Personal loans are fairly straightforward financial products. A personal loan is where you borrow a specific amount of money, usually from a financial institution, and then repay the debt with interest in equal payments over an agreed term.
Personal loans offer the general advantages of being cheaper on average than the closest alternative (credit cards) as well as giving the discipline of a repayment schedule.
Many personal loans allow the borrower to make extra repayments. Every dollar you repay above the required repayment shortens the life of the loan as well as the overall cost.
There are two different types of personal loans that can be taken out.
- Secured Personal Loan
- Unsecured Personal Loan