Out of the soil of the post-apocalyptic credit graveyard shoots the skeletal hand of a forgotten lending practice. Banks are once again busting out “personal loans” to help finance what might otherwise be just out of reach for consumers. Here’s how they work:

1. You borrow a lump sum
2. The interest rate – how good it is depends on your credit score – is fixed for the term of the loan
3. You make the same payment every month…
4. …Until the loan is paid off.
5. The End.

No variable rates or juggling rates for different purchase categories, and no losing your house. If you fail to make good, of course there are late fees and collection agencies. Otherwise it’s pretty straightforward. So is paying in full and in cash, but it’s interesting to see how banks are creeping back into lending.

A Personal Loan: Better Deal than a Credit Card? [Moneywatch]

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