Loan FAQs:


Q: Is a loan the lending of money from one individual?

A: Yes, and organization or entity to another individual, organization or entity.

Q: Is a loan a debt provided by an entity to another entity at an interest rate?

A: Yes, and evidenced by a promissory note which specifies, among other things, the principal amount of money borrowed, the interest rate the lender is charging, and date of repayment.

Q: Is a loan not gross income to the lender?

A: Yes.

Q: Is a loan a loan on which the interest is reduced by an explicit or hidden subsidy?

A: Yes.

Q: Is a loan where a car dealership acts as an intermediary between the bank or financial institution and the consumer?

A: Yes.

Q: Are loans one of the principal tasks for financial institutions such as banks and credit card companies?

A: Yes.

Q: Is a loan a loan in which the borrower pledges some asset as collateral?

A: Yes.

Q: Is a loan where a bank gives the loan directly to a consumer?

A: Yes.

Q: Is a loan not gross income to the borrower?

A: Yes.

Q: Are loans short term loans that are typically in that they do not have fixed dates for repayment and carry a floating interest rate which varies according to the prime lending rate?

A: Yes.

Q: Is a loan generally provided at a cost?

A: Yes, and referred to as interest on the debt, which provides an incentive for the lender to engage in the loan.

Q: Is a loan a very common type of loan?

A: Yes, and used by many individuals to purchase things.

Q: Are loans monetary loans that are not secured against the borrower's assets?

A: Yes.

Q: Are loans nearly always higher than for secured loans?

A: Yes, because an unsecured lender's options for recourse against the borrower in the event of default are severely limited.

Q: Are loans not deductible?

A: Yes.