What is a Borrower?

A borrower is an individual or entity that is using money, assets, or services on credit. The concept most commonly applies to the lending of funds, where a borrower applies for a loan, and there is a credit evaluation by the lender. The lender may also require that the borrower provide collateral that the lender can access if the loan is not repaid in a timely manner. The borrower agrees to certain repayment terms and conditions as part of the loan agreement. When all repayment terms of the agreement have been fulfilled by the borrower, the underlying debt agreement is retired. If the borrower is unable to repay the loan, then the lender can pursue repayment through the legal system of the governing jurisdiction.

Examples of Borrowers

Here are examples of different types of borrowers:

Individual taking on a personal loan. John borrows $10,000 from a bank to renovate his kitchen and agrees to repay it over five years with interest.
Individual taking on a student loan. Sarah borrows $50,000 in federal student loans to pay for her college education.
Credit card user. Lisa borrows small amounts by using her credit card to make purchases and repays them monthly.
Small business owner. Mike borrows $20,000 from a local credit union to purchase inventory for his retail store.
Startup founder. A tech startup secures a $1 million loan from a venture fund to develop a mobile app.
Corporation issuing bonds. A large corporation issues bonds to borrow $500 million from investors to fund an infrastructure project.
Municipal bond. A city borrows funds by issuing municipal bonds to build a new library.
National government debt. A country borrows billions through treasury bonds to fund public healthcare initiatives.