A personal loan is a type of borrowing that allows individuals to access funds for various purposes, such as consolidating debt, financing a big purchase, or covering unexpected expenses. Unlike specific loans, like a mortgage or car loan, personal loans are typically unsecured, meaning they don’t require collateral. Borrowers receive a lump sum and repay it over time with interest. These loans can be obtained from various sources, including banks, credit unions, and online lenders. The approval process usually involves a credit check and assessment of the borrower’s financial situation. Personal loans can be a helpful financial tool when used wisely, but it’s essential to understand the terms and conditions before committing.