what does this mean ?

hallo people
i have an interface called Rentable and the following explanation
/** When an item is loaned its return date should be set and a flag set to show that it is on loan.
* It should only be loaned if it is not already on loan
*/

i dont understand the meaning of setting a flag to show its on loan?

Flags are things used to indicate a state.
They can be enums (if there's lots of states) or simply a boolean (if there's only two).
In your case a boolean called onLoan would probably do. If it's true then it's on loan, if false then it's available to rent.