A loan is a quantity of money taken from a lender or a bank that you must pay back later. You are usually required to pay back the original amount plus an extra fee called interest over a set amount of time.

Loans are generally categorized into two types:

• Secured loans: These require collateral, such as a house or a car, which the lender can take if you fail to repay the money.
• Unsecured loans: These do not require collateral and are granted based on your credit history or financial reputation.

Common examples include mortgages for homes, personal loans for private expenses, and business loans for company operations. Each loan comes with specific rules regarding interest costs and the timeline for repayment.