Personal Loans

Understand when it’s a good time to get a personal loan, what you need to know before getting a loan such as interest rates and risks associated with persian loans as well as the best lenders to consider.

Frequently Asked Questions
  • What are the tax consequences of personal loans?

    Personal loans are not counted as income and are therefore not subject to federal income tax. Interest on personal loans is not tax deductible as with mortgage loans, however. If personal loans are ever partially or completely discharged or forgiven as part of a personal bankruptcy or a debt restructuring the amount not paid will be considered income and will be subject to federal income tax.

  • Do personal loans affect credit scores?

    Applying for one or more personal loans can affect your credit score, as lenders must pull your full credit report before approving a loan in order to determine your creditworthiness. A full credit check, also known as a hard pull of your credit, can temporarily lower your credit score by a small amount. How you maintain the status of your personal loan also affects your credit score. If you make payments on time and in full it will help your credit score and if you don’t it will hurt your score.

  • Are there risks associated with personal loans?

    As with taking on any type of debt, personal loans can present certain risks - the biggest being not being able to service the debt in the form of making monthly payments. This can lead to damaged credit, having the debt go into collections and potentially having to take drastic steps like declaring personal bankruptcy.

  • Are credit cards considered a personal loan?

    Credit cards are similar to personal loans in that they are extensions of unsecured credit. However, personal loans are generally lump sum loans made by lenders to consumers with a specific repayment term and fixed interest rate.  Credit cards are revolving lines of credit with balances that can be paid back over time if not paid in full each month.

  • What should you know about personal loan interest rates?

    Interest rates on personal loans can vary significantly based on the credit score of the borrower as well as income level, amount borrowed and the lender involved. Most personal loans are made at fixed interest rates but variable interest rates that are indexed to the prime rate will likely become more common in a rising rate environment as lenders seek to keep consistent profit margins.

Key Terms

Explore Personal Loans

Man considers not getting a personal loan
When Are Personal Loans a Bad Idea?
Couple considering bank vs. credit union
Banks vs. Credit Unions: Which Is Best for Taking Out a Personal Loan?
Couple looks over their credit after getting a personal loan
How Long Do Personal Loans Stay on Your Credit?
Man reviews personal loan application on computer
How to Manage a Personal Loan
Man looking over loan information for the IRS
Should I Use an IRS Payment Plan or a Personal Loan to Pay My Taxes?
Couple filling out application for a personal loan
What to Say When Asking for a Personal Loan
Home loan lender goes over options with a family
Personal Loan vs. Home Improvement Loan: What’s the Difference?
Man applying for a secured loan
Secured vs. Unsecured Loans: What’s the Difference?
Woman looking over personal loan documents
What’s the Lowest Acceptable Credit Score for a Personal Loan?
Woman looks over loan documents
Getting a Personal Loan with a Co-Signer
Woman worried she won’t be able to pay her personal loans
What Happens If You Don’t Pay Back a Personal Loan?
Man looking over personal loan documents
What Is the Average Personal Loan Amount?
Personal Loan vs. Mortgage
Woman checking her loan documents
Credit Builder Loans vs. Personal Loans: Everything You Need to Know
Top Reasons for a Personal Loan
What Credit Score Do You Need for a Personal Loan?
Personal Loan vs. Debt Consolidation Loan: What’s the Difference?
Balance Transfer vs. Personal Loan: What’s the Difference?
An executive uses a smart phone.
What Is a CD-Secured Loan?
Personal Loans
How Many Personal Loans Can You Have at Once?
Personal Loans
What Are the Benefits of Obtaining a Personal Loan?
Personal Loans
How Do Personal Loans Work?
Man looking over papers
Payday Loans vs. Personal Loans: What’s the Difference?
Best Secured Personal Loans
Best Secured Personal Loans of 2023
Best Solar Panel Loans
Young couple looking at pregnancy trimester ultrasound IVF loan
Best IVF Loans
Man going over jumbo loan options online
Jumbo Loan
Two men shaking hands
Signature Loan: Meaning, Overview, Examples
People shaking hands
What Is Peer-to-Peer (P2P) Lending? Definition and How It Works
What Is a Lawsuit Settlement Loan?
8 Cheaper Ways to Raise Cash Than Car Title Loans
Should You Make a Personal Loan to Family?
Are Personal Loans Considered Income?
What to Know About Payday Loans
What Is a Payday Loan? How It Works, How to Get One, and Legality
Collateralization: Definition, How It Works, Examples
Cash Advance: Definition, Types, and Impact on Credit Score
Can Personal Loans Be Included in Bankruptcy?
The Risks of Payday Loans
What Are the Basic Requirements to Qualify for a Payday Loan?
Are Personal Loans Tax-Deductible?
A woman seated at a kitchen table holds a document and peers at a laptop screen. In the background a young woman relaxes in an easy, television remote control in hand.
How to Get a Personal Loan
Woman working from home
How to Get a Credit Union Personal Loan
A woman sitting on a sofa, unemployed, looking for a job
How to Get Personal Loans With No Income Verification
mother Handling financial bills with Installment Loans
7 Best Installment Loans of September 2023
Is SALT Blockchain-Based Lending the Future of All Personal Loans?
Can Personal Loans Be Transferred to Another Person?
A woman in a cafe looks at an open laptop.
How to Get a Personal Loan Online
Couple trying to pre-qualify for a loan
How to Pre-Qualify for a Loan
 financial stability for Low-Income loans
How to Get Low-Income Loans: Everything You Need to Know
8 Possible Risks of Unsecured Personal Loans
Car Title Loan
How Personal Loans Affect Your Credit Score
How Personal Loans Affect Your Credit Score
Documents Needed to Get a Car Title Loan
Car Title Loan Requirements
Title Loans vs. Payday Loans: What's the Difference?
Two women review documents.
Personal Loans vs. Credit Cards: What’s the Difference?
Swingline Loan: Definition, Use in Business, and Example
Stretch Loan Definition
NetCredit Recirc logo
NetCredit Personal Loans Review
Business woman thinking about personal loans
Best Personal Loans With No Credit Check
Engineer working underneath car on lift in car service center
Best Auto Repair Loans
Close up of adult woman checking her bills at home, personal loans
Best Low-Interest Personal Loans

Personal Loans