A loan is a financial operation whereby a person (lender) grants an asset (normally an amount of money) to another person (borrower) in exchange for interest (the price of the money) through a contract or agreement between the parties.
Along with this concept, there are other terms such as the consideration (payment of instalments), which varies according to the characteristics of the credit and the term determined to pay the amounts pre-established by the lender and the borrower.
Another important concept within the loan is amortisation, which refers to the gradual repayment of the loan and which is also directly associated with the agreement between both parties, which will determine the duration and the interest obtained by the lender.