What context can I use each word in?
Learn when and how to use these words with these examples!
loan
Example
I need to take out a loan to pay for my college tuition. [loan: noun]
Example
The bank agreed to loan me the money I needed to start my business. [loan: verb]
liability
Example
The company faced a huge liability after the accident at their factory. [liability: noun]
Example
He was worried about the liability he would face if he couldn't pay back his loans. [liability: legal responsibility]
Good things to know
Which word is more common?
Loan is more commonly used than liability in everyday language, as it is a more general term that covers a wider range of financial transactions. Liability is a more specific term that is commonly used in legal and financial contexts.
What’s the difference in the tone of formality between loan and liability?
Liability is a more formal term than loan, as it is often used in legal and financial documents. Loan is more versatile and can be used in both formal and informal contexts.
