LOAN

10 definitions found across Law Mind sources

LOANAuthored
The Law Mind • 1706 words
Definition
A loan is a transaction in which one party (the lender) delivers property — most commonly money — to another party (the borrower) on the condition that equivalent property be returned at a future time, typically with interest. The term covers both the act of lending and the resulting contractual relationship. Legal usage distinguishes two principal forms: 1. Loan for use (commodatum). A bailment of a specific chattel to be used by the borrower temporarily and returned in the same form. The lender retains ownership; the borrower gets temporary possession and use. No reward is involved; the transaction is gratuitous on the lender's side. Because the identical item must be returned, this form is closely tied to bailment doctrine. 2. Loan for consumption (mutuum). A transfer of fungible goods — most often money — where the borrower is obligated to return not the same items but an equivalent quantity of the same kind. Ownership passes to the borrower upon delivery. This is the operative structure of virtually every modern monetary loan. Interest, if any, is a separate contractual obligation layered onto the basic duty to repay. In modern commercial and statutory contexts, loan most often refers to the mutuum form: a creditor advances a sum of money, the debtor receives ownership of those funds, and repayment of a like sum (plus agreed interest) is owed at a specified time or on demand. The contract and its terms — repayment schedule, interest rate, security, covenants, default triggers — constitute what is commonly called the loan agreement or loan documents. ---
Common Language
Modern common usage (Wiktionary): An act or instance of lending; a sum of money or other property borrowed with the condition it be returned or repaid, sometimes with interest; the contract surrounding such a transaction; permission to borrow any item. Historical common usage (Webster's 1913): Webster's 1913 gives only the Scottish dialectal form "loanin" under this headword — an anomaly that makes the 1913 entry nearly useless for legal research purposes. The common and legal meanings are largely aligned in everyday use, but the alignment is imprecise in ways that matter legally. Ordinary speakers use "loan" interchangeably for both gratuitous bailments of chattels (lending a neighbor a ladder) and interest-bearing monetary advances (taking a bank loan). Law treats these as structurally distinct transactions governed by different doctrines — bailment law in the first case, contract and lending law in the second. Whether ownership of the thing transfers, and whether the identical item or a mere equivalent must be returned, are questions the common definition does not resolve and the legal definition must. ---
Common Confusion
LOAN vs. GIFT: A loan creates a legal obligation to return equivalent value; a gift transfers property permanently without expectation of return. The distinction matters acutely in tax law (gifts are not taxable income; loans are not income to the borrower) and in family or estate contexts, where the characterization of an intra-family transfer as a loan versus a gift can determine tax liability and creditor rights. LOAN vs. BAILMENT: All loans of chattels for use (commodatum) are bailments, but not all bailments are loans. A bailment for reward — such as a storage contract or equipment rental — is not a loan in the strict legal sense. The historical dictionaries consistently define loan as a bailment without reward, a distinction modern commercial usage frequently obscures. LOAN vs. CREDIT: A line of credit is a commitment to lend up to a specified amount on demand; it is not itself a loan until funds are actually advanced. The two terms are often used loosely as synonyms, but they describe different stages of a lending relationship and carry different legal consequences, particularly in bankruptcy and priority analysis. ---
Recognized Forms
/SUBTYPES Commodatum (loan for use): Gratuitous bailment of a specific, non-fungible item to be returned in specie. Lender retains title. Governed by bailment principles. Mutuum (loan for consumption): Transfer of fungible goods (money, grain, fungible commodities) where borrower receives title and must return an equivalent. The foundational structure of all monetary lending. Secured loan: A loan backed by collateral — real property (mortgage), personal property (security interest under Article 9 of the UCC), or other assets. Lender has remedies against the collateral upon default. Unsecured loan: A loan backed only by the borrower's promise to repay. Lender's remedy on default is a general contract action; no collateral interest. Demand loan: Repayable whenever the lender calls for repayment, without a fixed maturity date. Term loan: Repayable at a specified date or on a fixed schedule of installments. Recourse vs. non-recourse loan: In a recourse loan, the lender may pursue the borrower personally for any deficiency after realizing on collateral. In a non-recourse loan, the lender's remedy is limited to the collateral. The distinction is critical in commercial real estate and project finance. ---
Why It Matters in Research
