Setting up a Loan Account

I have a general question in relation to setting up a loan account.
First, I created a new Loan Account and entered the loan amount into the principal field. As it is a new loan the balance remains zero. Can you explain to me the purpose of the Escrow account? Do I create an Escrow account - similar to the way I created a savings account? Or is this account simply the account here I make repayment from such as my Everyday Saving Account?