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Simple English definitions for legal terms
loan association
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A quick definition of loan association:
A loan association, also known as a savings-and-loan association or S&L, is a type of financial institution that primarily provides home-mortgage loans but also offers other banking services such as checking accounts. It was created to help people with modest resources and income to save money and obtain loans at favorable interest rates. Loan associations were developed by social reformers, philanthropic benefactors, religious and fraternal organizations, trade unions, employers, and thrift entrepreneurs over the last two centuries.
A more thorough explanation:
A loan association, also known as a savings-and-loan association or S&L, is a financial institution that primarily provides home-mortgage loans. It is organized and chartered like a bank and also offers other banking services such as checking accounts.
For example, if you want to buy a house but don't have enough money to pay for it upfront, you can go to a loan association to get a mortgage loan. The loan association will lend you the money to buy the house, and you will pay it back over time with interest.
Loan associations were created to meet the needs of people with modest resources and income who were not served well by commercial banks, money lenders, and pawn shops. They were developed by social reformers, philanthropic benefactors, religious and fraternal organizations, trade unions, employers, and thrift entrepreneurs as a collateral type of banking or financial intermediation.