Borrower

A borrower is a person or organization that takes possession of money, property, or other resources with an obligation to return or repay them under agreed terms. Borrowers stand in contrast to lenders, who provide the funds or items with an expectation of repayment or return.

In lending arrangements, a borrower receives a loan from banks, credit unions, or other lenders. The loan agreement specifies the principal amount, the interest rate, the repayment schedule, and any collateral or guarantees. The borrower commits to repaying according to the terms, and may be charged fees for origin, service, or early repayment.

Lending decisions assess the borrower's creditworthiness, income, and existing debt. Higher perceived risk can lead to higher interest rates, smaller loan amounts, or stricter covenants. Loans can be secured by assets or unsecured and rely on the borrower's ability to repay.

Failure to meet obligations constitutes default and can trigger penalties, late fees, collections, legal action, and damage to the borrower's credit history, limiting access to future credit.

Borrowers include individuals, households, small businesses, corporations, and government entities. They may borrow for consumer needs, investment, working capital, or public projects.

In libraries and other non-financial contexts, a borrower is someone who checks out items such as books, media, or equipment. The borrower is responsible for timely returns and may incur fines for late items.

Rights and protections: Many jurisdictions provide rules on disclosures, fair lending, debt collection, and privacy to protect borrowers and promote informed decision-making.