A personal loan is a fixed-amount loan repaid in scheduled monthly installments over a set term. It's one of the most flexible borrowing tools available to consumers, and it can be used for almost anything from consolidating debt to funding a major expense.
Fixed amount, fixed payment
When you take out a personal loan, the lender deposits a single lump sum into your account. You then repay it in equal monthly installments — usually with a fixed interest rate — until the balance reaches zero.
Unsecured by default
Most personal loans are unsecured, meaning you don't have to put up collateral. Lenders evaluate your creditworthiness based on credit history, income, and overall ability to repay.
How they differ from credit cards
Credit cards are revolving credit with variable rates and minimum payments that can keep you in debt for years. A personal loan has a defined payoff date and predictable payments.
Example scenario
If you borrow $15,000 at a 12.99% APR over 60 months, your estimated monthly payment is roughly $341, with about $5,469 in total interest paid over the life of the loan.
This article is for educational purposes only and does not constitute financial, legal, or credit advice. Loan approval, rates, and terms are determined by participating lenders and are subject to eligibility, underwriting, and applicable law. Not all applicants will qualify.