American General Finance

A loan is a type of debt. A loan predetermines the redistribution of financial funds over a certain period of time, between the borrower and the lender. At first the borrower receives a certain amount of money from the lender. The borrowed sum is usually but not always paid back in regular installments, to the lender. As a rule, the service is offered at a cost, which is called an interest on the debt. Under the terms of the loan, a borrower may be subject to certain restrictions - loan covenants.

Loans are offered by all the financial institutions, like banks and financial services companies. They distinguish between secured and unsecured loans. A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan.

Unsecured loans are monetary loans which are not secured against the assets of the borrower. These may be available from financial institutions under many different pretences and marketing packages: credit card debts; personal loans; bank overdrafts; credit facilities or lines of credit; and corporate bonds. The interest rates offered for these different forms of loan may vary. These may or may not be regulated by law.

---