What is loan

Vishal Vishwakarma

A loan is a sum of money that is borrowed by an individual, business or organization from a lender or financial institution. The borrower is obligated to repay the loan with interest over a specified period of time, usually in installments. Loans can be used for a variety of purposes, such as purchasing a home or car, paying for education, consolidating debt, or funding a business venture. The terms and conditions of a loan, including the interest rate, repayment schedule, and fees, are usually outlined in a loan agreement. Loans can be secured or unsecured, with secured loans requiring collateral such as a house or car to be put up as security, while unsecured loans do not require collateral but may have higher interest rates.