A personal loan is an unsecured loan provided by financial institutions to individuals based on their creditworthiness, income, and other financial parameters. These loans are versatile and can be used for a variety of purposes, including consolidating debt, funding a vacation, covering medical expenses, or financing a wedding.

Personal loans usually come with fixed interest rates and repayment terms, making budgeting easier for borrowers. Since they do not require collateral, personal loans often have higher interest rates compared to secured loans, and approval is heavily influenced by the borrower’s credit score and financial history.