LOAN FACILITY Meaning and
Definition
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A loan facility refers to a financial arrangement provided by a financial institution or lender to an individual, business, or government entity, allowing them to borrow a certain amount of money for a specified period. It serves as a source of credit for borrowers who may need to finance various purposes such as business expansion, purchase of assets, paying off debts, or meeting personal financial requirements.
The loan facility sets out the terms and conditions, including the amount of the loan, interest rate, repayment schedule, and any other applicable fees or charges. It provides borrowers with the flexibility to access the funds as per their needs, either as a lump sum or in instalments, depending on the agreement.
This facility offers borrowers the advantage of obtaining funds quickly and easily compared to other sources of financing. Depending on the type of loan facility, collateral or security may be required, such as property or assets, to minimize the lender's risk of non-repayment. The borrower is obligated to repay the loan amount along with any accrued interest and adhere to the agreed-upon repayment terms.
Loan facilities can vary in nature, including term loans, revolving credit facilities, working capital lines of credit, or overdraft facilities. They can be obtained from commercial banks, credit unions, online lenders, or specialized lending institutions. The availability and terms of a loan facility depend on various factors, including the borrower's creditworthiness, purpose of the loan, and prevailing market conditions.
Common Misspellings for LOAN FACILITY
- koan facility
- poan facility
- ooan facility
- lian facility
- lkan facility
- llan facility
- lpan facility
- l0an facility
- l9an facility
- lozn facility
- losn facility
- lown facility
- loqn facility
- loab facility
- loam facility
- loaj facility
- loah facility
- loan dacility
- loan cacility
- loan vacility
Etymology of LOAN FACILITY
The word "loan" originates from the Middle English word "lone", which means "to lend". It can be traced back to the Old Norse word "lána" and the Old English word "lǣn" or "lǣnan", both meaning "to lend".
The word "facility" comes from the Latin word "facilitas", which means "ease" or "ability". It is derived from the Latin word "facilis", meaning "easy" or "simple".
When these two words are combined, "loan facility" refers to a financial arrangement or agreement that enables individuals, businesses, or organizations to borrow a certain amount of money from a financial institution or lender for a specific purpose.
