How To Avail A Personal Loan

Published: 2019-10-04 Views: 877
Author: wecompareweb
Published in: Business

Introduction

A personal loan is an unsecured loan that helps in meeting the financial requirements of you or your family members. Most of the Americans prefer loan as they can’t afford to buy a home or pay school fees of their children. Personal loans can be taken from a bank or a non-banking financial institutions. Personal loans don’t require any security or collateral to be paid up front. In most of the cases, lender do a background check to know the creditworthiness of the borrower before providing him with a loan. Personal loans can be used for various purposes like for traveling, for emergency purposes or for buying personal goods. The interest rates are comparatively higher compared to other loans such as home or education loans because of the risk involved in it. Personal loans come with fixed interest rates and a term that ranges from 1-5 years. Personal loans are given based on the borrower’s credit score. Borrowers with a high credit score is generally approved of giving personal loans. The personal loan availed has to be paid on time like any other loan as it would reflect on your credit score and can cause you trouble if you apply for loans in the future. But borrowing money can be a risky proposition and an emotional one. Only that amount should be borrowed which you can pay later.

Places you can get a loan from?

Government Banks: Banks like Federal Bank, U.S Bank, and Well Fargo are one of the best and biggest banks that offer personal loans at an affordable price. They offer you a lot of options in terms of fees, incentives and have great customer service to give your assistance.
Online or fast money lenders: Online money lenders typically provide you loan within 24 hours. You just need to fill in particular details and once the approval is granted, the amount reaches you within a day.
Credit Unions: As the name suggests it is centered around the community to which they belong. Compared to banks, they offer lower best mortgage interest rates in us and they provide a touch of comfort and ease to their community members.
Peer to peer loans: Peer to peer loans are loans that are granted by certain individuals rather than the banks. And you need to pay the amount to them along with the interest. For example, organizations like Lending Club are doing a great job in providing loans to the borrowers. The rate of interest is attractive and the term ranges from three to five years.

Which bank or Financial Institution to choose from?

Compare the interest rates from various banks and financial institutions. Some important factors that you need to look out for before you go for personal loan is the interest rates, loan tenure, processing fees, etc.

What can we use personal loans for?

As the name suggests, personal loans can be used for a variety of purposes and there isn’t any collateral to be paid upfront. The various uses of personal loan are

School fees:
Medical Expenses:
Vacation
Shopping
Books
Purchase of house
Purchase of car

Why Personal Loan?

Personal Loan Comparison is personal: it can be used for any purpose as you want it. And the best part is that there is no collateral to be paid upfront. Personal Loans can be used to buy a car or renovate your house or go for a vacation. The choice is entirely yours. Other benefits of taking a personal loan is that it takes less time than other loans. You can get a loan through a money lender or a credit union and there is no need for a bank to give a personal loan. Loan can be taken from an amount as small as $1,000 to the amount as big as 1,00,000. The interest rate is lower than credit cards.

Eligibility Criteria to Avail a loan

The conditions differ from each bank but some of the common ones are:

Age
Regular source of income. The income can be from Business, Job or self- employed. If you are in the high-income category you will be eligible for higher loan compared to a low-income category.
Occupation: If you have a stable job then you are eligible for a higher loan compared to working in a part-time job.
Capacity to pay the loan
Credit history: If you have paid the past loans well in time you have a good Credit Card Deals score which will help you in getting a higher loan amount.

Loan Duration

The period of loan can be anywhere between 1 to 5 years depending on case to case basis. And the rate of interest also varies depending on the duration of the loan. And the loan amount is disbursed within a week to the borrower applying for a loan. The amount is received in the form of a check, draft or the amount is deposited in the borrower’s account electronically.

Advantages of Personal Loan

Personal Loans comes with a fixed interest rate. That means that you will be paying the same amount of money to the lender every month. It gives you the comfort to manage your finances more proficiently.
Fixed tenures: Personal loans come up with a fixed duration of 1-5 years.
Easy availability: Personal loans are easily available. And it offers the choice to pick the amount you want to avail.
Round the clock assistance: Personal loan offer round the clock assistance wither through phone call, email or chat service. So, every time you have even the slightest of doubt, you can easily avail the customer service. And the customer service comes free of cost to you.

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