Personal Loans

The reasons people apply for personal loans today are numerous and diverse. Whether you need urgent money for debt consolidation or your child's tuition, for medical services or home repair, you’ll find these loans real saviors! Just like the reasons to apply for these loans are numerous, so are personal loan options. Before you hurry to a random lender, you'd better get detailed information on all aspects personal loans presume. Find the answers to the questions you may have, right here and right now, with the help of this article.  

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What personal loans imply

A personal loan is either a secured or unsecured credit that is provided for an ongoing or fixed term. Once you apply for a quick personal loan and it’s approved, the money you need will be sent to the account mentioned. The repayments are made on a monthly basis. The loan term is stated in months (from 12 to 36). Hinged on the lender, there may or not be a penalty for those borrowers who repay the loan earlier than stated.

The major types of personal loans offered in the market

1.     Secured personal loans. These loans are provided exceptionally on a secured basis. For this, the lender may accept certain personal assets, including vehicles, properties, and savings, and offer much lower rates for borrowing the money the applier requires.
2.     Unsecured personal loans. Unsecured personal loans, also called signature loans, don’t demand any personal assets for providing the funds you need. Only a signature is enough for them—hence the name. Perhaps the only disadvantage borrowers meet here is the high annual rate. Yet, if you won't be able to pay the money back, you won't risk your property, either.
3.     Auto title loans. This type of a personal loan is provided with the mere auto title secured. This means that the borrower can use his/her vehicle while he/she is paying off the debt.
4.     Debt consolidation loans. If the borrower intends to apply for a personal loan to pay off his other debts (credit card debts, bills, auto loans, etc.), getting a debt consolidation loan will help him save on interest and fees. This way he’ll be in charge of paying a single loan.
5.     Credit card debt consolidation personal loans. Today numerous people have multiple credit card loans. Consolidating all of them in one will help them benefit greatly.
6.     Payday loans. People with bad credit usually face problems in getting loans. Payday loans are offered particularly to these borrowers. They’re provided on short terms (between a week and a month) and for not that large a sum (from $100 to $1,000).
7.     Peer-to-peer loans. This is relatively a newer variant of getting the money you need. Here, borrowers and lenders have the chance to meet through third parties and cooperate beneficially.

The price of personal loans

The price of a personal loan is the fusion of several aspects: the interest rate (the basic cost the lender demands for giving you the money), the fees (not mandatory, yet quite often charges for late or missed payments, early repayment, etc.), and annual percentage rate (from 10 to 20 percent for ordinary borrowers and higher for those with bad credit).

Personal loan targets

Regardless their credit history, people can apply for personal loans, yet their history may directly impact the interest rate. It’s the lender's responsibility to decide whether to lend you the funds or not. Another factor influencing the amount and the interest rate of a personal loan is employment history. The next point to consider is citizenship. Temporary residents will have to provide a good credit history for getting a loan, while US citizens or permanent residents have a certain privilege here. The last aspect influencing the lender's decision is the borrower's age. The minimal age ranges between 18 and 21, depending on the state.

The amount of a personal loan

Large sums of money can be borrowed with personal loans. Most lenders offer from $1,000 to $50,000, yet there are some that are ready to lend around $100,000. For this, however, collateral via property is a must. Regarding payday loans, borrowers shouldn't expect more than $1,000.

Personal loans for bad credit borrowers

Having a clean credit history is definitely a great advantage. Yet, this does not mean one can't get a personal loan if one has a bad credit. There are lenders who provide loans for such people, yet the options are impressively limited.

When personal loans are approved

Nowadays, credit unions, banks, and alternative lenders provide quick access to the lent funds. As a rule, the money is transmitted to the account of the borrower within one business day.

Early repayment of personal loans

The lending company determines whether you’ll be charged for early repayment of your personal loan. Before signing the agreement, study all of the points, including this one.