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difference: loan, mortgage

Discussion in 'English Only' started by claude23, Mar 11, 2006.

  1. claude23 Senior Member

    normandy
    FRANCE
    Hi,


    Could you tell me difference between loan and mortgage ?

    My friend wants to borrow some money from the bank . He wants to buy a house. What should I say ?


    Thank you,

    Claude.
     
  2. lablady

    lablady Senior Member

    Central California
    English - USA
    A loan is when someone gives you something for your temporary use, and you return it when you are finished using it. It could be money or an object (such as the neighbor's garden hose). In the case of money, the loan is usually repaid in payments with interest (unless you are borrowing from a very good and trusting friend).

    A mortgage is a loan that has some kind of property associated with it as a guarantee that the loan will be repaid. For example, if you purchase a house with a loan from a bank, the house is tied to the loan as collateral and the bank can take it from you if you do not repay. Your friend will buy his house with a mortgage from the bank.

    I rarely hear the word mortgage used for any kind of loan other than for houses or land. A loan for an automobile has property associated with it also (the bank can take the car if you don't pay), but we still call them "auto loans" and not "auto mortgages".
     
  3. maxiogee Senior Member

    imithe
    A mortgage is almost exclusively taken out using the house as security. it is usually at a different rate than you would pay on a loan. A loan (for most people) is usually for a much lesser amount of money and would be repaid over a shorter period of time.
    If your friend is buying a house the chances are that it's a mortgage they'll be looking for.

    --edit--
    lablady is right that a home is used as security for a mortgage, but she neglects to mention that a home is often used as security for a loan also.
     
  4. hardik soni

    hardik soni Banned

    India- Hindi & English
    As Per My Knowledge;


    Mortgage :- “ A mortgage is a method of using properties as security for the performance of an Obligation, usually the payment of a debt.”




    Loan :- “A LOAN is one kind of Debt. This debt has to be payed before particular Time duration and with additional interest rates is also to be paid by Borrower in LOAN.”
     
  5. Willard01 New Member

    ENGLISH-BRITISH
    Mortgage, is nothing but a security interest on real property granted to a lender, as in mortgage law. A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time.
     
  6. oliveirar New Member

    English
    loan is general for each and every field but the mortgage is used just for the property issues and purposes.
     

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