Interest is the price paid by a borrower to a creditor for money placed at their disposal. Interest payments compensate the creditor for postponing consumption and for the risk that the borrower will default. Interest rates are set according to maturity, currency and creditworthiness.
Those who spend more than they take in go into debt. A loan allows a borrower to buy something without having to pay for it immediately. The price for being able to do this is that they pay more for it later (interest). There are different forms of loans, such as credit cards, leasing, consumer loans, mortgage loans, etc.
Those who take in more than they spend accumulate savings. There are a number of ways of investing savings; these include bank accounts, shares, bonds, investment funds, derivatives, real estate, etc. These options generally give rise to a trade-off – the higher the expected yield, the greater the risk. Thanks to diversification, however, the risk can be somewhat reduced, without minimising the expected yield.