With a personal loan, also known as PL, you borrow a predetermined amount at a predetermined interest rate.
You will receive the entire amount of the loan at once, and you will no longer be able to withdraw everything that you have repaid. That in contrast to a revolving credit.
When the personal loan is taken out, the amount of the monthly installment is fixed. The interest and repayment are known and the term is fixed.
The advantage of a personal loan is that you always know exactly where you stand. You pay the same amount every month and you know exactly how long it takes before you have repaid the loan in its entirety.
Interest on a Personal Loan
The interest rate used when taking out a personal loan is a little higher than with a mortgage because the lender does not have any collateral for the amount that you lend to you. But the interest rate is lower than the interest on taking out a revolving credit with the same lender. This is because the bank does not run an interest rate risk. This is finally fixed for the entire term.
If you want certainty about the term and repayment of your loan, opt for a personal loan instead of, for example, a revolving credit.
If you would rather be able to take back the repaid amount in the future, you should better take out an ongoing loan and forget the personal loan.
This means that you do not know in advance how long your loan will run and how high your monthly payments will be.
As long as you take out a loan before you take out a loan, you can put what you want for yourself. And especially what you can pay off within your financial possibilities. After all, you are entering into an obligation of many years.