Personal loans are used for high-priced items like college tuition, furniture, TVs and even your daughter's wedding. Remember that when deciding on a personal loan, the item you finance should have a useful life, at least as long as the time it takes to repay the debt. For instance, if it takes three years to pay for a TV, the TV should last at least that long. Because the benefits of an education last a lifetime (i.e. better paying jobs), educational expenses are usually justified.

   There are three types of personal loans to choose from:

• Installment Loan
  The amount borrowed plus interest is repayed in monthly installments over a predetermined period of time. Installment loans are by far the most common type of personal loan.
  
  
• Balloon Loan
  You pay off the personal loan by making periodic installment payments with a large "balloon" payment at the end of the term. You need to be sure your income will stay at the same level to afford the balloon payment at the end.
  
  
• Single Payment Loan
  You repay the entire personal loan plus interest at a predetermined date in the future. Like the balloon payment, you need to be sure you will have the means to make the payment in the future.

   Once you have reviewed the personal loan sites, apply only for the one that best suits your needs. Making multiple applications may have an adverse effect on your credit report. It is always best to limit the number of credit applications that you make.