Personal Loans

A personal loan, as the name suggests, can be for any personal reason. Examples could be a son or daughter going to college, a new car, or any other sizeable purchase you may need to make. Personal loans can, instantly, provide you with the required means, without anyone’s help.

Once you decide that you want to take out a personal loan, you need to look into which bank or company to go to. Government, private banks and loan companies can all be a resource to you. First step is to find out where the interest rate is most favorable, although this is not the only parameter that is of importance. Amount of paper work involved and service provided, may play a role in your decision also.

Generally speaking, there are three types of personal loans:

1. Secured personal loans. For this type of personal loan, banks will keep some kind of security, like your house or your car, depending of the amount of the loan. This kind of security is called collateral. If you are unable to repay your loan, the collateral can be confiscated by the bank giving the loan. So, if you are not absolutely sure you can repay the loan in the appropriate timeframe, realize that you are putting your house or car on the line, But having collateral has it good sides also. Interest rates are usually lower, since the loan in secure.
2. Unsecured personal loans. As the name suggests, no collateral is required for this type of loan. They can be obtained quickly, but because of the risk the lender is taking, the interest rates are normally higher, and the amount of money you can loan is generally lower.
3. Line of credit refers to setting up a limit to the amount that will be available to you, without paying out the full amount at the time of close. You have the flexibility to take out as much as you need, obviously with a limit. Credit cards, in essence, are an example of a line of credit. Interest rates will only apply to the amount you withdraw from the credit limit.

As the above indicates, interest rates vary with the type of personal loan chosen. If time is of the essence and interest rates are not your main concern unsecured personal loans seem to be your best bet. Lines of credit can be useful, e.g. when you are doing a construction project and you do not yet know the exact costs involved.

Regardless of the loan you choose, make sure you know the interest rate and the length of the loan. Calculate the monthly installments, and assess whether this is realistic for your situation. The lender should give you upfront the number of skipped monthly payments and/or bounced checks they can accept. Make sure that you do not exceed this number for there can be very serious legal repercussions. If you can adhere to the agreed payment schedule, a personal loan can be a blessing in a time of need.



Karin Boode is the founder of the Loan Info Center, and the author of many loan related articles. The Loan Info Center strives to provide valuable information regarding any type of loan. She has a blog specifically for personal loan related questions and one that focusses on secured loans.

A Personal loan or your credit card; what is the best choice?

Should you take out a personal loan or are you better of charging your credit card? If you have a short-term cash crunch and you have a credit card that offers a low fixed or introductory rate, you may be better off charging your needs instead of taking out a guaranteed online personal loan. Because personal loans are unsecured, the rates tend to be higher than other types of loans even at traditional lenders, much less at payday lenders. Want some guaranteed loans advice? If your credit card rate has a lower rate than what you can get on a personal loan, use the credit card. HOWEVER, you must pay the card off before the introductory rate expires. If there is no introductory rate, you must pay the card off within two years. That means paying much more than you would if you were paying the minimum rate alone. Figure out what your monthly payment would have been for the personal loan, and pay that amount or more each month to pay off the debt.
If this is helpful, you may be able to find more helpful articles in the Loan Info Center.

Personal Loans.

How to identify a legitimate personal loan

Personal loan question:

I did receive a question today from someone, who was wondering how to seperate a legitimate personal loan from a scam. Here are some tips that can help:

• Don't believe the promises that are too good to be true, like "you'll get a personal loan, guaranteed, even if you have no credit or bad credit".
  
  
• It is against the law for telemarketers to ask for payment in advance, while claiming to guarantee a personal loan, or implying that there is a strong chance of one.
  
  
• While there is no similar law for loan offers on the Internet, no legitimate lenders, online or offline, will guarantee a loan before you have even submitted your application;
  
  
• Morgage lenders may ask for payment for a credit report or appraisal, but legitimate lenders won't ask you to pay anything upfront for personal loans.
  

The above tips should help you, but if you are (still) in doubt about your personal loan, get advice free or at a very low fee from your local Consumer Credit Counseling Service .

Personal loans.

Variable Rate Personal Loan.

What is a variable rate Personal Loan?

With a variable rate, the interest is tied to prime rate and can increase and decrease when prime fluctuates. The Variable rate is equal to prime rate + a spread. A one-year term is available with an amortization period of up to 25 years, depending on the amount, purpose, and the applicant's ability to pay. During the term, blended payments of principal and interest remain the same. * Please note, a Variable rate loan may be converted to a fixed rate anytime, without any charge. To provide freedom from the worry of unpredictable events, you may also consider an optional Personal Loan Insurance Plan which includes, Life Insurance, Disability Insurance and Payment Protector Insurance due to involuntary loss of employment.



Personal Loan Center.

Fixed Rate Personal Loan

What is a fixed rate personal loan?

With a fixed rate personal loan, the interest rate and term of the personal loan are fixed at the time of application. The minimum term usually is 1 year, whereas the maximum term is five years, in most cases. The maximum amortization period is 20 years (240 months), depending on the amount, purpose and applicant's ability to pay. However, the amortization period and term must be equal for personal loans amortized for 60 months of less. To create freedom from the worry of unpredictable events, one should also consider an optional Personal Loan Insurance Plan which includes, Life Insurance, Disability Insurance and/or Payment Protector Insurance due to involuntary loss of employment.



Personal Loan Center.

Personal Loan

Welcome to my personal loan blog. Here you will find usefull information regarding personal loans and answers to common personal loan questions.

Personal Loan Center.