Borrower

Short Answer
A borrower is an individual or entity that takes out a loan from a lender with the obligation to repay the borrowed amount, usually with interest, over a specified period.

Borrower

Definition

A borrower is anyone who obtains funds from a lender under agreed terms. Borrowers can be individuals, businesses, or governments. The loan agreement outlines the amount borrowed (principal), the interest rate, the repayment schedule, and any other conditions. Borrowing is a common financial activity for various purposes, such as purchasing a home, funding education, or expanding a business.

The borrower is responsible for repaying the loan according to the terms specified in the loan agreement. Failure to do so can result in penalties, higher interest rates, or legal action. Creditworthiness, which is determined by credit history and financial health, plays a significant role in the borrowing process, influencing the terms and availability of loans.

Borrower

Examples

  1. An individual taking out a mortgage to buy a house.
  2. A small business owner obtaining a loan to expand operations.
  3. A government issuing bonds to finance infrastructure projects.

Borrower

Further Reads

Further Reading:

  1. How Borrowing Works - Investopedia
  2. Types of Borrowers and Their Needs - The Balance
  3. Understanding Personal Loans - Bankrate

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