Personal Loan

A personal loan is an unsecured loan that can be used for various purposes, including debt consolidation, home improvement, medical expenses, or major purchases. Personal loans are typically offered by banks, credit unions, and online lenders, with fixed interest rates and fixed repayment terms.

The APR (annual percentage rate) reflects the true cost of borrowing, including interest and any fees such as origination fees, application fees, or insurance. Comparing APRs across different lenders is more informative than comparing interest rates alone.

Personal loans can be secured (backed by collateral) or unsecured. Secured loans generally offer lower interest rates but require the borrower to pledge an asset as collateral. Credit scores, income, and debt-to-income ratios are key factors that determine eligibility and interest rates.