With finance, a loan is really a debt provided through one entity to another entity at the consequences, and evidenced with a note which specifies, among other items, the principal sum, interest rate, and date of pay back. A loan involves the reallocation on the subject asset for a short time, between the lender and the borrower. All loans and advances will be grouped into four categories with regards to classification, namely Continual loan, Demand mortgage, Fixed Term mortgage, Short Term Farming and Micro Credit rating.
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