A bank loan is a sum of money that a bank lends to an individual or business, which must be paid back over time with interest. Borrowers typically apply for loans to finance large purchases, such as a home or car, or to cover expenses like education or business operations. The bank assesses the borrower's creditworthiness before approving the loan. The terms of a bank loan include the interest rate, repayment schedule, and any fees. Interest rates can vary based on factors like the borrower's credit score and the type of loan. Common types of bank loans include personal loans, mortgages, and auto loans.