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How Personal Loans Work Credit comes in many forms, including credit cards, mortgages, automobile loans, purchase financing over time and personal loans. Each type of credit serves a certain purpose for a goal you may have, whether it's to buy a house or car, or to allow you to break up a big expense into more manageable monthly payments. A personal loan is a form of credit that can help you make a big purchase or consolidate high-interest debts. Credit can be a powerful financial tool, but taking out any type of loan is a serious responsibility. Before you decide to apply…