<human>:  How does a bank loan work?
<bot>: A bank loan is a sum of money that is borrowed from a bank or other financial institution. It is usually paid back in installments over a period of time, usually with some interest. To qualify for a loan, the borrower must provide the bank with information about their income, debt, and credit history. When approved, the loan is usually disbursed directly to the borrower’s bank account and can be used to purchase a car, fund a business, or make a large purchase. The lender may also require collateral, such as a piece of real estate, to secure the loan. Payments must be made on time and after the loan is repaid, the borrower’s credit score may improve.