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Friday, January 15, 2016

Loan II part




A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and borrower. 
The loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to return or repay an equal amount of money to the lender later. Typically, the money is paid in regular installments, or partial repayments; in installments, each installment is the same amount. 

The loan is generally provide at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions implemented bycontract, you can also put the borrower under additional restrictions known as contractual obligations. Although this article focuses on monetary loans, in practice any material object might be lent.
Acting as a provider of loans is one of the major tasks for financial institutions. For other institutions, issuing of debt contracts such as bonds is a typical source of funding. 

repayment of loans 


The most typical type of loan repayment is fully amortization payment in which each monthly rate has the same value overtime. 
The fixed monthly payment P for a loan of L for n months and a monthly interest rate c: 
P = L \ times \ frac {c \, (1 + c) ^ n} {- 1 (1 + c) n} 

tags: bank loan, the monthly payment of a fixed,the money,

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