Loan

Loan

Plural Name
Loans
Parent Asset Class

A loan is money, property, or other material goods transferred to another party in consideration for future repayment of the loan value or principal amount, along with interest or finance charges. It may be for a specific, one-time amount, or it can be available as an open-ended line of credit up to a specified limit. A loan can be secured by collateral such as a mortgage or unsecured such as a credit card.

  • Loans are commonly issued by financial institutions, corporations, and governments. 
  • The interest and fees from loans are a primary source of revenue for many banks, as well as some retailers through the use of credit facilities and credit cards
  • They can also take the form of bonds and certificates of deposit. 
  • It is possible to take a loan from a person's 401(k). 
  • Usually, a person's debt-to-income ratio is examined to see if a loan can be paid back.