loan
LOHN
/loʊn/
A sum of money that is borrowed and is expected to be paid back with interest; to give money to someone for a period of time, expecting them to pay it back.
Can be secured (backed by collateral) or unsecured. Often comes with specific terms and conditions.
The story behind the word. The word 'loan' comes from the Old Norse word 'lán', meaning 'a loan, gift'. It entered English around the 12th century. Interestingly, its original meaning also encompassed a 'gift', highlighting a time when borrowing might have been seen as a more informal arrangement.
Word relationships
- advance: An advance is often a payment made before it is due, or a smaller, short-term loan.
- credit: Credit is the ability to borrow; a loan is a specific instance of borrowing money.
- repayment: Repayment is the act of paying back a loan.
Commonly confused with
- lend: 'Lend' is the verb (to give money temporarily), while 'loan' is typically the noun (the money itself). However, 'loan' is also commonly used as a verb, especially in American English, meaning 'to lend'.
Word family
- loanee (noun): a person who receives a loan.
- lender (noun): a person or institution that lends money.
Collocations
- take out a loan
- apply for a loan
- personal loan
- student loan
- car loan
- repay a loan
Example sentences
- "They took out a small loan to cover unexpected medical expenses." Applying for a personal loan.
- "The bank agreed to loan the company a significant amount for expansion." Lending money.
Memory hook
A LOAN is money you L-OWE to someone. L-OWE
When not to use
Do not use 'loan' when you mean 'lend'. 'Lend' is the verb ('I will lend you money'), 'loan' is the noun ('I need a loan'). However, 'loan' is increasingly used as a verb, especially in American English.
Fun facts
- The verb 'lend' and the noun 'loan' have distinct origins but are now often used interchangeably as verbs, especially in American English.
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