Personal Loan

A personal loan allows you to borrow money to pay for personal expenses and then repay those funds over time. Personal loans are a type of Loan allows you to obtain a lump sum of funding. For example, you might use a personal loan to cover:

Moving expenses
Debt consolidation
Medical bills
Wedding expenses
Home renovations or repairs
Funeral costs
Vacation costs
Unexpected expenses

Types of Personal Loans

Personal loans may be secured or unsecured. A secured personal loan is one that requires some type of collateral as a condition of borrowing. For instance, you may secure a personal loan with cash assets, such as a savings account or certificate of deposit (CD), or with a physical asset, such as your car or boat. If you default on the loan, the lender could keep your collateral to satisfy the debt.

An unsecured personal loan requires no collateral to borrow money. Banks, credit unions, and online lenders can offer both secured and unsecured personal loans to qualified borrowers. Banks generally consider the latter to be riskier than the former because there’s no collateral to collect. That can mean paying a higher interest rate for a personal loan