A lender that lends money directly to a borrower is called what?

A lender that lends money directly to a borrower is called what?

• A. Organizational leader
• B. Primary lender
• C. Secondary lender
• D. Tertiary lender

Answer: (B)

A lender that lends money directly to a borrower is referred to as a primary lender. This term is used to describe financial institutions or individuals that provide loans directly to consumers for various purposes, such as mortgages, personal loans, or other types of credit. Primary lenders are typically banks, credit unions, or mortgage companies that assess the creditworthiness of borrowers and facilitate loans based on their financial standing and ability to repay. Primary lenders are distinct from secondary lenders, who usually purchase loans from primary lenders or provide funding on the condition that the loans back a security. By understanding this distinction, individuals can better navigate the lending landscape and identify the types of financing available to them through direct and indirect lending mechanisms.

A lender that lends money directly to a borrower is referred to as a primary lender. This term is used to describe financial institutions or individuals that provide loans directly to consumers for various purposes, such as mortgages, personal loans, or other types of credit. Primary lenders are typically banks, credit unions, or mortgage companies that assess the creditworthiness of borrowers and facilitate loans based on their financial standing and ability to repay.

Primary lenders are distinct from secondary lenders, who usually purchase loans from primary lenders or provide funding on the condition that the loans back a security. By understanding this distinction, individuals can better navigate the lending landscape and identify the types of financing available to them through direct and indirect lending mechanisms.