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Personal Loans 101 – What You Should Actually Know Before You Borrow

Written by:

Adam Beckles

Edited by:

Kristin Marino

Updated on September 4, 2025

personal loan affidavit form Many consumers are turning to personal loans for different reasons. As consumers come across emergencies that might require additional funds, or need money to cover their bills, these loans might seem like a good way to get help.

Personal loans are indeed a good option for many; however, it is important that all consumers have the correct information about personal loans. Consumers need to know what personal loans are and what they require before signing on the dotted line. Here is what you need to know about personal loans before you consider taking one out.

Fixed Repayment Periods
Just as you have to pay a car loan off in a certain amount of time, it is common for personal loans to have a fixed repayment period. The periods of time vary and it is advisable to pay off your loan in the least amount of time, and in a timely fashion (meaning, pay by the date it’s due). Not making payments on time may impact your credit score as well as reduce your chances of getting a lower interest rate the next time you apply for a loan. Paying your personal loan off early could also mean less interest rate charges for you in the future.
Unsecured or Secured?
Personal loans are usually unsecured. This means that the lender will not require collateral and is taking a higher risk. Personal loans are sometimes referred to as signature loans because the lender is only relying on the borrower’s signature as collateral. The not using collateral comes at a price though, so be aware of what an unsecured loan requires of you.
Higher Interest Rate
Due to the risk the lender is taking they are likely to set forth a higher interest rate for the loan. Nonetheless, some people might find that the high interest rate is still lower than a credit card, for example, that could offer them the same limit.

Part of the appeal of a personal loan is that it might be good for those with bad credit, who are unemployed, or who may not have the collateral needed for a different type of loan.

The Takeaway

Applying for a personal loan can be an easy process for those who may need to make home improvements, pay for medical costs that aren’t covered by their health insurance, business expenses, and more. AmONE can assist you in finding the right personal loan offer for the best possible interest rate. Contact us to learn more information about personal loans and to speak with one of our experienced Money Coaches.

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Advertiser Disclosure*. The financial products and services on this site are from advertisers from which AmONE receives compensation. Compensation may be based upon whether you click on certain links on this site or buy products or services from those advertisers. We do not receive compensation from consumers. The placement of advertisements on this site are based in part upon the compensation AmONE has or expects to receive from those advertisers. Placement of advertisements does not reflect our recommendation of any advertisers' products or services. Please consult a financial services professional before making any financial decisions. Our advertisers do not include all the financial products and service providers available in the marketplace.

Loan availability, rates, APRs (Annual Percentage Rate), and other terms vary by advertiser and borrower attributes, including borrower location. Lenders have a range of available APRs; only borrowers with excellent credit will qualify for the lower rates. As of 01/11/2024, our advertisers were offering loans to some consumers for as little as a 6.40% APR on a three-year $100,000 loan.

We do not provide financial products or services. Rather, AmONE provides administrative and marketplace services by attempting to connect consumers with service providers offering products and services such as debt settlement and personal loans. We do not take applications or make credit decisions. We may not be able to match you with any of our advertisers. Credit and other decisions and terms are determined by our advertisers based upon the consumer's submission of an application to the advertiser, which may obtain other information about the consumer from third parties. Approval for financial products and services by an advertiser is not guaranteed.

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