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Discussion
Say you want to make a big purchase, like a new phone or car, but you don't have all the cash on hand to buy it upfront.
A loan can bridge the gap between "I wish I had enough money to buy that" and "I can get it today." When you take out a loan (from a bank, financial institution, or sometimes another person), you're essentially borrowing money with the promise to pay it back over time.
Why might a bank want to give out a loan? What do they get out of it?