what is a loan  a loan is something that we have  borrowed  usually in the form of money or property  we eventually pay back the money with  interest  a loan is a form of credit it can be for  a one-time amount  or in the form of open-ended credit  when someone borrows money  we call the amount they borrow the  principal  the borrower pays the principal back in  regular payments 

 that is in installments  the loan agreement specifies when to  make the payments and how much they  should be  the interest that the borrowers pay  annually on the amount of their loan  is the apr  apr  stands for annual percentage rate  before signing any agreement with your  bank or other lender  it is important to find out what the apr  is  according to the financial times online  dictionary  a loan is  money lent  that is provided by a lender to a  borrower  normally in return for interest and  repayable at a specific date  also the act of lending something

  especially money  what is a secured loan  this type of loan is secured by an asset  that is  collateral  if the borrower fails to pay back the  money  the bank may seize the collateral  examples of secure loans  include a mortgage or auto finance  if the borrower fails to repay the money  the lender can seize for example  the person’s house or their car  unsecured loans are not secured by  assets  if the borrower defaults the lender  cannot recover the money  

for the bank  unsecured lending is riskier  hence interest rates are higher  examples of unsecured loans include  credit cards  student loans and personal lines of  credit  millions of people and businesses take  out loans every year worldwide  if you are thinking of borrowing money  do some research before you commit  yourself  check out what the abr is  whether there are any penalties  and other clauses  you