A loan is a transfer of a sum of money with a binding commitment to repay capital of an equal or, with added interest, higher value. Loans are usually granted by an authorised company or credit institute or a certain subject who/which, in order to be given the loan, has to pass a series of preliminary investigations to evaluate the applicant’s financial and professional situation in order to duly assess the risk of insolvency, i.e. impossibility to pay back the agreed sum.

A loan is generally applied for to fund a costly purchase of certain goods (such as a car, home or furniture), however it can also be constituted by a smaller sum (for purchasing electrical appliances, clothes, etc.). Another distinction can be made between special purpose and non-special purpose loans, depending on whether the applicant is obliged to inform the lending institute about how the loan will be used.