Two of the commonest words linked to loans and advances are lending and borrowing. Although many people who are unaware of what the two means may confuse them, there is a distinction between borrowing and lending. In fact, lending and borrowing are two acts differing in meaning and intent. In grammar, the term borrowing is a noun, while “to lend” is simply a verb. But beyond semantics, continue reading to discover which one you would rather prefer to be – a borrower or lender – using their individual features as your yardstick.
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What is Lending?
Lending is the word used to lend money to anyone to get it back, i.e. the original principal sum given and the interest for some time. When a bank then loans you money in the form of a business loan, the bank is entitled to charge you a certain amount of interest on the initial cash. Loans are not just about money, but they may also be about things. You may also lend items to anyone after a specific time to receive the artefacts back.
What is Borrowing?
On the other hand, borrowing means taking money from another person or a financial institution to repay the sum of money lent within a specific time. The objective of lending is to gain interest on the amount of money. Then, the object of borrowing is to use the funds for particular purposes such as home building, medical expenses, hospital expenses, school education, higher education, private functions and the like. Just as with lending, borrowing, in terms of objects may also be achieved.
Main Distinctions Between Lending and Borrowing
The critical distinction between lending and borrowing terms is that using the term lending would mean to give up something. In contrast, the term borrowing would mean taking up something, even though both represent a temporary arrangement.
Lending intends to gain some interest while the borrowing aims to acquire the item in which the borrower is interested and cannot afford the same.
The borrower aims to get the object or money for its reason and duty to repay the same without defaulting. While the lender ‘s goal is to gain interest over the money, it has in access, and it is his responsibility to be reasonable with the borrower and not to take any unfair advantage.
So, Will You Rather Be A Borrower or A Lender?
To become a borrower has its advantages, just in the same way, being a lender has its various benefits as well. Feedback on finance companies goes a long in way in influencing your decision. Also,LendingTree Reviews from individuals and other companies is a plus likewise. However, it is generally concluded that a lender is benefiting more than a borrower. A lender gains interest in the amount of money lent to someone within a given time. A borrower, on the other hand, simply borrow individual money for specific purposes, such as home building, medical expenses, hospital expenses, schooling, higher education, private functions and the like.