The loan/bailment boundary in historical sources. Pre-twentieth-century dictionaries and treatises consistently define loan as a gratuitous bailment, emphasizing the absence of reward as definitional. Researchers using historical sources must recognize that this framing reflects the civilian influence on Anglo-American contract law and the commodatum/mutuum distinction inherited from Roman law. Modern lending — virtually always for reward — fits the mutuum category, not the classical "loan" as historically defined. Conflating the two when reading nineteenth-century case law or treatise commentary can produce serious misreadings. Interest and the usury connection. Bouvier's notes, with some delicacy, that whether the term "loan" originally applied to interest-bearing money transactions may trace to historical prohibitions on usury. Researchers working in the history of commercial law, banking regulation, or ecclesiastical restrictions on interest should treat "loan" as a term whose scope was contested and evolving. What constituted a lawful "loan" versus a disguised usurious contract was live litigation through the nineteenth century. Tax and characterization issues. Whether a transfer is a loan or a gift, a loan or compensation, or a loan or a distribution from a closely held entity are recurring characterization questions in federal tax research. The legal definition of loan — a transfer with an obligation to repay — is the operative standard; the corpus of tax cases interpreting that standard is extensive and often fact-intensive. Real estate corpus connections. In the Law Mind real estate corpus, "loan" appears primarily in the context of mortgage financing, government-backed programs (FHA, VA, USDA), and commercial lending structures. Researchers should note that commercial real estate loans frequently include covenants, recourse carve-outs, and prepayment restrictions that make the loan documents themselves the primary legal instrument — not just the promissory note. Bankruptcy research. The characterization of an obligation as a loan (debt) versus equity investment determines creditor status in bankruptcy. This distinction is the subject of recharacterization litigation and should be researched with attention to both contract terms and economic substance. ---
Historical Dictionary Support
Black's Law Dictionary (1st Ed.) defines loan as "a bailment without reward" and as "a sum of money confided to another," giving both forms but leading with the gratuitous bailment framing before addressing the monetary loan. The definition of a money loan tracks the civilian mutuum: delivery of a sum with an agreement to return an equivalent at a future time. The reference to the Civil Code signals the Roman law lineage. Anderson's Dictionary of Law offers the most precise treatment among the historical sources, distinguishing loan for consumption (return in kind; akin to barter or mutuum) from loan for use (bailment of goods for temporary use without reward). Anderson cross-references MUTUUM and BAILMENT, which are the essential companion entries for anyone working with the older doctrinal structure. Anderson also notes, without fully resolving, that a loan of money "never implies a return" of the identical bills or coins — only an equivalent sum. Bouvier's Law Dictionary acknowledges the internal tension in the term directly: a loan "in general implies that a thing is lent without reward; but, in some cases, a loan may be for a reward: as, the loan of money." Bouvier then raises, and declines to fully pursue, whether this usage reflects the era of usury prohibition. This is one of the more historically candid admissions in the shelf sources, and it is useful for researchers working on the history of banking law or the usury doctrine. Black's 2nd Ed. and Rapalje & Lawrence do not contain usable entries on loan as such — the retrieved excerpts address unrelated terms (livery of seisin and load-line marking, respectively). This appears to be a corpus extraction artifact. Researchers should rely on Black's 1st Ed., Anderson, and Bouvier for historical treatment of this term. What the historical dictionaries collectively miss: They do not address the modern regulatory apparatus governing consumer loans (truth-in-lending disclosures, ability-to-repay requirements, anti-predatory lending rules), the Article 9 UCC framework for secured lending, or the tax consequences of loan characterization. These are central to any current research involving loans and must be sourced from modern statutory and regulatory materials. ---
Jurisdictional Note
The basic common law and civilian structure of loan doctrine is consistent across U.S. jurisdictions, but significant variation exists in consumer lending regulation (state usury caps, payday lending rules, mortgage protections), deficiency judgment rules after foreclosure, and anti-deficiency statutes that convert certain recourse loans into functional non-recourse obligations. Researchers working on mortgage loans in particular must check state-specific foreclosure and deficiency law, as these vary substantially. ---
Encyclopedia Cross-Reference
Government-Backed Loans — FHA, VA, and USDA Loan Programs (The Law Mind Real Estate Transactions & Construction Encyclopedia) Commercial Real Estate Lending — Loan Structure, Recourse vs. Non-Recourse, and Loan Covenants (The Law Mind Real Estate Transactions & Construction Encyclopedia) Student Loan Interest Deductions (The Law Mind Tax Encyclopedia) ---
Related Terms
Bailment Mutuum Commodatum Debt Credit Mortgage Promissory note Security interest Usury Interest Gift (contrast) Guaranty Recourse / Non-recourse Loan agreement Default
LOANmain
Black's Law Dictionary • 1891
A bailment without reward; consisting of the delivery of an article by the owner to another person, to be used by the latter gratuitously, and returned either in specie or in kind. A sum of money confided to another. A loan of money is a contract by which one delivers a sum of money to another, and the latter agrees to return at a future time a sum equivalent to that which he borrowed. Civil Code Cal. § 1912.
