Loans are financial transactions in which one party, typically a borrower, receives a sum of money from another party, typically a lender, with the understanding that the borrowed amount will be repaid over time with interest.
Related terms
Interest: The cost of borrowing money or the return earned on savings or investments.
Principal: The original sum of money borrowed or invested before any interest is added.
Repayment period: The length of time during which a borrower must repay a loan, usually expressed in months or years.