now
Looking for a loan? Get a Free and Impartial Comparison of Secured and Personal Loans at uSwitch. Apply Online Now and Get the Right Loan for you!