A loan is an act of granting money, goods or other tangible assets to another party in exchange for a future repayment of the original amount plus interest or other financial charges.
The terms of the loan are agreed upon by each of the parties participating in the transaction prior to its disbursement. Most of the loans also have provisions regarding the maximum amount of interest and any early repayment. The most widespread loan among Italian citizens is the mortgage.
Loans can be made by individuals, corporations, financial institutions and governments. They are a way to increase the money supply in an economy, increase competition and expand business activities. Interest and loan fees are a primary source of revenue for many banks.
