There are certain situations and circumstances that will require filing for a personal loan. Some loans are meant for a specific purpose. Examples of these are auto loan for cars, mortgage loan for a new home, and student loan for college tuition. A personal loan, on the other hand, can be used for any purpose. Some lenders will require you to inform them of the reason or use of the loan, but most of the time they don’t. As long as you have a valid and legal reason, you can qualify for a loan; and you can use the amount for any purpose you have in mind. You have to be familiar with personal loans before you apply for it. First of all, it does not require collateral. A home loan will have the house as collateral while the auto loan will have the car. These loans are called secured loans. Without the collateral requirement, personal loans are unsecured loans. This means that the interest rate will be higher.