Related Terms
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.
A written promise to repay the loan is called a promissory note.

Use loan in a sentence

I really wanted a home because I saw other people living in nice homes but I am poor so I decided to apply for a loan.
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A loan may be able to provide you with the cash you need to buy your first, or even, second home.
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Leland was nervous about his upcoming meeting at the bank because if they didn't give him the loan he needed, he wouldn't be able to hang onto his small business.
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Notable Quotable

Obtaining Loans for Small or New Businesses
"When starting a company, consider an SBA-guaranteed loan. Under this program, the U.S. Small Business Administration (SBA) guarantees a portion of a loan, often up to 85 percent, and enables a small business owner to qualify for attractive interest rates and financing options. For more information, go to www.sba.gov. Also research local small business loan programs. These programs may include loans with below-market interest rates or no origination fees. Start by contacting your state or local department of economic development."
- FDIC
Obtaining a Business Loan versus Using Your Credit Card
"Plan to borrow money with a business loan instead of using your personal credit card. "For some small business owners, particularly those at startup companies, a personal credit card may be their only or best option for financing expenses," said Luke Reynolds, an FDIC Community Affairs Specialist. "But for many owners, a business loan will be a much less expensive option," he said, because the bank loan will be secured by the business' property or equipment."
- FDIC


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