Personal Loans

Personal loans are general purpose loans which enable consumers to access cash in a quick manner. Other names for this form of lending are unsecured loans, secured loans, and signature loans.

Personal loans can be used for nearly any purchase. They are a common form of credit for borrowers who need to pay for car repairs, housing improvements, and unexpected bills. Depending on the existence of collateral, the loans can range from a few hundred dollars to tens of thousands of dollars.

To apply for a personal loan, please fill out the form on this page. If you are approved, a lender will contact you shortly for further details. If you do not qualify, we will do our best to find you alternative forms of financing.

What Types of Personal Loans are Available?

There are two types of personal loans: unsecured and secured. One type links the loan to collateral while the other type does not.

Unsecured

Unsecured personal loans are used by borrowers that either do not have valuable assets to act as collateral or who do not feel comfortable linking their valuable items to a loan. Since there is no collateral with unsecured loans, lenders must use a borrower’s credit history and income as a determining factor for loan approval. Unsecured loans are viewed as high risk loans by lenders since there is nothing to repossess if the borrower defaults on the loan. In order to level out the risk, lenders tend to increase the interest rates for unsecured personal loans, making the monthly payments higher.

Although personal loans are commonly used by borrowers, those with poor credit scores will likely be denied an unsecured personal loan because the risk for the lender is simply too great. If this occurs, a borrower should turn to a secured loan instead.

Secured

Secured personal loans are short-term forms of credit which are linked to a form of collateral. In order to access these small loans, borrowers offer a valuable item, such as a vehicle, real estate, or a paycheck, in order to leverage the loan. The various types of collateral create the following secured loan options:

●     Payday loans

●     Car title loans

●     Home equity lines of credit

●     Other

Payday Loans

Payday loans are cash-advances which enable a borrower to access cash from their upcoming paycheck. These loans are specifically for short-term purposes and are not advised for borrowers who need money that they cannot repay within two weeks time.

No credit check is required and lenders only require a postdated check as collateral. Although payday loans are accessible by a large group of consumers, they do carry high interest rates and should be not be borrowed without careful consideration.

Car Title Loans

Car title loans, another form of secured personal loan, use a borrower’s vehicle as collateral. They are commonly used because they are short-term and do not require credit checks. Since a borrower’s vehicle is attached to the loan, if the loan is defaulted on, their lender can legally repossess the vehicle to repay the debt.

Car title loans carry an added risk, but for many in need of cash with a suitable vehicle, they are the most attractive option.

Home Equity Lines of Credit

Before the Great Recession and the housing crash, borrowers across the country accessed money by using the equity in their homes as collateral. These home equity lines of credit, also called HELOCs, are a great way to extract the equity from one’s property without refinancing their home.

This is a riskier form of credit and many homeowners found out the repercussions of using their home as collateral when the housing market collapsed. But if one has stable equity, a HELOC is an excellent form of low-cost cash.

Other

Borrowers without a car or home are not without personal loan options. Many lenders, especially alternative online lenders, are open to accepting any valuable item as collateral. This can include items such as artwork and expensive wine. The entire purpose of collateral is to give a lender something to sell to pay for the loan in case the borrower defaults. As long as the item is valuable, such as vintage wine, then the lender can accommodate for the personal loan cost.

What Do Personal Loans Cost?

The cost of a personal loan depends heavily on the individual borrower. The monthly repayment cost will be the result of the interest rate offered by the lender. Interest rates are calculated by factoring in the amount requested, the risk associated with the loan (i.e. the amount of collateral, or lack thereof), and the borrower’s credit history.

The best interest rates are given to borrowers with a valuable collateral item and a high credit score. Borrowers with credit scores above 640 have the greatest chance of acquiring a low interest rate on a personal loan.

Unlike other loans such as mortgages and payday loans, personal loans do not have a general cost guideline or standard interest rate charges. The repayment cost depends solely on the lender and the borrower’s eligibility and perceived risk.

In order to find a cheap personal loan that a borrower can afford to repay, consumers should research different lenders and options. Additionally, borrowers can calculate both the monthly cost and overall cost by using a personal loan calculator.

Do I Qualify for a Personal Loan?

Since personal loans are a general loan, they can be used for practically anything. The approval process for the loans depends mainly on a borrower’s credit score and the lack of bad credit.

When applying online, a borrower will find out if they qualify quickly. Lenders have specific requirements when approving various types of loans, and personal loans are no different. After the application form is filled out, the borrower will be notified whether or not they are eligible for the loan and the amount requested.