LOANmain
Black's Law Dictionary (2nd Ed.) • 1910
of the guardian’s hands, upon the heir’s attaining the requisite age,—twenty-one for males, sixteen for females. 2 Bl. Comm. 68.—Liveryman. <A member of some company in the city of London; also called a ‘“freeman.”—Livery of seisin. The appropriate ceremony, at common law, for transferring the corporal possession of lands or tenements by a grantor to his grantee. It was livery tn deed where the parties went together upon the land, and there a twig, clod, key, or other symbol was delivered in the name of the whole. Livery in lato was where the same ceremony was performed, not upon the land itself, but in sight of it. 2 BI. Comm. 315, 316; Micheau v. Crawford, 8 N. J. Law, 108; Northern Pac. R. Co. v. Cannou Oe C.) 46 Fed. 232.—Livery-office. An ofce appointed for the delivery of lands.—Livery stable keeper. One whose business it is to keep horses for hire or to let, or to keep, feed, or board horses for others. Kittanning Borough v. Montgomery, 5 Pa. Super. Ct. 193. .A bailment without reward; consisting of the delivery of an article by the owner to another person, to be used by the latter gratuitously, and returned either in spccic or in kind. A sum of money confided ‘to another. Ramsey v. Whitbeck, 81 Ill. App. , 210; Nichols v. Fearson, 7 Pet. 109, 8 L. Ed. 623; Rodman v. Munson, 13 Barb. (N. Y.) 75; Booth v. Terrell, 16 Ga. 25; Payne v. Gardiner, 29 N. Y. 167. ; A loan of money is a contract by which one delivers a sum of money to another, and the latter agrees to return at a future time a sum equivalent to that which he borrowed. Civ. Code Cal. § 1912. —Loan association. LOAN ASSOCIATION.—Loan certificates. See BUILDING AND Cer- -tificates issued by a clearing-house to the associated banks to the amount of seventy-five r cent. of the value of the collaterals deposited by the borrowing banks with the loan comAnderson.—Loan is an agreement by which one person delivers to another a certain quantity of things which are consumed by the use, under the obligation by the borrower, to return to him as much 0 the same kind and quality. Civ. Code La. art, 2910. Loans are of two kinds,—for consumption or for use. A loan for consumption is where the article is not to be returned in sepecte, but in kind. This ig a sale, and not a bailment. Code .Ga. 1882, § 2125.—Loan for exchange. loan for exchauge is a contract by which one delivers personal property to another, and the latter agrees to return to the lender a similar thing at a future time, without reward for its use. Ciy. Code Cal. § 1902.—Loan for use. The loan for use is an agreement by which a person delivers a thing to another, to use it according to its natural destination, or according to the dgectiont, under the obligation on the part of the borrower to return it after he shall have done using it. Civ. Code La. art. 2893. <A loan for use is a contract by which one gives to another the temporary possession and use of personal property. and the latter agrees to return the same thing to him at a future time, without reward for its use. Civ. Code Cal. § 1884. <A loan for use is the gratuitous grant of an article to, another for use, to be returned tn specie, and may be either for a certain time or indefinitely, and at the will of the grantor. Code Ga. 1882, § 2126. Loan for use (called “commodatum” in the civil law differs from a loan for consumption, (call “mutuum” in the civil law,) in this: that the commodatum must be specifically returned; the smutuwm is to be returned in kind. In the case of a commodatum, the property in the thing remains in the lender; in a mutuum, the property passes to the borrower. Bouvier.—Loan, are tuitous, (or commodate.) A class of lment which is called “commodatum” in the Roman law, and is denominated by Sir William Jones a “loan for use,” ét-d-usage,) to distinguish it from “mutuum,” a loan for consum tion. It is the gratuitous lending of an article to the borrower for his own use. Wharton.— Loan societies. In English law. A kind of club formed for the purpose of advancing money on loan to the industrial classes.
LOANmain
Rapalje & Lawrence • 1883
(768) owner of a British ship, before entering his ship outwards from any port in the United Kingdom, shall mark, in white or vellow on a dark ground, a circular disk, twelve inches in diameter, with a horizontal line, eighteen inches in length, drawn through its center, and the center of this disk is to indicate the maximum load-line in salt water to which the owner intends to load the ship for that voyage. Mozely & W. rowed, such as corn, wine, oil, or money, is to be returned in kind. 3. The borrower has the right to use the thing during the time and for the purpose agreed upon by the parties. The loan is to be considered as strictly personal, unless from other circumstances a different intention may fairly be pre-
LOANn.
Websters Unabridged Dictionary (1913) • 1913
A loanin. [Scot.]
LOANn.
Websters Unabridged Dictionary (1913) • 1913
The act of lending; a lending; permission to use; as, the loan of a book, money, services. That which one lends or borrows, esp. a sum of money lent at interest; as, he repaid the loan. Loan office. (a) An office at which loans are negotiated, or at which the accounts of loans are kept, and the interest paid to the lender. (b) A pawnbroker's shop.
LOANn.
Websters Unabridged Dictionary (1913) • 1913
To lend; -- sometimes with out. Kent. By way of location or loaning them out. J. Langley (1644).
loannoun
Wiktionary (English) • 2026
Wiktionary contributorsCC BY-SA 4.0 • via Kaikki
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An act or instance of lending, an act or instance of granting something for temporary use. | A sum of money or other property that a natural or legal person borrows from another with the condition that it be returned or repaid over time or at a later date (sometimes with interest). | The contract and array of legal or ethical obligations surrounding a loan. | The permission to borrow any item.
loanverb
Wiktionary (English) • 2026
Wiktionary contributorsCC BY-SA 4.0 • via Kaikki
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To lend (something) to (someone).
loannoun
Wiktionary (English) • 2026
Wiktionary contributorsCC BY-SA 4.0 • via Kaikki
Extracted and formatted for display by Law Mind. Source link opens the current Wiktionary page and its contributor history; it is not a frozen copy of this extract.
An area of uncultivated ground near a village or farmhouse.

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