Get Basics Basic Loan Features

A loan is a form of debt incurred by an individual or other entity. The lender—usually a corporation, financial institution, or government—advances a sum of money to the borrower. In return, the borrower agrees to a certain set of terms including any finance charges, interest, repayment date, and other conditions.

What are the 5 Cs of credit? Capacity. To evaluate capacity, or your ability to repay a loan, lenders look at revenue, expenses, cash flow and repayment timing in your business plan. ... Capital. ... Collateral. ... Conditions. ... Character.

A loan is a sum of money that one or more individuals or companies borrow from banks or other financial institutions so as to financially manage planned or unplanned events. In doing so, the borrower incurs a debt, which he has to pay back with interest and within a given period of time.

Loan Basis with respect to any Financial Asset means the cost basis of amounts paid in cash for such asset by any Borrower, minus principal payments made after the acquisition of such asset, minus amortization permitted or required under GAAP, and shall not include unearned interest, commissions, discounts, dealer ...

Loans come with different features that can change the security of the loan, the payments on the loan, and the interest rate of the loan. The main features include secured versus unsecured loans, amortizing versus non-amortizing loans, and fixed-rate versus variable-rate (floating) loans.

Loan terms refer to the terms and conditions involved when borrowing money. This can include the loan's repayment period, the interest rate and fees associated with the loan, penalty fees borrowers might be charged, and any other special conditions that may apply.

Key Takeaways. A loan is when money is given to another party in exchange for repayment of the loan principal amount plus interest. Lenders will consider a prospective borrower's income, credit score, and debt levels before deciding to offer them a loan.

What are the 5 Cs of credit? Capacity. To evaluate capacity, or your ability to repay a loan, lenders look at revenue, expenses, cash flow and repayment timing in your business plan. ... Capital. ... Collateral. ... Conditions. ... Character.