In order to qualify for a personal loan, a borrower should meet the following requirements:

●     Be 18-years-old or older

●     Have a reliable source of income

●     Have a bank account

First and foremost, all applicants must over the age of 18 to enter into a financially binding contract.

Secondly, a reliable source of income is valued by lenders because it shows that a borrower can repay their debts. Income from a steady job, government benefits, social security, or an unemployment check are all valid sources of income.

The final item needed for most personal loans is a valid bank account. This enables the lender to deposit the funds into the account quickly, and in the case of a payday loan, for their repayment to be withdrawn on time. In addition, for the secured payday option, a post-dated check or banking account information is also required.

How do I Apply?

If a borrower has the qualifying factors required for a personal loan, they should apply with their lender of choice. Online borrowers should fill out the required information on the application at the top of this page, and be ready to provide their full name, zip code, requested loan amount, and other information.

Subsequent application forms will request more information such as the loan purpose, the borrower’s credit score, age, and other personal information.

Online forms are easy to decipher and complete. Once the form is filled out, the applicant should receive a notification if they qualify. If not, other lending options may be offered instead.

What’s the Availability of Personal Loans

The availability of personal loans via storefront lenders depends on the state in which the consumer lives. The United States is divided on the topic of short-term lending, so each state has its own governing laws.

Although there are laws governing all types of consumer loans, the laws for secured personal loans are the most contested. Auto title loans and payday loans are restricted in many states across the country.

New legislation might limit the availability of personal loans, but the need for them will not be eliminated. In order to understand how the availability of small consumer credit impacts borrowers, research has been completed to analyze the demographics of potential borrowers. This enables the industry to understand why the funding is needed and what it is used for.

What are the Risks and Benefits?

All loans carry some form of risk either because of high interest rates, overall cost, or the potential loss of collateral. Borrowers can avoid these risks and enjoy only the benefits by educating themselves before applying.

Risk

Personal loans are not viewed as negatively as other forms of short-term credit, such as auto title loans and payday loans. Despite this, personal loans still carry some risk. Those who choose to secure a loan with collateral should ensure that the loan can be repaid. If borrowers faces financial difficulty and cannot repay their debt, they risk harming their credit score in addition to losing their collateral.

Although secured loans allow borrowers to access lower interest rates and more favorable loan terms, they are linked to a form of collateral. If borrowers link a loan to a vehicle, and then cannot repay the loan, they risk having the collateralized vehicle repossessed by the lender to repay their debts. For safety reasons, borrowers should only offer up collateral if they can guarantee funds to repay the loan.

In order to combat these risks, many states have banned or limited short-term lending. Some of the laws limit interest rates, reduce rollover availability, and increase zoning protection. If you live in a state which bans payday loans, your application and request for funds will be denied.

Benefits

Although personal loans have risks, they also have several benefits.

Personal loans are great for:

●     Filling a financial void in the most desperate of times

●     Paying unexpected expenses, such as car repairs or medical costs

●     Consolidating other, more expensive loans

●     Purchasing a large appliances

●     Bridging the time between paychecks

Small loans can also bolster an borrower’s credit score. Although it is a risky method, if the loan is repaid on time, the positive lending experience will make future loans easier to attain.

Without these loans, consumers would be left with few alternatives to personal financing.

Choosing a Personal Loan Lender

There are two primary sources for personal loans: online lenders and banks or credit unions.

Online Lenders

Using the internet is the simplest way for prospective borrowers to apply for a loan.

When applying online, borrower should investigate the lender fully in order to protect their private financial information. Some things to check for in an online lender are:

●     A secure website certificate

●     A Better Business Bureau profile

●     Terms of agreement

●     Privacy policy

●     Proper disclosures and disclaimers

●     A verified and live telephone number

●     A physical address

Borrowing online allows the consumer to obtain multiple quotes from various lenders and quickly compare lending options. This ensures that the borrower get the best interest rate and terms on the personal loan.

Banks or Credit Unions

Personal loans were first offered by banks and credit unions, and, although other options have appeared throughout the years, both of these traditional financing institutions remain as a stable source for this form of consumer borrowing.

Even though banks approve personal loan applications daily, the standard lending process can take more time than online versions. The reason for this is because of validation. Storefront lenders and banks usually require applicants to provide proof for their submitted information, such as their employment status and bank account information. This proof must then be reviewed and processed with the application.

Online applications expedite this process by requiring a single form and providing the borrower with a notification of whether they are approved or denied much quicker.

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