A Loan is a financial transaction whereby one party (the lender) gives an amount of money to another party (the borrower), who receives it and agrees to:
- Use if for a pre-determined purpose
- Pay interest and other pre-determined charges on the dates indicated
- Repay this amount by the agreed maturity date
Repayment is usually in the form of periodic instalments, consisting of principal and interest.
A credit facility is a contract whereby a financial institution makes a certain amount of money, called a limit, available to the customer until a certain date (maturity). The holder undertakes to repay the available limit at maturity.
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