What is a loan? By loan is meant the right to use something that belongs to someone else or the agreement that gives rise to that right for a certain period of time, that is, a loan. If compensation is paid and the loan does not refer to money, it is often called something else, for example rent, lease or business.
The legal term for borrowing money and other fungible things extends. The term loan does not, according to the same terminology, mean loans with the same amount of money, but loans of items where the lender expects to receive the exact same item back after the loan. When borrowing money (stretching), you are not interested in getting back exactly the borrowed banknotes and coins, but the amount of money you have lent out.
What does a loan mean?
Borrowing money means that you enter into an agreement with, for example, a bank. The agreement is that you borrow a sum of money from the bank and repay the loan with interest.
You may want to lend to a house or car. In order for you to borrow money in a bank, the bank must be able to see that you can repay the loan, that you have the ability to repay. Sometimes the bank also requires a security for the loan. If you borrow money to buy a house or a condominium, the bank wants security in the form of the house or condominium. If you do not repay the loan on time, the bank can sell the collateral. Sometimes the bank requires someone else to join the loan as a borrower in order for you to borrow money. This means that the person is also a borrower and that the bank may require the person to pay the loan. It is not that common anymore that the bank instead requires someone to pay for the loan.
Almost all loans cost.
The cost of the loan consists of interest and fees that you must pay in addition to the borrowed money. It is always important to read through the terms and conditions before borrowing money.