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a loan is a financial arrangement in which one party the lender provides a specific amount of money to another party the borrower with the understanding that the borrower will repay the loan with interest over a set period of time loans can be used for a variety of purposes such as purchasing a home or car funding a business venture or covering unexpected expenses when a borrower applies for a loan they typically need to provide information about their income credit history and other Financial factors this information is used by the lender to assess the borrowers creditworthiness and determine whether to approve the loan as well as the terms of the loan such as the interest rate repayment period and any fees associated with the loan once a loan is approved and the funds are dispersed to the borrower the borrower is responsible for making regular payments on the loan over the specified period of time failure to make payments on time can result in late fees additional interest charges a
