Once you get approved for a personal loan, the funds you receive will be disbursed in a lump sum. Depending on the lender or bank that you choose to borrow from, you could get the money in a few weeks, or even a few days. You’ll then make equal monthly payments for the duration of your repayment period.
Personal loans come in two forms: secured and unsecured.
- Secured loans require you to put up collateral, which could be your home or property. If you fail to pay back your loan, the bank could seize that collateral.
- Unsecured loans don’t require you to put up anything as collateral but typically require a higher credit score. If you fail to pay back an unsecured loan, you run the risk of being sued or having a lawsuit filed against you by the lender or bank.