A personal loan is a type of unsecured loan provided by banks, credit unions, or online lenders to individuals for various personal expenses. Unlike loans for specific purposes like mortgages or car loans, personal loans can be used for a wide range of purposes, such as consolidating debt, financing home improvements, covering medical expenses, or funding a wedding. Personal loans typically involve borrowing a fixed amount of money and repaying it in regular installments over a specified period, usually ranging from a few months to several years. Since personal loans are unsecured, they do not require collateral, but they often come with higher interest rates compared to secured loans. The loan approval and interest rates are usually based on factors such as credit history, income, and debt-to-income ratio. Personal loans provide individuals with financial flexibility and the ability to meet their personal needs or handle unexpected expenses.