By financen | December 7, 2019 - 5:45 am - Posted in Personal Loans

Once you reach adulthood, you start to realize there are loans for just about everything. Whether through commercials, walking down the street, or even talking to others, you’ve seen that there are loans for everything you can imagine.

Personal loans seem to encompass just about everything. Are personal loans for everything out there? Are they that easy to get?

Well, the easy answer is “it depends.” There is no specific answer when it comes to personal loans.

Whether it be credit card consolidation, needing cash immediately, or just about any project you can think of. Below are the basics and a little crash course with personal loans.

What are personal loans?

Personal loans are precisely what they sound like: they are loans for personal reasons. Many times, you don’t even need to provide an exact reason as to why you’re requesting a loan. It could be because you’re remodeling the bathroom or need to fix your car.

Generally speaking, there are two kinds of personal loans: unsecured and secured. Unsecured loans aren’t going to require any collateral and are typically seen as being a bit riskier. Secured loans are just the opposite as they do need some collateral.

What about the terms?

While the exact terms will vary from institution to institution, the following rules stay the same:

  • A fixed interest rate
  • Fixed monthly payment
  • A fixed amount of money borrowed upfront

The interest rates on personal loans are much lower than your credit card, which averages around 17%. Personal loans average about 4%. Much easier on your wallet and financial life.

Why would I need one?

As mentioned above, you don’t need a specific reason to take one out. Many people use them for home remodeling or other big projects, but there is no blanket reason. Well, the blanket reason is that you need cash for X thing. Another popular area where personal loans are needed is credit card consolidation or debt consolidation.

If you’re someone who is drowning in credit card debt and being hit with those high-interest rates, it’s much easier to consolidate your debts with a personal loan and lower interest rates. Also, you’re doing to benefit from having a fixed monthly payment so you can easily plan your future budget from here on out.

It’s a path many people take to get their debt under control and have a better overall feel for their finances.

Where do I go?

Now that you know a little bit about personal loans, you have to decide where you’re going to go looking for them.

While you could head to a bank for a personal loan, these often take a lot of time, paperwork, and bureaucracy. Banks may give you a reasonable rate, but you might have to wait for months to do so.

One of the most famous avenues for many people is to head to online vendors. Online vendors typically have fewer requirements than your average bank and can get back to you on a quicker basis. You’ll want to make sure you’re shopping around for those with the best interest rates, which will vary depending on your financial history and credit score.

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By financen | January 9, 2018 - 5:18 pm - Posted in Loan, Personal Loans

Different people need money for different reasons. Some are trying to buy a car or have their current one fixed, others may be starting a small business or sending yet another child of theirs to university, and still some are going travelling with their partner or family – whatever the reason, it is important to know what you are getting into when you take out a personal loan and that you are choosing the best personal loan for you. There are a number of points to keep an eye out for when choosing your loan because everybody’s needs are different. As with any decision, there is no one size fits all, so let’s delve into the tools for finding the best loan for you!

Read the Fine Print

Loans can be sneaky. Taking out a loan is the perfect time to be taken advantage of by the fine print. The way to remedy this? Read the fine print! Learn about any hidden fees that may be attached to your loan. There is no set standard on fees, so every business and company will have their own fees and rules. Read the fine print and are still skeptical? Ask about origination fees, prepayment penalties, whether or not a loan is on fixed term, and interest rates and types.

Compare Companies

Every company is different. Comparing companies is a surefire way to ensure that you are receiving the best deal for your personal loan. Research online a multitude of companies, comparing their interest rates, fees, and the lengths of payback periods. This will help you narrow down your scope and help to solidify whether or not you wish to go with a bank for a personal loan, or a personal loan company.

Ask Questions

Once you have your narrowed scope, set up meetings with advisors of each bank or lending company to ask any further questions that you may have. One of the major perks of personal loans is the speed with which the money reaches your hands. Companies such as LoanCall specialize in personal loans, allowing a quicker receiving time for you, and, generally, less expensive fees and lower interest rates. Asking questions surrounding your personal loan will ensure that you are receiving the loan with the amount of money that you need and with manageable interest rate payments for you.

Personal loans are an excellent way to get the money that you need and quickly! However, it is important to never take on a loan that goes beyond your needs and means. Your personal loan is your ticket to a new business, a family vacation, or covered unexpected costs.

