Researchers find optimal way to pay off student loans

After graduating or leaving college, many students face a difficult choice: Try to pay off their student loans as fast as possible to save on interest, or enroll in an income-based repayment plan, which offers affordable ...

Online loans likely to lead to the payday debt spiral

Resorting to the mobile phone for a quick injection of cash is on the rise as more online lenders join the market, a trend likely to lead more Australians into a spiral of debt, says QUT poverty researcher Professor Greg ...

US grabs lead over China in clean energy race

The United States has regained the lead in the clean energy race, investing $48 billion last year to surpass China, which held the world's top spending spot since 2009, said a study Wednesday.

Research shows impact of student debt on small business creation

Small business creation—a critical economic engine—is significantly hampered in areas of the country where residents carry more substantial student loan debt, according to research co-authored by Brent W. Ambrose of the ...

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Loan

A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower.

In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. Typically, the money is paid back in regular installments, or partial repayments; in an annuity, each installment is the same amount.

The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice any material object might be lent.

Acting as a provider of loans is one of the principal tasks for financial institutions. For other institutions, issuing of debt contracts such as bonds is a typical source of funding.

This text uses material from Wikipedia, licensed under CC BY-SA