A personal loan is a versatile financial tool that allows individuals to borrow a specific amount of money from a bank, credit union, or online lender, typically with a fixed interest rate and a predetermined repayment term. Unlike other types of loans, such as mortgages or auto loans, personal loans are unsecured, meaning they do not require collateral like a home or a vehicle. Borrowers can use personal loans for various purposes, including consolidating debt, covering unexpected expenses, financing home improvements, or even funding major life events like weddings or travel.