Loan terms refer to the specific conditions and agreements set between a borrower and a lender when money is borrowed. These terms include the interest rate, repayment schedule, and the total amount borrowed. Understanding these terms is crucial, as they determine how much the borrower will pay over time and the duration of the loan. Common loan terms also include the loan type, such as personal loans, mortgages, or auto loans, each having unique conditions. Additionally, terms may specify any fees, penalties for late payments, and the consequences of defaulting on the loan. Knowing these details helps borrowers make informed financial decisions.