An internal link is a link that goes to the same domain (e.g., domain.com to domain.com/page2.html) is considered an internal link, and it can also include links to media files, downloads and more.
There are cases where links within the same domain may be considered external, such as when there are various different sub- domains. Anchor text refers to the specific text used in a text-based link to another page.
The anchor text used as the hyperlink helps the search engines to understand the relevance to the target, and can improve the user experience as well as the website ranking.