 TITLE: How to Choose Between a Personal Loan and a Credit Card CONTENT: What Is a Personal Loan?\n------------------------\nA personal loan allows you to borrow a set amount and repay it in roughly equal monthly payments over a predetermined period of time. Loans are a form of installment credit and are typically used to make a large purchase or to consolidate debt. Most personal loans have a fixed interest rate, which means your monthly payment amount won't change over the course of the loan due to rate fluctuations.\nSince loans have a preset repayment term of months or years, you know when it will be fully paid off. Your monthly payments go toward paying back the principal (the amount you borrowed) along with the interest. Loans also must be borrowed in set amounts, meaning you may end up with a loan that's larger than what you need—borrowing $2,000 to cover a $1,850 purchase, for instance.\nPersonal loans can be used for a variety of purposes, such as:\n*   Wedding\n*   Home repair or renovation\n*   Medical procedure\n*   Financial emergency\n*   Debt consolidation\nMost personal loans are unsecured, which means no collateral is required. This is in contrast to secured loans, such as an auto loan or mortgage loan, where the item you're financing is used as collateral. In other words, if you can't make payments on an auto loan or mortgage, you risk losing your car or house. Inability to repay an unsecured personal loan won't directly result in the loss of property, but it could have major consequences on your credit and land you in court. END