There may come a time in your life when you run into a financial situation that will require you to borrow money to pay bills, unplanned medical expenses, car repairs and any other kind of need that does not involved a large conventional type purchase. During those times of need you may consider what is call a personal loan. A personal loan can be obtained from banks or another financial institution that work on a personal level with the borrower. These loans do not include purchases such as for a home or for a car, they are smaller and generally under $10,000. A personal loan can be secured or unsecured. What you might qualify for will be dependent on your credit history and also on the policies and practices that the institution follows. It is too your advantage to find out what the credit terms are before applying for a loan. You will want to know up front the repayment rules, the annual interest and any other pertain information that may impact your ability to repay the loan.
Secured Loans
These loans are secured by some kind of object that is owned by the person applying for the loan.
- Loans are usually secured with a car, some thing of value that resides in the home.
- Loans are paid back in a short amount of time.
- Loans given out by the institution are usually higher than any other loan type.
- Secured personal loans carry with them the lowest interest and best repayment terms
- Payments are often lower.
Unsecured Loans
- These type of loans are not secured by any kind of collateral.
- The lender takes on all the risk.
- Your loan terms and amount given is determined solely on your credit worthiness.
- Loan amounts are less and interest rates are much higher.
- You can anticipate paying interest rates anywhere from 9% to 30%. Interest rates are dependent on your credit, the institutions policies, state and federal laws.
Cash Advances
Cash advances should be your last resort when trying to secure money for your immediate needs. Often times the interest paid back to the lender can be anywhere from 60% to 100%. This loan types are less regulated and can be granted immediately.
What You Need To Know About Cash Advances
- You do not have to have good credit to be granted a cash advance.
- Most cash advances are back by your paycheck. Be prepared to pay back the entire cash advance on your next payday.
- Cash advances are either paid immediately through a check or direct deposit. At times there may be a few days wait to verify you credentials.
- These type of loans are not suitable for long term needs because the interest rates are extremely high.
These are the kind of personal loans you may run into when speaking to a loan representative. If you have exhausted all other avenues of borrowing from a 401K, family members or friends, then best loan for any need is always a secured loan. They require the least amount of effort on the person repaying the loan. If you are unable to qualify for a secured loan, then it is best to try the others.