Loans and about borrowing money in general

 

Loan is an agreement between two parties

Loan is an agreement between two parties

A loan is an agreement between two parties where one party, the lender or creditor, gives an object or sum of money, and the other party, the borrower or debtor (also called the debtor or lender only), assumes an obligation to offer or repay the loan as agreed. Money loans provided (except for private loans between friends and family) typically for an additional charge, usually in the form of interest.

The lender is said to have a claim on the borrower.

Categorization of money loans

A money claim, for example, the bond is usually given
his face, which is also called the principal
a rule for repayment of principal, called repayment profile
a rule for interest payment
a rule for interest rates

Loans that the amount exchanged at the loan basis equals face are said to be made at face value. Recipient borrows at a lower formation (alternatively larger) than the nominal amount, said the loan to be formed by a discount (or Premium).

The period between the time of the loan and the formation time of the last payment, the expiry date, called the Loan. The timing of the loan payments is called dates, and usually there are 1, 2, 4 or 12 evenly distributed dates for one year (or alternatively, the term futures for the period between the two termination dates is used).

Payments on a loan

Payments on a loan

Payments on a loan are usually divided into interest and principal, the sum of installments over the life of the loan usually equals the principal. The outstanding debt at any time, the principal minus any previously paid by installments. A loan, which has only one principal, on maturity, is called a permanent loan. A loan that has equal repayment each termination is called a serial loan.

Interest payment on a termination date is usually calculated on the basis of a previous fixed rate of interest on bonds known as the coupon, divided by the number of dates each year and multiplied by the remainder before being written off in the same terminal. If the interest rate remains constant throughout the life of the loan, then said loan should be fixed rate, otherwise known as the variable interest rate.

A fixed rate loan, where the sum of installments and interest payments is the same at each terminal phase, called an annuity.

A loan with no maturity date, and which therefore only pays interest, is called an unamortable loan.

Safety

Safety

It is often a prerequisite for money loans that the borrower provide collateral for loans. How can security be
promises, either in the form of
Hand mortgages where the debtor physically deliver the promised, for example. by giving creditors securities as collateral
To have a mortgage where the creditor receives a registered payment of the debtor’s assets (real estate, furniture, car or similar).
Bail, where one or more guarantors undertake to repay the loan if the debtor is unable to do so.
The bank where a bank (fees) is held for repayment
Insurance, which can be taken out against non-payment in the event of default by a debtor due to death or disability.

The debtor owes

The debtor owes

In Norway, a valid certificate is law, if the provision in Article 3 is often remembered as a common reproduction as money owed debt (with continuation: the second debt, download debt), and expresses that when borrowing money loans have an obligation to pay it agreed services, but more must do this right time and in the right place. Timely payment means that the debtor is responsible for the allocation of the lender received by the deadline, while paying the correct place is the payment of creditors designated place.

It is also the provision that any costs incurred in paying the debtor.

Credit

Credit

A loan where an agreed payment has not been made can be said to be broken and the borrower must be in arrears.

Usually, the lender can terminate a loan for immediate repayment if the residual tax has lasted longer than a certain period and there is collateral for the loan, the creditor will be able to use this reality. At the same time, the borrower usually had to pay a higher interest rate, called fee interest and fees.

The risk of default and loss to the lender as a result is called credit risk.

Borrowers in major loans, including international bond loans, will often be subject to a rating agency (rating agency) to prepare an assessment of credit risk and award a score (rating) that expresses this

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