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Simple English definitions for legal terms
interest-free loan
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A quick definition of interest-free loan:
An interest-free loan is when someone lends you money and doesn't charge you any extra money for borrowing it. It's like borrowing a toy from a friend and not having to give them anything in return. Loans are when someone gives you money that you have to pay back later, usually with extra money called interest. But with an interest-free loan, you don't have to pay any extra money back.A more thorough explanation:
An interest-free loan is a type of loan where the borrower is not charged any interest on the amount borrowed. This means that the borrower only has to pay back the amount they borrowed, without any additional charges.
For example, if John borrows $1000 from his friend Jane as an interest-free loan, he only has to pay back the $1000 and not any additional interest charges.
Interest-free loans are often given by family or friends, or by organizations for specific purposes such as education or entrepreneurship.
Overall, interest-free loans can be a great option for borrowers who want to avoid paying high interest rates on their loans.