A personal loan is money you borrow from a bank or lender that you can use for almost anything, like paying for a wedding, medical expenses, or consolidating debt. Here’s how it works in simple terms:

1. Loan Amount: You can borrow a specific amount of money, usually between a few thousand to several lakhs.

2. Fixed Term: You agree to pay back the loan over a set period, often ranging from 1 to 5 years.

3. Monthly Payments: You repay the loan in equal monthly installments, which include both the loan amount (principal) and interest (the cost of borrowing).

4. Interest Rate: This is the percentage the lender charges you for the loan. A lower interest rate means you pay less over time.

5. Unsecured: Most personal loans are unsecured, meaning you don’t need to provide collateral (like a house or car) to get the loan.

6. Use: You can use the money for almost any personal expense, but it’s important to borrow responsibly.

In summary, a personal loan is a flexible way to borrow money for personal needs, with fixed monthly payments and no collateral required.