A personal loan is an amount of money that you borrow from a bank, building society or some other lender. Ordinarily, you'll receive a lump sum. In return, you agree to make regular repayments, usually monthly. Assuming you've taken out a repayment loan, which will usually be the case, some of the money you repay will go towards servicing the loan and the rest of your payment will be used to pay off capital and reduce the outstanding debt.