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By financen | April 24, 2017 - 5:42 pm - Posted in Credit Score, Loan, Personal Loans

Personal loans can be a great arrow in your financial quiver for consolidating higher interest rate debts, like credit cards or short-term loans, or financing a major purchase or unexpected bill. With predictability built in, personal loans make it easy to budget for repayment for the life of the loan, and for the most qualified borrowers, repayment can extend up to several years. However, not everyone is eligible for a personal loan through banks or online lenders. Because personal loans do not require collateral – an asset, like a vehicle, a home, or a bank account the lender can use to recoup losses due to default – the application process can be stringent. Here are the most common factors banks review when evaluating a personal loan application.

Credit Score

credit-score

The first place lenders look when receiving a new personal loan application is the borrower’s credit history and score. Credit information is like a financial fingerprint in that it provides a clear picture of who a borrower is in terms of money management and timely debt payment over an entire lifetime. When credit history is clean, and a credit score is above 700, banks are more apt to offer a personal loan with the lowest possible interest rate and budget-friendly repayment term. If credit score and history are on shaky ground due to past late payment, a recent bankruptcy, or a foreclosure, lenders either decline a loan application or charge far higher interest rates to protect their potential for loss.

Employment History

employment

Some banks ask for employment history on a personal loan application, in an effort to understand a borrower’s track record of earnings. When someone has had significant gaps in jobs over the last few years or has had several different employers in a short period of time, lenders may view the borrower as higher risk. Steady employment and increased income over time is what banks are typically looking for to qualify a borrower for a personal loan.

Current Income

Income

Above and beyond a borrower’s past financial record, banks want to understand current income. Borrowers with steady earnings from a conventional job are perceived as a lower risk to most lenders, while those who are paid by commission or a bonus structure are less reliable in theory. Banks also want to understand the reliability of the income stream a borrower has, and how that stacks up against other outstanding debts that require a monthly payment. Even when income is steady, borrowers who have several other monthly payments due may not be a strong fit for a personal loan through a bank.

Amount and Purpose of the Loan

The last common factor in reviewing a personal loan application is two-fold: the intent of the borrow and the amount funded. First, personal loans may have some restrictions on what items or expenses they can be used to pay, typically excluding paying off another loan or financing education-related costs. The most common uses for personal loans that are deemed suitable by a bank include debt consolidation, a large expense like a family vacation or holiday spending, or business financing. Second, banks always review the amount of the loan requested and compare that to the borrower’s income and other monthly obligations. For most personal loan applications, no more than $35,000 can be borrowed at one time.

Using a personal loan to manage your finances can be a smart way to leverage your borrowing ability, but take note that banks are going to review your loan application carefully. Before applying for a personal loan, make sure to have documentation relating to your income, a list of previous employers, and a clean credit history to improve your chances for approval.

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Sometimes we get into financial mess that may not be created by us. If you are one of them and are feeling trapped, there is an easy way to get out of this mess. Sometimes you get frightened thinking that the lenders will turn down your proposal because you are a bigger risk to their finance. Now you don’t have to go through such difficult financial situations. Recession has left its toll on many of us. People who never thought that their credit will get bad are now facing this tough situation. You can easily apply for a loan with different loan companies. You just have to do a search on the internet, shop with different companies and figure out the best deal in your favor.

What makes a loan high risk? This is that type of loan which is applied by a borrower who has bad credit and is in tremendous need of cash. Just do a search on the internet as per your requirements and you will find different lenders. Although they may not specialize in this type of loan, but they can approve your loan requirement. These lenders have a fair idea about such requirements of the borrowers. It does not matter whether you own a car or a home, to put as collateral, you still have the chances to get approved. All you need is a steady income and an active checking account, and many lenders will be willing to do business with you.

Based on the collateral that you have to put against the loan, you can apply for a bigger amount. An unsecured loan that is offered without collateral can range between $1,000 to $25,000 and you can pay it back between 1 to 25 year time frame.

creditWhen you are applying for an unsecured loan, it is obvious that the interest rate will be a lot higher considering the risks involved with it. Hence, it is better to pay back a small loan quickly than letting the interest charges kill you slowly over a long period of time. Hence, you should borrow a small amount, so that you don’t end up paying a lot in interests and fees. And once this loan is getting paid off, it will improve your credit history. Once your credit score is back up, then you can get better deals from the lenders.

Application process is very easy. You just have to get online, fill the application form and your loan will be processed. Make sure that you have fully read the terms and conditions in the contract copy to avoid any confusions at the later stage.

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