Synonyms for loan
• time payment
accommodation, trust, advance, permission to borrow, investment, giving credit, mortgage, advancing, time payment
Synonyms of LOAN
• advance, lend
• Words Related to LOAN
• furnish, give, grant
• lease, let [chiefly British], rent
• Near Antonyms of LOAN
• receive, take
• Antonyms of LOAN
give temporarily; let have for a limited time
SENTENCE EXAMPLES OF LOAN SYNONYM
• Will somebody kindly loan me a hat?
• Only a few more trips and the loan on the ranch would be paid.
• At least this way she had no loan payments – no set business income to meet every month.
• If you decide to participate in the loan, you can kick in $25 or more.
• Railway rescission loan of 1901 Port works loan of 1903.
What is a Loan
A loan is money, property or other material goods that is given to another party in exchange for future repayment of the loan value amount along with interest or other finance charges. A loan may be for a specific, one-time amount or can be available as an open-ended line of credit up to a specified limit or ceiling amount.
BREAKING DOWN Loan SYNONYM
The terms of a loan are agreed to by each party in the transaction before any money or property changes hands. If the lender requires collateral, this requirement will be outlined in the loan documents. Most loans also have provisions regarding the maximum amount of interest, as well as other covenantssuch as the length of time before repayment is required. A common loan for American consumers is a mortgage – a loan taken out to purchase a property.
Written or oral agreement for a temporary transfer of a property (usually cash) from its owner (the lender) to a borrower who promises to return it according to the terms of the agreement, usually with interest for its use. If the loan is repayable on the demand of the lender, it is called a demand loan. If repayable in equal monthly payments, it is an installment loan. If repayable in lump sum on the loan’s maturity (expiration) date, it is a time loan. Banks further classify their loans into other categories such as consumer, commercial, and industrial loans, construction and mortgage loans, and secured and unsecured loans
Types of Loans
Personal loans – You can get these loans at almost any bank. The good news is that you can usually spend the money however you like. You might go on vacation, buy a jet ski or get a new television. Personal loans are often unsecured and fairly easy to get if you have average credit history. The downside is that they are usually for small amounts, typically not going over $5,000, and the interest rates are higher than secured loans.
Cash advances – If you are in a pinch and need money quickly, cash advances from your credit card company or other payday loan institutions are an option. These loans are easy to get, but can have extremely high interest rates. They usually are only for small amounts: typically $1,000 or less. These loans should really only be considered when there are no other alternative ways to get money.
Student loans – These are great ways to help finance a college education. The most common loans are Stafford loans and Perkins loans. The interest rates are very reasonable, and you usually don’t have to pay the loans back while you are a full-time college student. The downside is that these loans can add up to well over $100,000 in the course of four, six or eight years, leaving new graduates with huge debts as they embark on their new careers.
Mortgage loans – This is most likely the biggest loan you will ever get! If you are looking to purchase your first home or some form of real estate, this is likely the best option. These loans are secured by the house or property you are buying. That means if you don’t make your payments in a timely manner, the bank or lender can take your house or property back! Mortgages help people get into homes that would otherwise take years to save for. They are often structured in 10-, 15- or 30-year terms, and the interest you pay is tax-deductible and fairly low compared to other loans.
Home-equity loans and lines of credit – Homeowners can borrow against equity they have in their house with these types of loans. The equity or loan amount would be the difference between the appraised value of your home and the amount you still owe on your mortgage. These loans are good for home additions, home improvements or debt consolidation. The interest rate is often tax deductible and also fairly low compared to other loans.
Small business loans – Your local banks usually offer these loans to people looking to start a business. They do require a little more work than normal and often require a business plan to show the validity of what you are doing. These are often secured loans, so you will have to pledge some personal assets as collateral in case the business fails.
Loans can come from individuals, corporations, financial institutions, and governments. They offer a way to grow the overall money supply in an economy as well as open up competition and expand business operations. The interest and fees from loans are a primary source of revenue for many financial institutions such as banks, as well as some retailers through the use of credit facilities.
The Difference Between Secured Loans and Unsecured Loans
Loans can be secured or unsecured. Mortgages and car loans are secured loans, as they are both backed or secured by collateral.
Loans such as credit cards and signature loans are unsecured or not backed by collateral. Unsecured loans typically have higher interest rates than secured loans, as they are riskier for the lender. With a secured loan, the lender can repossess the collateral in the case of default. However, interest rates vary wildly depending on multiple factors.
