The process of a loan involves submitting an application to a lender that includes your financial information, such as your credit score, income, and debts. After reviewing your application, the lender will determine your eligibility for a loan, the interest rate and loan terms, and whether or not you need collateral. Once you’ve been approved for a loan, you can sign the loan agreement and receive the funds.

There are two main types of personal loans: Choose Best Loan option secured and unsecured. A secured loan is backed by collateral like a house or car. Since there’s less risk involved, lenders are often more likely to approve secured loans and may offer lower interest rates. On the other hand, an unsecured loan isn’t backed by collateral and is more difficult to get approved for since there’s more risk involved. Interest rates on unsecured loans tend to be higher than those on secured loans.