ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

What is a Personal Loan?

Updated on October 8, 2009

How much do you need?

You can receive as much cash as your loan qualify's for.
You can receive as much cash as your loan qualify's for.

Personal Loans

A personal loan is an amount of money that is borrowed from the bank. When you take a personal loan there is the decision to go three years or four years. Applying for a personal loan has gotten easier in the digital age but nothing is safer than applying in person at the institution you wish to borrow from. The uses for a personal loan are numerous but include: paying off debt, purchasing an expensive item like a new bedroom set, remodeling your home, and paying for medical expenses just to name a few.

When choosing a method of paying for the above mentioned expenses, keep in mind that personal loans are an installment debt. This means that you have a determined number of payments and each payment is the same. Furthermore, once the loan is paid off that is it, no more loan payments. With credit cards, they are revolving debts that continue to grow in balance and will still be around even if paid off.

To obtain a personal loan you have to have a job and a decent credit score. The job is self explanatory, the credit score is a little more in depth though. To secure a personal loan with a good interest rate your credit score needs to be over 600. A credit score of 650 is the national average. You can go to any of the credit bureau’s websites to request a free credit report.

$15,000 is the average personal loan maximum. The amount you can receive will depend on the guidelines for each loan, your overall credit rating, and your income. A personal loan can easily be confused with a line of credit. The difference is that a personal loan is an amount of money given to you by the financial institution, and a line of credit is an amount of money you have access to (credit line) of which you can use all at once or you can take only what you need when you need it.

When you request a personal loan you can get either a secured loan or an unsecured loan. The difference is in the names. Secured loan means that you have placed something worth the amount of the loan as collateral. If you fail to make the payments on a secured loan the bank can secure the collateral to get their money back. An unsecured loan just means that there is no collateral on the loan. You can expect to pay a higher interest rate on an unsecured loan because the risk to the bank is higher.

In choosing the term of the loan some things to consider are how much you are getting and how long you want to take in paying the money back. For larger amounts a term of 48 months is common, but for smaller amounts you can pay off the loan in two or three years. For very small loans you can pay them off in one year. The term should reflect how much you are comfortable paying each month. Keep in mind that the longer you take to pay back a loan the more you will pay in interest.

Personal loans have many uses and are a great way to consolidate your other debts. With a personal loan you can combine three or four monthly payments of 100 dollars into one 250 dollar loan payment. If this is the route you wish to take make sure that the debts you are consolidating cannot be used for anything else. Debt accumulation is a terrible cycle that has to end. The easiest way to do this is by securing a personal loan to pay off those debts and enrolling in a debt management course. You can use different methods of banking to make the payments on your personal loan.


    0 of 8192 characters used
    Post Comment

    • wesleycox profile imageAUTHOR


      9 years ago from Back in Texas, at least until August 2012

      Thanks for the comments

    • mattylll profile image


      9 years ago

      Nice content!


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)