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| What is a Loan?
Loan is an amount of money or property what is given to another party for the time being which is payed back with interest. The creditor might ask for collateral to be put and only after that grants the loan. The loans are usually regulated by law like what is the max amount, the minimum time until the borrower has to pay, the highest interest what can be charged.
For example you need an X amount of money for personal use, now you turn to a creditor who'll give you the desired sum. This temporary money what you receive plus the interest you pay for using the money it's called a loan. Loans take different shapes and sizes from banks to persons or institutions. There are laws which regulate the granting of loans. The contract what you sign states a couple of things like what type of interest you pay fixed or variable, how you'll pay back the loaner in one single amount or in periodic payments, also the time you have available until you have to start paying back. | | | | |
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