What is a Loan? A loan is a sum of money borrowed from a lender that must be repaid, usually with interest, over a specified period. Loans can be used for various purposes, such as buying a home, financing education, or covering unexpected expenses. Loans can be a valuable financial tool when used responsibly. Always do your research, understand the terms, and assess your ability to repay before taking on debt. A well-planned approach to borrowing can help you achieve your financial goals without compromising your financial health.