Bank loan

A bank loan is credit provided by a bank to a borrower under agreed repayment terms, usually including interest, a schedule, and conditions.

Principal (finance): The original amount of money borrowed or invested, excluding interest and other charges. Loan interest and repayments are calculated in relation to the principal.
Mortgage loan: A loan used to finance real estate, secured by a mortgage or similar claim on the property. It is a common long-term bank loan for purchasing a home or other property.
Commercial bank: A financial institution that accepts deposits and provides services such as payments and lending. Commercial banks are the institutions that commonly originate bank loans.
Bond (finance): A debt security in which an issuer borrows from investors and promises specified payments. A bond raises debt funding from investors rather than through a loan from one bank.
Debt-to-income ratio: A measure comparing a borrower’s debt payments with income over a specified period. Lenders use it to judge whether proposed repayments fit a borrower’s income.
Interest rate: The price of borrowing money, expressed as a proportion of the amount borrowed over time. It determines how much the borrower pays beyond repaying principal.
Personal loan: A loan made to an individual for personal expenses, often with fixed payments and no collateral. It shows how banks lend to households without tying credit to a specific asset.
Loan agreement: A contract setting out a loan’s amount, repayment obligations, interest, and other conditions. It records the negotiated terms that define the borrower’s obligations.
Peer-to-peer lending: A form of lending that connects borrowers with individual or institutional lenders through a platform. It offers credit without a bank acting as the direct lender.
Loan default: A failure to meet the repayment or other obligations specified in a loan agreement. Default can lead to penalties, collection actions, or enforcement against collateral.

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