Loan: meaning, definitions and examples
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loan
[ləʊn ]
Definitions
financial
A loan is a sum of money that is borrowed from a bank or financial institution with the agreement that it will be paid back, usually with interest, within a specified period of time.
Synonyms
advance, credit, debt, mortgage.
Which Synonym Should You Choose?
| Word | Description / Examples |
|---|---|
| loan |
A loan refers to money borrowed that is expected to be paid back with interest. It's a broad term used for both personal and business contexts.
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| credit |
Credit generally refers to the ability to borrow money or access goods or services with the understanding that you'll pay later. Common in banking and retail settings.
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| advance |
An advance is a payment made ahead of scheduled time, often used in work or literary contexts when payment is given before services are completed.
|
| mortgage |
A mortgage is a specific type of loan used for purchasing property, typically repaid over several years with the property serving as collateral.
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| debt |
Debt is an amount of money borrowed by one party from another. It often has a negative connotation as it implies an obligation to repay and might indicate financial difficulty.
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Examples of usage
- She took out a loan to buy a new car.
- The bank approved his loan application.
financial
To loan means to lend money to someone under the condition that it will be returned, typically with interest.
Synonyms
Which Synonym Should You Choose?
| Word | Description / Examples |
|---|---|
| loan |
Used to describe a sum of money that is borrowed and expected to be paid back with interest. Usually formal, and often used in banking and financial contexts.
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| lend |
Used to describe the act of temporarily giving something, often money, with the expectation that it will be returned. More commonly used in everyday situations.
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| advance |
Refers to a sum of money given before it is earned, often in the context of salary or royalties. It can also be used in more general terms to mean giving something ahead of time.
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| give a loan |
A phrase used to indicate the act of providing a loan. It is more conversational and often used between individuals or in informal situations.
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Examples of usage
- He agreed to loan me some money until payday.
- The bank is willing to loan you the amount you need.
Interesting Facts
Etymology
- The word originates from the Old English 'lán', which means to lend or grant.
- In Middle English, 'loan' referred to the act of lending or borrowing.
- The concept of lending has been around since ancient civilizations, highlighting how crucial borrowing money is in economies.
Finance
- Loans can be secured, like a mortgage, where the house guarantees the loan, or unsecured, like some personal loans.
- Interest rates determine how much extra money is paid back on the loan. Lower rates mean less money lost in the long run.
- Student loans have made higher education accessible to many, but they can also lead to significant debt if not managed well.
Cultural Perspectives
- In some cultures, borrowing money is viewed as a responsibility and a way to help family members succeed.
- Peer-to-peer lending has emerged in cultures where banks traditionally do not provide loans, showcasing different economic practices.
- Microloans have gained popularity in developing countries, empowering individuals to start businesses and lift themselves out of poverty.
Psychology
- Research shows that taking on debt can affect emotional well-being, influencing stress and anxiety levels.
- Borrowing can create a sense of obligation, impacting relationships if repayment terms aren't clear.
- People often feel a significant psychological weight when managing loans, especially if they encounter financial difficulties.
History
- Ancient Mesopotamians are known to have had debt systems in place, issuing loans as early as 3000 BCE.
- The development of banking systems in medieval Europe allowed for more structured lending practices and created the basis for modern finance.
- During the Great Depression, loans played a crucial role in government recovery efforts but also led to high default rates.
Translations
Translations of the word "loan" in other languages:
🇵🇹 empréstimo
🇮🇳 ऋण
🇩🇪 Darlehen
🇮🇩 pinjaman
🇺🇦 позика
🇵🇱 pożyczka
🇯🇵 ローン
🇫🇷 prêt
🇪🇸 préstamo
🇹🇷 kredi
🇰🇷 대출
🇸🇦 قرض
🇨🇿 půjčka
🇸🇰 pôžička
🇨🇳 贷款
🇸🇮 posojilo
🇮🇸 lán
🇰🇿 несие
🇬🇪 სესხი
🇦🇿 kredit
🇲🇽 préstamo