There are many reasons you may want to take out a personal loan
There are many reasons you may want to take out a personal loan. You may have medical debt or need to fix your car. You may be planning something exciting, like a wedding or a vacation. Whatever your reason, it is good to know the different types of personal loans and how to go about getting one
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LoanMart has been a trusted source for auto title loans and personal loans for more than a decade with over 250,000 satisfied customers. Services are offered in the states of Delaware, Florida, Illinois, Indiana, Kentucky, Michigan, Mississippi, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas and Washington.
- Minimum loan amount: $1,000
- Maximum loan amount: $50,000
- Loan terms: 1 to 5 years
PersonalLoans.com provides an easy and convenient way for consumers to be connected with a personal loan through their network of lenders and lending partners. Their online service can enable you to get a loan of between $500 and $35,000, right from your home or office, or even on the go through your mobile device.
- Minimum loan amount: $500
- Maximum loan amount: $35,000
- Loan terms: 3 months to 6 years
BEST CREDIT LOANS
Bad Credit Loans is not a lender. They offer a free service that can connect you with a lender that will present their loan offer to you with no obligation of having to accept the offer. In additional to traditional loans, some lenders in their network may offer line of credit.
- Minimum loan amount: $1,000
- Maximum loan amount: $10,000
- Loan terms: 3 to 36 months
Types of Personal Loans
To get a secured loan, you will need to have some collateral, usually a home or a car. Collateral is a way for the lender to make sure that you will pay.
One advantage of a secured loan is that it usually comes with a lower interest rate, and your credit score may not have to be as high.
The main disadvantage is that you may lose your home or car in the event you cannot pay.
An unsecured loan does not require any collateral. The big advantage of a secured loan is that you are not putting a significant asset, like your house or car, at risk. If you default on an unsecured loan, you can damage your credit and run into other problems, but you won’t lose your house.
There are a few cons to unsecured loans. This type of loan typically has a higher interest rate, and you made need a higher credit score even to qualify.
If you choose a fixed-rate loan, you will lock in the interest rate when you receive the loan. You will pay the same amount of interest for the entirety of the loan.
A fixed-rate can be advantageous because it offers predictability. You know precisely what you will be required to pay each month.
However, if you get a fixed-rate loan at a time when interest rates are up, you may find yourself paying more than you’d like.
Variable-rate personal loans give you an interest rate that goes up and down with the market. If you are lucky, you will have low-interest rates throughout the loan so that you pay back less in interest.
You have to be careful with variable rate loans, though, because the market can change quickly. It is a gamble because rates can shoot up, and your monthly payment will go up, too.
If you have several debts you are struggling to pay back, debt consolidation may be the answer. This type of loan combines all of your debt into one loan and usually has a lower interest rate than your other loans. Debt consolidation can also help you because you no longer have several bills to manage. Instead, you have one monthly payment.
There are a few disadvantages to debt consolidation as long as you pay back the money on time. You must also be diligent not to continue going into debt.
For a payday loan, you get a cash advance, which you then pay back in the next couple of weeks, along with pretty steep interest. Payday loans are not recommended in almost all cases. If you do not pay the loan in full by the specified date, you can wind up paying a significant amount of interest.
This is a common process because most people who get payday loans are in a desperate financial situation and are unlikely to have it resolved within a couple of weeks.
If you need money fast, try to exhaust all other options before getting a payday loan.
Tips for Getting a Personal Loan
When getting a personal loan, a higher credit score will equal lower interest and better terms. Try to wait until your credit score is in a reasonable range.
Weigh out your options. Some loans are better for certain situations.
Shop around. Some lenders will give you better rates.
With the right personal loan, you can make wise decisions about what will work best for you and your financial situation.