Revolving vs. Term Loans
Loans can also be described as revolving or term. Revolving refers to a loan that can be spent, repaid and spent again, while term refers to a loan paid off in equal monthly installments over a set period called a term. A credit card is an unsecured, revolving loan, while a home equity line of credit (HELOC) is a secured, revolving loan. In contrast, a car loan is a secured, term loan, and a signature loan is an unsecured, term loan.
SPONSORED BY ALLY INVEST
Special Offer from Ally Invest
Learn more with up to $3,500 cash bonus + commission free trades for new accounts
How Do Interest Rates Affect Loans?
Interest rates have a huge effect on loans. In short, loans with high interest rates have higher monthly payments or take longer to pay off than loans with low interest rates. For example, if a person borrows $5,000 on an installment or term loan with a 4.5% interest rate, he faces a monthly payment of $93.22 for the next five years. In contrast, if the interest rate is 9%, the payments climb to $103.79.
Similarly, if a person owes $10,000 on a credit card with a 6% interest rate and he pays $200 each month, it will take him 58 months or nearly five years to pay off the balance. With a 20% interest rate, the same balance and the same $200 monthly payments, it will take 108 months or nine years to pay off the card.
The interest rate on loans can be set at a simple interest or a compound interest. Simple interest is interest on the principal loan, which banks almost never charge borrowers. For example, if an individual takes out a $300,000 mortgage from the bank and the loan agreement stipulates that the interest rate on the loan is 15%, this means that the borrower will have to pay the bank the original loan amount of $300,000 x 1.15 = $345,000.
Compound interest is interest on interest, and means more money in interest to be paid by the borrower. The interest is not only applied on the principal, but also on accumulated interest of previous periods. The bank assumes that at the end of the first year, the borrower owes it the principal plus interest for that year. At the end of second year, the borrower owes it the principal and the interest for the first year plus the interest on interest for the first year. The interest owed when compounding is taken into consideration is higher than that of the simple interest method because interest has been charged monthly on the principal loan amount including accrued interest from the previous months. For shorter time frames, the calculation of interest will be similar for both methods. As the lending time increases, though, the disparity between the two types of interest calculations grows.
Why does non-financial capital matter?
How well a company manages its non-financial capital is an important factor to consider when making investment decisions. Watch this short video to find out more.
A signature loan is a personal loan offered by banks and other finance companies that uses only the borrower’s signature and promise to pay as collateral.
A loan commitment is a loan from a commercial bank or other lending institution that may be drawn down and contractually funded in the future.
A home-equity loan is a consumer loan secured by a second mortgage, allowing home owners to borrow against their equity in the home.
Closed-end credit is a loan or extension of credit in which the proceeds are dispersed in full when the loan closes and must be repaid by a specified date.
A take-out loan is a type of long-term financing (usually) on a piece of real property.
A bullet loan is any loan that requires a balloon payment at the end of the term.
Terms and Conditions of a Loan
Loan terms can also be the characteristics of your loan, which are described in your loan agreement. When you borrow money, you and your lender agree to certain things which are the “terms” of your loan. They’ll provide a sum of money, you’ll repay according to an agreed upon schedule, and if something goes wrong each of you has rights and responsibilities that are listed in the loan agreement.
Some common terms that are worth paying attention to are listed below.
Interest Rate: How much interest is charged on your loan balance every period. The higher the rate, the more expensive your loan. It’s also important to find out if your loan has a fixed interest rate or a variable rate that can change at some point in the future. Rates are often quoted in terms of an annual percentage rate (APR), which might account for additional costs besides interest costs.
Monthly Payment: Your monthly payment is often calculated with the length of your loan and the interest rate. However, there are a variety of ways to calculate your required payment (for example, credit cards often calculated based on a small percentage of your balance). Make sure you know how much you’ll pay each month and if that amount will ever change. You need to be sure that the payment fits within your budget.
Prepayment Penalties: Cutting your interest costs is often a good idea. If you can pay off your debt faster than is required, you’ll avoid wasting money. Find out if there’s any penalty for paying off loans early or making extra payments. Especially when it comes to high-cost loans like credit cards, paying more than the minimum is wise.
Balloon Payments: Some loans don’t get paid down over time; you only pay interest costs or a small portion of your loan balance. Unfortunately, that means you’ll need to come up with a large balloon payment (or refinance the loan with another large loan) at some point in the future. Make sure you know about this long before that payment is due.
What Is Loan Consolidation?
Federal student loan borrowers have the option of consolidating their loans via the Direct Consolidation Loan program offered by the U.S. Department of Education.
Consolidating allows you to merge multiple eligible loans into a single loan. That loan is then serviced by the servicer of your choosing – of which Nelnet is one!