Through personal loans, millions of Americans have been able to consolidate other debts, improve their homes, and pay unexpected expenses. According to reports from TansUnion, the number of people with personal loans has increased from 23 million up to over 27 million in the recent past years. In fact, 2016 reported the highest growth in personal loans.
So why are personal loans gaining rapid popularity among so many people? First, personal loans are offered at a low-interest rate to individuals with a good credit score, and also they are generally smaller loans than other typical loans. However, before deciding to take a personal loan, consider these points.
1. How do personal loans operate?
They are the type of a fixed loan that you borrow and repay with interest in monthly installments. And once you clear the loan, your account is closed. If you wish to re-apply for another loan, you apply again for the loan.
2. What are different types of personal loans
Basically, there are only two types of personal loans:
Secured loans – this type of loans is backed up with collateral such as bank shares or saving accounts. If you fail to clear the loan, your lender has the right to claim your assets as the repayment for the loan.
Unsecured loans – this is an unsecured loan. The lender assesses your credibility by evaluating your past financial statements. If you fail to qualify for an unsecured loan, or you want a lower interest loan, some lenders also offer the alternative of secured options.
3. Where can you access personal loans
Typically, when you think of a loan, the bank is the first option that triggers in our mind. However, they are not the only lender that offers personal loans.
Online lenders, micro-finance Sacco, consumer finance, and peer to peer lenders are some of the many institutions that offer personalized loans. For more details read on personal loans for bad credit.
Do you have bad credit and need a bank loan? Have you asked several banks, but have been turned down?
If so, here are five reasons when you should get a bad credit loan. After all, they can be quite easy to get online if you find a website offering them.
A bank will not lend you the money -- If you have bad credit, it is highly unlikely a reputable bank will give you a loan. Apply for a bad credit loan on the Internet, however, and you could be surprised at how quickly you get it.
You need it quickly -- While you may still be able to get a loan from a bank, they often take weeks to make a decision and then to give you the loan. That is why you should apply for an online bad credit loan instead. Especially as you can usually get one within just a couple of days.
For emergency situations -- If you need to pay rent, your car loan or any other payment that will cause you to have major problems if you do not, applying for a bad credit loan online is a great way to get the money.
Situations where a bank will never lend you money -- If you have bad credit, but want to open a business, take a vacation or buy a computer, a bank will never lend you the money for that. You can, however, get a bad credit loan online with few questions asked.
The application process is simple -- Unlike banks, which often require huge amounts of information, applying for a personal loans for bad credit online usually requires minimal paperwork.
In fact, in most cases you will experience the paperwork taking less than 10 minutes to complete and then you have officially applied for your loan.