Who is the Lender?

• A. The borrower
• B. The guarantor
• C. The person or institution that provides funds with the expectation of repayment
• D. The collateral

Answer: (C)

The lender is the party that provides funds with the expectation of repayment. In a loan, this entity advances the money to the borrower and expects the funds to be paid back, usually with interest. Banks, credit unions, or private individuals can act as lenders. The borrower is the one who receives the funds and must repay. The guarantor is someone who promises to cover the debt if the borrower defaults, not the source of the funds. Collateral is an asset pledged to secure the loan, serving as security for the lender, but it is not the lender itself.