The Loan: What is a loan?

A loan is an operation for which a financial institution puts at our disposal a certain money quantity by means of a contract. In a loan we acquire the obligation to return this money within a period of established time and to pay a few commissions and agreed interests. We can return the money in one or several payments, although, usually, the quantity returns in monthly quotas that the commissions and the interests include.

On having spoken about loan, the quantity of money that we borrow is called the 'principal one', while the 'interest' is the price that we pay for being able to have this money. The period of time to pay the loan is known like the 'term'.

The 'lender' is the person or financial institution that gives the money or the good by way of loan. The 'borrower' is the person who receives the money or the good by way of loan.

According to the article 1.740 of the Civil Code, “For the loan contract, it delivers one of the parts to other one, or some thing not fungible so that it uses of her certainly time and returns it to him, in whose case calls itself money or another thing a commodate, or fungible, with condition to return other of the same species and quality, in whose case the name of loan preserves simply. The commodate is essentially free. The simple loan can be free or with agreement of paying interest”.