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.

Noun

vehicle (plural vehicles)

1. A conveyance; a device for carrying or transporting substances, objects or individuals.
2. A medium for expression of talent or views.
3. A liquid content (e.g. oil) which acts as a binding and drying agent in paint. (FM 55-501).
4. (Hinduism) An animal or (rarely) a plant on which a Hindu deity rides or sits
5. An entity to achieve an end.
6. (Buddhism) A yana.

Synonyms

• (Hinduism): vahan

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