There are several reasons you might need to take out a loan, like for purchasing a house or a car. Maybe you need money to pay for college tuition or room and board, or perhaps you have a large home improvement project to finance. The point is, almost everyone takes out some kind of loan in their lifetime, even if it's just opening a credit card account. In any of these situations, it pays to know the basics of what a loan is and how it works. All loans come with several basic components, including the term, the interest rate, miscellaneous costs, and penalties. In this course, we'll take a look at each one in more detail.