So you want money and lots of it, huh? Well, that’s cool- Don’t we all. The truth is, that’s just what personal loans are for –they are designed for whatever reason, literally, hence the name personal loans. Whether you want to renovate the basement, update your wardrobe, invest in a business, start a business, or take a well-deserved vacation, personal loans serve many needs out there. This is one of the benefits of personal loans. However, that being said –you must make a great case for why you need the loan, prove that you are worthy of the loan, and how you plan to pay it back. With that comes planning and evaluation; for this aspect of the personal loan, a loan consultant or a financial expert will be able to help guide you in the right direction.
Before You Apply
Be advised that there is quite an extensive list of documents needed to secure a personal loan. Have a look at the following list of standard requirements for a personal loan: tax returns, house or car title(s), references, employment verification, checking and/or savings account information, and social security card. These are just the basic requirements, some personal loan lender require more –be sure to ask about this prior to selecting an agency.
There is no shortage of lenders out there; on the contrary, they are ubiquitous and not all are created equally. As the borrower, it is your job to find the best personal loan that suits your needs. Other issues to consider are payment plans, interest rates, and personal lifestyle. Keep in mind that the monthly payments must be regular and must manageable; consider your bill cycle and spending prior to selecting any personal loan.
Personal Loan Benefits
Personal loans can come from a bank or an online lender, even a family or friend. Personal loans do not always require a mountain of paperwork typically involved with other types of loans. If the personal loan does come from the bank inquire about discounts on rates or benefits of paying back the loan prior to the deadline.
Interest rates are low, much lower than other loans and lower than credit cards. For this reason personal loans are a great choice for many people.
There are varying amounts of personal loans, it all depends on what you need the money for. Again, consider your lifestyle before taking out a hefty personal loan.
Personal loans have fixed monthly payments, fixed interest rates, and fixed length of repayment; all of these are for the benefit of the borrower.
In comparison to conventional loans, personal loan response time is much quicker. So for the impatient personal loan borrower, this can take the pain out of waiting.
Types of Personal Loans
There are a plethora of loans available on the market today, but the most popular personal loans include the following (be advised that the responsibility of each and every loan lies in the hands of the borrower and not the lender):
- Home Equity Personal Loan: This offers a finite amount which is then secured by the equity in your home.
- Home Equity Line of Credit (HELOC): This revolving loan amount is used on a taken as need basis and, like the Home Equity Personal Loan, is secured by the equity of your home
- Short-Term Personal Loan: This is used by borrowers when funds are needed urgently and sometimes without warning.
- Fast Cash-Advance (or Payday) Loan: This is taken out when funds are needed immediately, but these types of loans are not recommended by the government.
- Military Payday Loan: This loan is specific to men and women in the military and is known to have high risks.
- No Credit/Bad Credit Personal Loan: This loan is strictly for consumers with a bad or limited credit history and, as with Payday or Military Payday Loans, comes with a number of risks.
- Second-Chance Personal Loan: This loan provides funds in a financial crisis or personal tragedy.