A borrower is an individual or entity that takes out a loan from a lender, typically to finance a purchase or investment. Borrowers agree to repay the borrowed amount, known as the principal, along with any interest, over a specified period. Common types of borrowers include individuals seeking mortgages for homes and businesses looking for capital to expand operations. Borrowers are assessed based on their creditworthiness, which is determined by their credit history and financial stability. This assessment helps lenders decide whether to approve the loan and what interest rate to offer. Responsible borrowing can lead to improved financial opportunities, while excessive borrowing can result in debt problems.