What Is a Personal Loan?
Published 2026-03-26 · Updated 2026-03-26 · Loanmit Editorial Team
A plain-language overview of personal loans, how they differ from other credit, and when consumers consider them.
Definition
A personal loan is money you borrow in a lump sum and repay in fixed monthly installments over an agreed term. Many personal loans are unsecured, so they are not backed by a car or home.
Personal Loans vs Other Credit
Credit cards are revolving: you can borrow again up to a limit. Personal loans are installment debt with a set payoff schedule. That difference affects budgeting and total interest.
Frequently Asked Questions
- Is a personal loan always unsecured?
- Many are unsecured, but secured personal loans exist. Read lender terms for collateral requirements.