Thinking About Signing Up For A Personal Loan?

1. Benefits Of Getting Personal Loan If you’re planning to renovate a house, going on a trip, or getting caught off guard by emergency bills and expenses, then what available options do you have? Having back-up cash or savings can save you from all the stress and anxieties these costs may bring you. But what if you’re running out of money? Got emptied your savings already? How can you possibly finance such matters? Perhaps you can consider having a personal loan. Although debt seems to be not so inviting to start afresh, it can help you accomplish your goals. Is getting a fund to be able to pursue your plans is the ultimate goal here, right? A personal loan can be used for almost different kinds of purposes. However, just like credit lines with an unsecured line of credit option, personal loans can be unsecured too. But they can be the best option you can have, especially if you need the money right away. Are you having doubts because you don’t have collateral to offer? A personal loan is an excellent option that works for you. Things You Need To Know About Personal Loan A personal loan is like an installment loan. You borrow money from a lender or bank. Then you repay it through fixed terms and conditions. Usually, terms of payment would take you two to five years. Also, its interest rate is fixed throughout the period of your loan. There are two main types of personal loan. It is a secured or unsecured type. For a secured type of loan, the bank or lender will require your collateral. Can’t you pay on time? Then, they can take over your valued property. Another type is the unsecured one. Just like an unsecured line of credit, your loan is not backed up with any collateral. It seems to be quite an advantage for the borrower. Yet, it poses a risk towards the lender. You can apply through local banks, credit unions, or even non-banking financial institutions.

2. Like any other loans, this option can give you a list of benefits and advantages that you may wish to consider. Why Should You Consider Getting One? The following are the benefits that you might consider in applying for a personal loan. Note that these may vary depending on numerous factors such as your income, assets, loan repayment term, etc. 1. Higher Borrowing Limit Borrowing limits may vary depending on the type of lender. But compared to credit cards, personal loans seem to be more generous. For credit cards, those who are very well qualified applicants can only avail the higher limit. This is not the case always for personal loans. 2. Lower Interest Rate Personal loans’ annual percentage rate can range from 5% to 6% for qualified borrowers. Its interest rate is lower compared to the credit line. In credit cards, they usually bid zero to low rate introductory offers. But after those periods, they spike up to 20%. 3. No Need For Collateral This type of loan does not require you to provide collateral. It sounds great for the borrowers. Thus, this makes the personal loan unsecured. It’s an advantage if you don’t own any property yet but wishes to apply for a loan. 4. Easier To Manage As a borrower, it will be much easier for you to handle a single lump-sum amount with a fixed- rate. It’s better than using more than one credit card account with varying spending limits. 5. Longer Repayment Terms

3. Repayment terms differ from the lender or bank that you applied for your loan. Mostly it would take two to five years. But some unsecured personal loans offer up to seven years or more to pay. 6. Schedule For Payment Is Predictable Since personal loans are installment type, then there is a fixed interest rate to pay. The terms of payment and monthly dues are consistent. Once you get approved, you will now have an idea as to how much you will be paying monthly. Also, you will already know the term you’ll be paying for it and the total cost of your interest rate over the life of your loan. 7. No Need For Excellent Credit In terms of credit, there’s a higher chance to get approved even if you have a poor credit history. Some are willing to let you borrow an amount even if you have a lower than 600 credit score. However, this does not mean that your creditworthiness is not evaluated at all. Lenders will still look into your income, credit score, and outstanding debts. Final Words Before you consider applying for a personal loan, always think of your ability to pay, the purpose of your loan, its fees and rates, etc. Personal loans can be used for a variety of reasons. It can be as flexible as other methods such as a secured or unsecured line of credit. The point is you try to distinguish first what financial product will best suit your current situation as well as your needs. With that in mind, you can save more money and make your life easy by keeping your finances in control.