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.

This entry was posted on Saturday, December 7th, 2019 at 5:45 am and is filed under Personal Loans. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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