Loan
Updated: 15 November 2024
What Does Loan Mean?
A loan is a sum of money lent from one party to another, with the agreement that the borrowing party will repay the amount borrowed, plus interest, by a specified date.
Insurance policies are often purchased to protect against the risk of default when a borrower takes out a loan.
Insuranceopedia Explains Loan
Mortgage insurance is a key example of insurance that protects against losses caused by a borrower defaulting on a loan. It is often required by mortgage lenders before approving the loan.
If a borrower has mortgage insurance, it provides coverage in the event of default on loan repayment, reducing the risk for the lender.
