FRIENDLY LOAN Meaning and
Definition
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A friendly loan is a term commonly used to describe a loan provided by a family member, friend, or acquaintance with mutually agreed-upon terms and conditions. Also known as a personal loan or an informal loan, a friendly loan is typically granted without the involvement of a traditional financial institution. It can be characterized as a loan arrangement between individuals who share a personal relationship or have a close bond.
Unlike loans obtained through banks or other lending institutions, friendly loans often have more relaxed requirements and flexible repayment options. These loans are commonly sought when the borrower faces difficulty in obtaining funding from conventional sources due to reasons such as a poor credit history, lack of collateral, or even a desire to avoid complicated paperwork.
The terms of a friendly loan can vary and are usually agreed upon through an informal agreement between the lender and the borrower. While interest may be charged on the loan, it is typically lower compared to rates offered by commercial lenders. The repayment terms are also often more flexible, allowing the borrower to make smaller payments or adjust the schedule based on their financial situation.
Despite being informal in nature, it is recommended that both parties involved in a friendly loan put the agreed-upon terms in writing to establish clarity and prevent any misunderstandings or disputes in the future.
Common Misspellings for FRIENDLY LOAN
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Etymology of FRIENDLY LOAN
The term "friendly loan" is primarily composed of two words: "friendly" and "loan".
The word "friendly" originated from the Old English word "freondlice", meaning "characteristic of a friend". This word, in turn, comes from the Old English noun "freond", which means "friend". The word "freond" is derived from the Old English verb "freon", which translates to "to love, to favor".
The word "loan" originates from the Middle English word "lone", which means "to lend". This word is derived from the Old Norse word "lána", meaning "to lend".
Therefore, the phrase "friendly loan" combines the concept of lending money ("loan") with the idea that it is done in a friendly, amicable, or favorable manner ("friendly").
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