A personal loan is a versatile financial tool that provides individuals with a lump sum of money for a range of purposes. Unlike secured loans, personal loans are typically unsecured, meaning they don’t require collateral, which can make them a convenient option for many borrowers. They are commonly used for consolidating high-interest debt, making significant purchases, funding home improvements, or covering emergency expenses.

Personal loans come with various interest rate options, including fixed rates that stay the same throughout the loan term and variable rates that can fluctuate. The repayment period can also vary, often ranging from one to seven years, allowing borrowers to choose a term that fits their budget. Monthly payments are generally consistent, making it easier to manage finances.