Definition

Noun: A sum of money lent to an individual for personal, non-business expenses. This type of loan is typically unsecured, meaning it does not require collateral. Approval is primarily based on the borrower's creditworthiness, financial history, and perceived ability to repay.

Usage

A "personal loan" is used to finance individual needs. It is a formal financial product offered by banks, credit unions, and online lenders. - It is typically taken out for a specific, personal purpose. - It involves receiving a lump sum that is repaid with interest in fixed monthly installments over a set period. - The lender's decision relies heavily on the borrower's personal financial profile.

Examples

Advanced Usage

• "To secure a personal loan": To successfully obtain a personal loan from a lender.
  • With her excellent credit score, she found it easy to secure a personal loan.
• "Unsecured personal loan": Explicitly describes the most common type, which is not backed by an asset.
  • An unsecured personal loan often has a higher interest rate than a secured one.

Variants and Related Words

• Loan (n): The broader category; a sum of money that is expected to be paid back with interest.
• Unsecured loan (n): A loan not protected by collateral, similar to a standard personal loan.
• Debt consolidation loan (n): A specific type of personal loan used to combine multiple debts into one.

Synonyms

• Consumer loan: A loan for personal, family, or household purposes.
• Signature loan: Another term for an unsecured loan based primarily on the borrower's credit and promise to repay.

Related Phrases

• "To take out a personal loan": The standard phrase for the action of obtaining one.
  • They decided to take out a personal loan for the wedding expenses.
• "Personal loan agreement": The formal contract outlining the terms of the loan between the borrower and lender.
  • He reviewed the personal loan agreement carefully before signing.

Noun

1. a loan that establishes consumer credit that is granted for personal use; usually unsecured and based on the borrower's integrity and ability to pay