Although we are concentrating on monetary loans here, in practice any material object might be lent.
A loan is a debt that is provided either by an organisation or an individual to another entity.
This is usually at an interest rate and evidenced by a contract which will specify the principle amount (the amount of money borrowed), the interest rate and date of repayment amongst other things.
The borrower is obligated to repay an equal amount of money to the lender at some time in the future.
Loans are normally provided at a cost known as the interest on the debt. The interest provides an incentive for the lender to participate in the loan.
One of the principal tasks for financial institutions is to act as a provider of loans.
This can generate a lot of competition between financial institutions to produce the best loan deals in order to entice customers away from their rivals.
Advertising for loan deals has grown rapidly in the last few years.
Advertising media includes billboards, road banners, television, radio, magazines, newspapers and the internet.
There are also comparison websites that allow you to compare the latest and best loan deals.
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