A loan contract is a legal agreement between a borrower and a lender that outlines the terms of a loan. It specifies the amount borrowed, the interest rate, repayment schedule, and any fees associated with the loan. This document protects both parties by clearly stating their rights and responsibilities. In a loan contract, the borrower agrees to repay the loan amount, often with interest, over a specified period. If the borrower fails to meet the terms, the lender may take legal action or seize collateral, if applicable. Understanding the details of a loan contract is essential for making informed financial decisions.