Personal Loan
A personal loan is an unsecured installment loan that can be used for nearly any purpose, including debt consolidation, medical bills, home repairs, or major purchases. You receive a lump sum and repay it in fixed monthly installments over a set term, typically 3 to 60 months. Personal loan APRs vary widely based on credit profile — from 6% for prime borrowers to 200%+ for subprime.
Personal loans are the broadest category of consumer installment lending. The defining features: unsecured (no collateral required), fixed-term, and flexible-purpose. Unlike auto loans (which finance a vehicle) or mortgages (which finance a home), personal loans aren’t tied to a specific use case.
What lenders look at
Personal loan underwriting varies by lender, but the standard factors are:
- Credit score and credit history
- Income (often verified through bank account linking or pay stubs)
- Debt-to-income ratio
- Employment stability
- State of residence (which affects what’s legally available)
Subprime personal lenders weight income and bank account behavior more heavily than credit score; prime lenders weight credit score more.
What APR to expect
Personal loan APRs span a huge range:
- Prime (740+ FICO): 6-24% APR
- Near-prime (670-739): 15-30% APR
- Fair (580-669): 25-50% APR
- Subprime (under 580): 35-200% APR
The same dollar amount can cost dramatically different totals depending on your credit profile. See our affordability calculator to estimate what you can comfortably afford.