An internal link is a type of hyperlink on a webpage to another page or resource, such as an image or document, on the same website or domain. Hyperlinks are considered either "external" or "internal" depending on their target

An internal link is a type is a kind of hyperlink on a site page to another page or asset, for example, a picture or report, on a similar site or space. Hyperlinks are considered either "outside" or "inner" contingent upon their objective or goal.

An external link is a link that points to an external domain.
* Top SEOs believe that external links are the most important source of ranking power.
* External links pass "link juice" (ranking power) differently than internal links because the search engines consider them as third-party votes.
* Top SEOs don't believe that the "title" link attribute is used for rankings purposes.

Internal links are links that go from one page to a domain to a different page on the same domain. They are commonly used in main navigation.
These type of links are useful for three reasons:
* They allow users to navigate a website.
* They help establish information hierarchy for the given website.
* They help spread link juice (ranking power) around websites.

External - The link, that you point to "Other Website" & Also "The Other Website" point to your site., both consider as an external links.

Internal - The link, that you link back to "Yours Website"