Declaring/Initializing Variables Inside Or Outside A Loop?

I've always wonder if there is diference when declaring and
initializing a varible inside/outside a loop.

What's a better practice?
Declaring and initializing variables inside a loop routine, like this:

for(var i=0; i<list; i++)
{
var name = list[i];
}

or outside a loop routine, like this:

var i;
var name;

for (i=0; i<list; i++)
{
name = list[i];
}

or are both the same....

As a programmer, i always try to practice good programming. I always
thought that by declaring and initializing the variable inside the
loop, i was creating a new memory space every time instead of just 1
time...

What do you think?