A personal loan is one that you obtain as an individual. It doesn’t require additional security or collateral and it tends to be one of the easier loan types to qualify for, with minimal documentation needed. A personal loan can be for debt consolidation, a small business startup, home improvements, car maintenance, unforeseen medical bills and even weddings.
Personal loans are installment loans, which means you pay a set monthly amount to the lender until the entire loan is paid back. Installment loans work wonders for your credit because they broaden your history, and as long as you’re making the right payments promptly, they boost your credit score over time.