A “personal loan” is a pre-arranged/defined amount of money given to an individual from a credited or authorized lender, like a bank or credit union, for the person’s own personal use.

In other words, a personal loan is not for business, investments or for the purchase of a home but maybe for a holiday, the lounge you always wanted, that sexy new plasma T.V or Bose HiFi System.

The amount lent will be calculated on a number of factors such as the person’s credit rating, current income level and any outstanding debts they may have.

Personal loans are sometimes called or known by the name of consumer loan or consumer credit.