A personal loan is money borrowed from a bank or financial institution that you can use for almost any purpose, like covering medical expenses, funding a wedding, or managing an emergency. Unlike some other loans, a personal loan is usually unsecured, meaning you don’t need to offer any asset as collateral.
The loan is repaid in fixed monthly installments over a set period, along with interest. The interest rate and loan amount depend on factors like your credit score, income, and repayment history. Personal loans often have a quicker approval process compared to other loans, making them a convenient option in urgent situations.
However, since these loans are unsecured, the interest rates might be higher than secured loans. Before taking a personal loan, it’s important to assess your financial situation and ensure you can repay it on time to avoid additional charges or impact on your credit score. Personal loans are flexible and can provide quick financial relief when used responsibly.