Lending vs. Borrowing

Difference Between LendingĀ  and Borrowing

The lending and borrowing are two actions that are different in meaning and purpose. The lending is the act of giving money to someone with the intention to collect back the original amount given and the interest in case of a business loan after a certain period.

If bank loans you money in the form of commercial loan then the bank has the right to charge a certain amount of interest on money lent to you originally. The lending does not always include money, but it can also be objects.

You may also lend items to someone with the intention to collect back the items after a certain period. The borrowing includes taking money from another person or financial institution with an intention to repay the amount of money borrowed after a certain period. This is the main difference between the lending and borrowing.

It is understood that both the lending and borrowing are two different actions that are different in motive too. The purpose of lending money is to pick the interest on the amount of money lent to a person for a certain period.

On the other hand the aim of borrowing money is to use the money for certain purposes such as building family, medical expenses, hospital charges, school education, higher education, private functions etc.

Also in case of lending, the act of borrowing can also be done in terms of objects. In short we can say that you can borrow objects with an intention to give it back to the owner after a certain period, or better after use.

It is interesting to note that the economy of many countries depends to a large extent on lending and borrowing business.

 

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