A personal loan is a type of loan that individuals can borrow from banks or credit unions for various personal expenses. Unlike specific loans, such as a mortgage for buying a home, personal loans can be used for anything from consolidating debt to funding a vacation. They usually come with fixed interest rates and set repayment terms, making it easier to budget. To obtain a personal loan, borrowers typically need to provide proof of income and a good credit score. The amount you can borrow often depends on your creditworthiness and financial situation. Repaying the loan on time can help improve your credit score.