According to the stats, millions of US citizens take personal loans to consolidate debts, pay off common expenses, and remodel their homes.
Plus, each year, the US financial market witnesses around 27 million personal loans. In particular, the fastest loan growing product in the USA is personal loans.
So, why the boom? Why are they appealing to millions of people? Why do most people prefer personal loans to other types of loan facilities? The answer is simple: personal loans attract low-interest rates—especially to those with excellent credit scores. Plus, you can secure a personal loan from https://www.citrusloans.co.uk/bad-credit-loans in a smaller amount. So, if you are in a financial crisis and you are considering taking a personal loan, here are a few insights to help you get started.
How They Work
Typically, a personal loan is like an installment loan. What this means is that when a person borrows a personal loan, he/she will be paying a monthly installment until the loan is over.
Normally, the repayment terms stipulate a fixed timeframe. Thus, you will be expected to settle your loan within this timeframe. In most cases, the repayment period ranges between 12 and 84 months—but it depends on your lender. Once your loan is fully settled, the lender will close your account. However, if you require more money, you will be required to reapply.
Also, you must have a clear reason why you need money for. Plus, consider choosing the type of personal loan that suits your explicit needs. Your financial situation should also influence the type of loan to choose from.
The Amount You Can Borrow
Most lenders will approve loans ranging from $15000 to $5000. Your creditworthiness will be used to determine the amount you qualify for.
You can either go for secured or unsecured loans. You need collateral to get a secured loan. Secured loans attract lower interest rates than their unsecured counterparts. On the other hand, unsecured loans don’t require borrowers to deposit collateral.
Where to Get a Personal Loan
You can secure your personal loans from banks, credit unions, and other online lending facilities. However, ensure that the lender you choose offers the best terms.
Also, do your research before choosing a lender. And in you are unsure about a particular lender, leverage on the power of Consumer Protection Bureau. Alternatively, you can use the Better Business Bureau.
Personal Loans and Other Credit Options
Of course, a personal loan can offer you cash to sort out urgent financial needs. However, you can use other loan options out there. For instance, if your credit score is excellent, you might be given balance transfer based credit cards featuring zero percent introductory APR. Plus, if your financial situation allows you to pay off the credit before the interest rates increases, then a credit card might be the best option for you.
The Bottom Line
Are you looking to secure a personal loan? Well, you need to get it right. The above information will help you secure the best personal loan for all your financial needs.