Banking guide

How personal loans work

A personal loan is an installment loan with a fixed repayment schedule. Customers receive funds up front and repay principal plus interest over the selected term.

Application review

A lender may review identity, income, existing obligations, credit history and requested loan purpose. Prequalification is not the same as final approval.

Loan cost

The total cost is driven by principal, APR, term length, fees and payment timing. Longer terms often reduce monthly payments but can increase total interest.

Repayment

Payments are usually due monthly. Setting up alerts or automatic payments can help avoid missed payments and late fees.

Payoff

A payoff quote shows remaining principal, accrued interest and the date through which the quote is valid.

This article is general information and does not replace account disclosures, loan agreements or personalized advice from a financial institution.