BANK LOAN Meaning and
Definition
-
A bank loan refers to a financial arrangement in which a bank or financial institution lends money to an individual, business, or organization with the expectation of repayment over a predetermined period. It is a type of debt financing availed when an individual or entity requires funding for various purposes such as personal expenses, business expansion, consolidation of debts, investment opportunities, or purchasing assets.
The terms and conditions of a bank loan typically involve several important factors. This includes the loan principal or the amount borrowed, the interest rate charged by the bank, the repayment period, and any additional fees or charges associated with the loan. The interest rate can be either fixed or variable, depending on the specific loan agreement. Fixed rates remain constant throughout the loan term, while variable interest rates fluctuate based on prevailing market conditions.
The borrower is usually required to provide collateral, such as property or assets, to secure the loan and reduce the lender's risk. This allows the bank to claim ownership of the collateral if the borrower fails to make regular repayments or defaults on the loan. Repayment of bank loans generally occurs in regular installments, which include both principal and interest amounts over the loan term. The borrower can choose a repayment schedule that suits their financial situation, such as monthly, quarterly, or annually.
Bank loans are commonly regarded as a reliable and convenient source of funds, providing borrowers the opportunity to access a substantial amount of money for various purposes, while the bank earns interest as a form of profit.
Common Misspellings for BANK LOAN
- vank loan
- nank loan
- hank loan
- gank loan
- bznk loan
- bsnk loan
- bwnk loan
- bqnk loan
- babk loan
- bamk loan
- bajk loan
- bahk loan
- banj loan
- banm loan
- banl loan
- bano loan
- bani loan
- bank koan
- bank poan
Etymology of BANK LOAN
The word "bank" originates from the Italian word "banca", which evolved from the Germanic word "bank" meaning "bench" or "counter". In medieval Italy, moneylenders used benches or tables in the marketplace to conduct their business. Over time, "banca" came to represent the business itself and later referred to institutions that provided financial services.
The word "loan" can be traced back to the Old Norse word "lán", which means "a grant, a loan, or something lent". It entered the English language during the Middle English period.
Therefore, the etymology of "bank loan" combines the Italian word "banca" with the Old Norse word "loan" to describe a loan provided by a financial institution such as a bank.
Similar spelling words for BANK LOAN
Infographic
Add the infographic to your website:
