What is a Personal Loan and How Does it Work?
A personal loan is when you borrow a fixed amount for personal needs (as opposed to for business needs) from a lender and agree to paying it back by instalments over a specified timeline. Personal loans usually have specific reasons like paying for a home renovation or vehicle.
Personal loans tend to have evidence of the debt in the form of a promissory note. Once you’ve fulfilled your obligations as a borrow (you’ve paid back the loan in full), the promissory note is retired.