Borrowing

Borrowing is the process of getting the loan of an asset from another entity usually in return for interest.

Expanded Definition

In the case of personal finance, borrowing is most often a personal loan, credit card debt, an auto loan, a home equity loan, or a mortgage. Pawn shop loans, payday loans, and loans from 401(k) plans are also possible.

Businesses usually establish a strong relationship with a local bank, who works with them to arrange whatever financing they need. Business have similar borrowing opportunities as do individuals, but in addition corporations can borrow by issuing bonds.

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Related Terms

• 401(k)
• Asset
• Auto loan
• Bank
• Bond
• Business
• Commercial paper
• Credit card debt
• Finance
• Home equity loan
• Loan
• Mortgage
• Pawn shop loan
• Payday loan
• Personal loan

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