LOAN REPAYMENT Meaning and
Definition
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Loan repayment is the act of returning borrowed funds to a lender according to the agreed-upon terms and conditions of a loan agreement. It refers to the process where a borrower makes regular payments to the lender, including both principal and interest, to gradually repay the entire amount borrowed.
The repayment of a loan typically involves the borrower making periodic payments, such as monthly, quarterly, or annually, over a specified period of time, commonly known as the loan term. The repayment schedule outlines the amount of each payment, the due dates, and the duration of the repayment period.
When making loan repayments, a certain proportion of the payment is allocated towards the principal amount borrowed, reducing the outstanding balance, while another portion covers the interest charged by the lender for borrowing the money. The interest amount gradually decreases as the principal is paid off, meaning the interest component of the repayment decreases over time.
Loan repayments are crucial in fulfilling the borrower's obligation to the lender and reflect their commitment to honor the terms of the loan agreement. By making regular repayments, borrowers demonstrate their ability to manage their financial obligations responsibly and maintain a good credit history. Failure to make loan repayments as agreed may result in penalties, fees, or even legal action by the lender in order to recover the outstanding amount.
Common Misspellings for LOAN REPAYMENT
- koan repayment
- poan repayment
- ooan repayment
- lian repayment
- lkan repayment
- llan repayment
- lpan repayment
- l0an repayment
- l9an repayment
- lozn repayment
- losn repayment
- lown repayment
- loqn repayment
- loab repayment
- loam repayment
- loaj repayment
- loah repayment
- loan eepayment
- loan depayment
- loan fepayment
Etymology of LOAN REPAYMENT
The word "loan repayment" has a straightforward etymology:
1. "Loan" originated from the Middle English word "lone" and the Old Norse word "lán", which both meant a thing lent or borrowed. The term later evolved to refer specifically to the act of lending money or goods.
2. "Repayment" comes from the combination of the prefix "re-" (meaning "again" or "back") and the word "payment", derived from the Middle English word "paiement" and the Old French word "paiement", which denoted the act of paying or giving back something in return.
Thus, the etymology of "loan repayment" suggests the process of repaying or giving back money or goods borrowed through a loan.
