What is lender?

A lender is someone who gives you money to use now, and you promise to give it back later.

Imagine you want to buy a big toy, but you don’t have enough coins in your piggy bank. A lender is like a friend who says, “I’ll lend you the extra coins, just remember to give them back when you can.” That’s how a lender works: they give you money today so you can do something exciting or important now, and then you pay it back later.

When you borrow from a lender, you might have to give them some extra coins as a thank-you, that’s like interest. It’s just a little bit more than what you borrowed, so the lender feels happy about helping you out.

You can think of a lender as a friend who helps you buy that big toy today, and you promise to return the money with a few extra coins later. That way, both of you are happy!