Four Sources For Personal Loans
Life happens, and sometimes you need a bit of extra cash to get on with your personal plans. Here are four sources for personal loans to consider.
Secured and Unsecured Bank Loans
The first option is to approach your bank for a loan. This is a great choice to further a relationship with a financial institution that you already know well. There are two main types of personal loan: secured and unsecured. With a secured loan, you put forth some sort of collateral (such as a home or car that you own) to secure the loan in case you default on payments. These often have a higher acceptance rate and a larger amount of credit may be extended to you. If you don't have any collateral to put forth, you can still consider an unsecured personal loan. These might have a higher interest rate and require better credit for acceptance.
Payday loan companies are meant to be short-term loans to help you cover emergency expenses before your next payday. The process of getting a loan through one of these companies is often very simple, although you might see a higher than average interest rate if you go through these companies. The benefit is that the loan repayment term is short, so you won't experience a lot of compounding interest if you pay back the loan quickly.
Many private lenders also give out personal loans for specific or general purposes. Money lenders cater to those who need small loans quickly. Some online lenders have sprung up as well, and they may require you to state the specific purpose of your loan. For instance, some companies will extend loans to people who are using the money for educational or personal development purposes.
Another option that is becoming more popular is peer to peer lending. These are often online platforms that help investors get matched to individuals who need a personal loan. You may have to create a profile and explain the purpose of the loan, Your credit and personal background may be checked by the site to verify that you are a good candidate for one of these loans. As long as you have good credit, these loans may come with a lower interest rate than other options, and they often come with the benefit of having more personal support. As you can see, there are plenty of options for personal loans, depending on your background and your reasons for applying for the loan.
For more information, talk to a professional like Juniata Valley Bank.