What is a loan
In finance, a loan is the lending of money by one or more persons, entities, or other entities to another person, entity, etc. The beneficiary (ie the borrower) incurs a debt and is generally required to pay interest on this debt until it is repaid and the principal amount borrowed is repaid. The document evidencing the debt (such as a promissory note) generally indicates, among other things, the principal amount borrowed, the interest rate applied by the lender and the date of repayment. A loan involves the redistribution of the assets in question between the lender and the borrower over a period of time. The interest is an incentive for the lender to participate in the loan. With a legal loan, each of these obligations and restrictions are contractually enforced, which may also subject the borrower to additional restrictions called loan covenants. Although this article focuses on monetary loans, in practice any tangible object can be loaned. Acting as a lender is one of the main acti