A loan is a sum of money that is borrowed and repaid over a certain period of time, typically with interest. Loans can be obtained from various sources, such as banks, credit unions, online lenders, and even individuals.
Borrowers generally use loans to make large purchases such as a home or a car, finance a business, or pay for unexpected expenses.
There are different types of loans, including secured loans and unsecured loans. Secured loans are backed by collateral, such as a house or a car, which the lender can seize if the borrower defaults on the loan. Unsecured loans, on the other hand, are not backed by collateral and are based on the borrower’s creditworthiness and ability to repay the loan.
The terms of a loan, including the interest rate, repayment period, and fees, vary depending on the type of loan, the lender, and the borrower’s creditworthiness.