In a loan in the first place, the borrower receives or borrows an amount of money, called principal from the lender and is obligated to pay back or reimburse a corresponding amount to the lender at a later date. Typically, the money paid back in regular installments, or partial payment of an annuity, each rate the same amount.
The loan is generally provided at a cost, referred to as interest on the debt, thus providing an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions enforced by the contract, which may also place the borrower under additional restrictions known as loan agreements. Although this article focuses on monetary loans, in practice, any material object might be lent.
