In this article, we’ll cover personal and business loans: what you can use them for, why you might get them and the different amounts or terms you can expect from each. Fees, rates and borrowing amounts can vary widely, even among loans of the same type, so make sure to do your research on a particular loan or lending product before applying.
Let’s look at the differences between business loans and personal loans.
What is a personal loan?
A personal loan is a way to borrow money to cover certain costs and pay it back at a given fixed interest rate over a set period. Personal loans are usually unsecured, which means you don’t need to put up any kind of collateral to receive them. Generally, the amounts are lower than a business loan.
For any kind of loan, you may receive an interest rate, loan amount and loan term based on your current income and other factors including creditworthiness. That being said, once you’ve been approved, it’s good practice to check your specific interest rate to ensure you can keep up with payments.
What can you use a personal loan for?
You can use a personal loan for almost anything. Whether you’re looking to consolidate debt into a single, manageable payment or planning to make improvements to your home, a personal loan may be a financial solution.
Reasons to get a personal loan
Emergency or unexpected expenses
There are several reasons you might get a personal loan. If you have an unexpected expense, like car repairs, a personal loan can be an option. In these cases, it’s typically best to use a personal loan for covering an expense with a precise amount, since you’ll receive your personal loan in a single lump sum.
At Citi, you can submit an application in minutes and receive a response in less than 60 seconds. If you have a Citi bank account, you can even receive funds the same business day1.