You are cash strapped, but you need money to consolidate a loan. The interest rates for a credit card are soaring high, and it is not a good alternative. Personal loans are your next option.
Personal loans have different purposes like debt consolidation where you want to free yourself from credit card debt; remodel your home or home improvement loans; start a small business or personal loans for business; financing for eco-friendly projects.
This article tackles about personal loan basics and personal loans with bad credit.
Personal Loan Basics
Typically there is a secured personal loan and an unsecured personal loan. Secured personal loans offer reduced interest rates compared to an unsecured one. Secured personal loans mean you have to put up a collateral like a car or your home. That is if you are willing to risk your asset.
Unsecured personal loans are also known to be signature loans. You simply have to affix your signature and voila you can get your money. But expect the interest rates to be way higher than the secured personal loans.
Where Do You Get a Loan?
You can start from your bank. Reach out to the bank you are regularly dealing with and inquire or find out about their personal loan deals. If you are a valued client, there is big possibility that they will approve your loan. To be sure you have to get the rates of other lenders and compare with your bank.
Verify the interest rates of other lenders and what is the required credit score. The lower your credit score, the higher the interest rate they will peg for your personal loan. Check with Lending Tree and read LendingTree personal loans reviews here to get a better idea of their services.
Personal Loans for People with Bad Credit
When you have a bad credit score, or you are still trying to build a credit standing, what are your options for getting personal loans?
First, try to increase your credit score by paying all your credit cards or quit using your credit cards. Pay your utilities on time. Update your payments always. Bear in mind that a collection account even if it is settled will not remove it from your report. It stays there for at least seven years.
Here are other avenues for getting a personal loan:
1. Credit Unions
It is easier to get personal loans from credit unions because their credit standards are a little lenient than banks. You can join credit unions easily. There are credit unions which are community-based or profession based. They are nonprofit entities so they can offer loans at a lower interest rate.
2. Peer to Peer Loans
You can use these online platforms for borrowing money. These platforms enable borrowers to obtain loans from individuals. All transactions are done online. The downside with peer to peer loans are the high-interest rates, and they have strict qualifications before approving a loan.
3. Cosigned Loan
You can avail personal loans from lenders, but you must have co-signed who is willing be jointly liable to pay the loan with you.
Do your research well before signing above the dotted line. Check our for the best deals visit their website, engage with them and ask your friends.