A personal loan is a type of loan that is designed to help individuals meet their financial needs. Personal loans can be used for a wide variety of purposes, including financing a home renovation or repair project, paying for medical expenses, or covering the cost of a wedding or other large event or emergency.
Personal loans can also be used to fund businesses. Business owners can structure it as a loan to the company or shareholders with a legal repayment obligation to you. But you are still directly responsible to the lender, while your shareholders will be responsible to you.
A payday loan is a form of personal loan, just that instead of giving you a tenure of weeks or months, it is based on the next payday for repayment.
Personal loans are typically unsecured loans, which means that they do not require collateral, such as a home or car, to be taken out.
It’s important for borrowers to carefully review the terms and conditions of any personal loan — including the interest rate, fees, and repayment terms — before committing.
To better understand how to select the most suitable loan and what to watch out for, read our FAQ on how to compare loans and understand your dashboard.
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