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You need a loan if you want to buy something (e.g. a house) and don’t have that much money on your side at once. The money, which is usually lent by banks, then has to be repaid within a certain period of time. In addition to this money, interest is also charged. Interest is the fee for the bank lending you the money. So you end up paying back more money than you borrowed. Payment in installments is usually agreed, so that part of the borrowed money is repaid every month. This payment each month is called the loan installment.
 
Example: You borrow 2,000 francs from the bank for a driver's license. You have agreed with the bank that you will pay back the money in 11 credit installments after one year. Then you pay back a total of 11 times (every month CHF 200). In the end, the bank gets 2,200 francs from you.
 
It is also important that the term of the loan (i.e. the time until the loan is paid off) should not be longer than the lifespan of a product. Example: A ten-year term for a used car makes little sense, since you may then have to pay off a car that you may no longer have and you may also have to finance a new car. In principle, it is possible to take out a loan before your 18th birthday, but your income should be very high and your parents must agree to it. Of course, the bank won't lend you the money because you're a nice person. As a rule, the bank requires collateral, such as the right to garnishment of wages, if you do not pay off the loan as agreed. Your wages can also be confiscated.

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