Personal loans are unsecured loans that come in either a lump sum or a revolving line of credit.
Lump sums, also called closed-end loans, usually carry a fixed interest rate, while lines of credit carry an adjustable rate. A line of credit may cost more than a closed-end loan because it moves with fluctuating interest rates. The shorter the term, the less the loan is going to cost. Either way, you must pay off everything when the three-year time limit comes up. To pay back lump sums, banks usually issue coupon books.