Loan A loan is money that you receive now but do not fully own yet. It is given to you by a lender, such as a bank, school, or another organization, with the agreement that you will return it later. Loans are commonly used for big needs like education, transportation, or starting a small business. When you take a loan, you agree to specific rules: How much money you are borrowing How long you have to pay it back Whether interest will be added Example: You take a $1,000 loan to help pay for school supplies or a car repair.