Loans are financial agreements in which one party, typically a lender, provides money or property to another party, known as the borrower, with the expectation that it will be paid back in the future, usually with interest. The terms of a loan, including the repayment schedule, interest rate, and collateral requirements, are outlined in a contract. Loans can be used for various purposes, such as purchasing a home, financing education, or funding business operations. They are categorized into several types, including unsecured loans (not backed by collateral), secured loans (backed by assets), short-term loans (to be repaid within a year), and long-term loans (with repayment periods extending beyond a year). The borrower typically receives a lump sum of money upfront and agrees to pay back the principal amount, plus interest, according to the agreed-upon terms. Failure to repay a loan can result in penalties, increased interest rates, or legal action.
According to recent data from the Mortgage Bankers Association, the value of commercial real estate loans set to mature this year is estimated to be around $929 billion. This figure…