Question

What is loan?How interest is paid for loan?

Answer 1

a thing that is borrowed, especially a sum of money that is expected to be paid back with interest.
An interest rate is the percentage of money paid by a borrower to the lender for the use of money. For most loans, the interest is added to the principal so that the interest that has been added also earns interest . Normally loan interest was expressed in APR, which is the interest rate compounded monthly.

Answer 2

Typically: a loan is a sum of money from one party to another.   Not all loans, however most loans, are issued with repayment stipulations that an extra amount of money, above what is borrowed, must be also repaid for the basic fact that the lender has and you  don't and therefore you agree to pay for the ability to borrow the sum.