That special project that you've planned is sure to make a difference in your life personally, professionally, or spiritually. Don't let the opportunity slip away with delusions of lottery winnings or a call from Deal or No Deal! If you need to create your own windfall of cash, a personal loan may be your best option.

The personal loan is an extension of credit provided by a financial institution. Unlike car loans, student loans, or mortgage loans, the funds borrowed are not designated for a specific purpose. Potential uses could be business start-up costs, a once-in-a-lifetime vacation, a dream wedding-literally anything you desire.

Types of Personal Loans

Personal loans can be either secured or unsecured.

• A secured personal loan requires collateral. This is usually a savings account, CD, or stock portfolio. Secured loans are easier to obtain than unsecured loans, particularly if your credit is less than stellar.
• An unsecured personal loan requires no collateral, but it will likely carry a higher interest rate and more restrictive terms.

The repayment structures for personal loans usually fall into one of three categories:

• Installment. Similar to a car loan, an installment loan has fixed interest and monthly payments.
• Balloon. A balloon loan is structured with lower monthly payments and a large "balloon" payment due at the end of the term.
• Single Payment. In this scenario, the lender requires just one payment of interest and principal at a future date. The single payment structure is typically reserved for very short-term borrowing.

Obtaining a Personal Loan

Since each lender has its own defined terms for personal loans, it's vital to shop around. Start with your bank; as an existing customer, you may be offered a discounted rate. Online banks and lending websites are also great resources. Collect several offers and compare terms. Once you pick the program that suits you best, your lender will walk you through the borrowing process.

A personal loan can help you make that dream a reality, and it's much easier to plan than winning the lottery. Is that opportunity knocking?