What is a Loan? A Complete Guide to Understanding Loans

A loan is a financial tool that allows individuals or businesses to borrow money from banks, NBFCs, or financial institutions with an agreement to repay the amount over time, usually with interest. Loans can be used for various purposes such as education, medical needs, business expansion, buying property, or handling emergencies. They are broadly categorized into secured and unsecured loans, depending on whether collateral is required. Understanding loan types, eligibility, interest rates, EMIs, and repayment terms helps borrowers make informed decisions and manage finances responsibly.