Loan


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loan,

in business, sum of money borrowed at a particular interest rate. More generally, it refers to anything given on condition of its return or repayment of its equivalent. A loan may be acknowledged by a bond, a promissory note, or a mere oral promise to repay. Because of biblical injunctions against usury, the early Christian church forbade the taking of interest. In feudal European society, loans were little needed by the great mass of relatively self-sufficient and noncommercial peasants and serfs, but kings, nobles, and ecclesiastics were heavy borrowers for personal expenditures. Merchants and other townsmen, especially the Jews, were the moneylenders, and various devices were found for circumventing the prohibition of usury. With the rise of a commercial society, restrictions on the taking of interest were gradually relaxed. Today, banks and finance companies make most loans, usually on collateralcollateral
, something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although the latter may also be accepted as such.
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, such as stocks, personal effects, and mortgages on land and other property, or on assignments of wages. Credit unionscredit union,
cooperative, not-for-profit financial institution that makes low-interest personal loans to its members. It is usually composed of persons from the same occupational group or the same local community or institution.
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 have attained some importance in making personal loans at relatively low interest rates, and microcredit programs and organizations, which offer small-scale loans, have proved useful, particularly in developing countries, in helping individuals to establish small businesses. The 21st cent. has seen the rise of so-called peer-to-peer lending, in which companies use the Internet to match lenders with borrowers. Focusing on smaller personal and business loans, peer-to-peer lending has developed in part because investors faced lower interest rates on bonds and money-market funds in the aftermath of the recession of 2007–9. A pawnbrokerpawnbroker,
one who makes loans on personal effects that are left as security. The practice of pawnbroking is ancient, as is recognition of the danger it involves of oppressing the poor.
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 lends money on the security of articles left in his shop.
The Columbia Electronic Encyclopedia™ Copyright © 2013, Columbia University Press. Licensed from Columbia University Press. All rights reserved. www.cc.columbia.edu/cu/cup/
The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Loan

 

in civil law, a contract by which one party (the lender) transfers to the ownership of another party (the borrower) or to his management money or articles defined by generic characteristics, such as number, weight, measure (for example, grain), and the borrower undertakes to return the same amount of money or an equal quantity of articles of the same kind and quality. Loan contracts belong to the category of so-called real (the rights and obligations of the parties under such contract arise only from Jhe moment of the transfer of the loan) and unilateral contracts (the lender has the right to demand the return of the loaned property and does not carry any obligations, whereas the borrower is obliged to return the property and has no rights whatsoever). Under Soviet legislation, loan contracts are to be gratuitous, and the collection of interest is allowed only in cases prescribed by the legislation of the USSR and in the loan operations of public mutual aid funds and municipal pawnshops. A contract for an amount greater than 50 rubles must be concluded in writing.


Loan

 

(Russian, ssuda), a type of loan (zaem) in specie or in kind. The State Bank of the USSR (Gosbank) and other banks of the USSR, by paying out specific, fixed-term sums of money, extend credit to state organizations, collective farms and other cooperatives, and public organizations (see and CREDIT). Banks, public mutual-help offices, pawnbrokers, and the funds of associations of creative workers make loans in money to individual citizens, according to set regulations.

The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.
References in periodicals archive ?
Out: Michel (to AEK Athens, loan), Marcus Bent (to Sheffield United, loan), Jay O'Shea (to Port Vale, loan), Jake Jervis (to Hereford, loan), Nathan Redman (to Burton, loan), Daniel Preston (to Hereford, loan).
Incorporated in 1956, ASA was the nation's first student loan guarantee agency and a model for the federal student loan guarantee program.
Once a minor product targeted for truly hard-up borrowers, second-lien loans have literally exploded in popularity in the past few years, especially as investment vehicles like hedge funds troll for higher yields and lenders direct assets into collateralized loan obligation (CLO) vehicles to offload balance sheet risk.
In December of 2002, Ragland took out a $300,000 adjustable-rate loan on his home, refinancing the $190,000 he owed from his initial interest-only loan.
* A $30.4 million loan for AMLI at Regents Crest, an existing 476-unit apartment complex, at 12402 W.
Demand loan. This kind of loan is payable in full, at any time, on the lender's demand.
In aggregate, the 2004 SNC Program covered 7,490 credits totaling $1.5 trillion in loan commitments to 4,746 borrowers.
And Jackson Hewitt Tax Service signed an agreement late last year with Rent-A-Center, so that people can buy used furniture with a refund anticipation loan, she said.
So, a company's rates are based on the loan-to-value ratio, the borrower's creditworthiness and the covered proportion of the mortgage loan. For instance, premiums for a mortgage loan with a 90% loan-to-value ratio would be less than for a mortgage loan with a 95% ratio.
The loan called for repayment in five years with amortization over 15 years and a balloon payment.
This was true a century ago, when, Calder notes, many people preferred to pay higher rates at pawnshops rather than listen to the personal finance lectures that charities would impose as a condition of a lower-interest loan.
It is not economically feasible for banks to lend money than that fact on a $150,000 loan the bank will just break even.