Personal loans are rife with pitfalls.Used correctly,they can save a significant amount compared to payday loans,overdrafts and pawnshops.Personal loan is a loan where you don’t put up any collateral,such as your house or your car,that the lender can reposses if you default.Because the lender has no guarantee for the loan other than your own reputation,you’ll have a higher interest rate other than you would with a collateralized loan.Since one is not putting up any collateral ,the loan terms will be based on your credit worthiness-your credit history,your income and what other debts you have.One has to be sure to check your credit history and score for any inaccurancies before applying.One can know their credit score by checking it for free by signing up for a credit monitoring service and cancelling during the grace period.
Where to got personal loan
-Banks-Federally chartered credit unions with limits on the rates they are allowed to charge
-Credit unions-They not-for-profit companies.Can help even if one has less-than-perfect credit
-Payday lenders-This is an alternative program that provide loans at the lowest price to people who would otherwise be denied.
-Peer-to-peer lenders-Its easy to qualify for peer-peer lending groups loans although rates might be a bit higher.Examples of such groups may include Lendingclub and Prosper.
-Credit building groups.
All personal loans require income verification such as W2 or paystub and an identification such as passport,identity card or a driver’s licence.
How to apply for a personal loan
Give some basic information about yourself to the lender by filling a form.
Check your rates and review your loan options
Once lenders invest in your loan,money is deposited directly into your bank account.
The monthly loan repayments are fixed and will be automatically deducted from your bank account.There are no hidden fees or repayment penalties and the loan’s interest rate is fixed.
The personal loan can be used for wide variety of ways to enhance your life or business such as:
-Dept consolidation loans-Free yourself from credit card debt
-Home improvement loans
-Personal loans for business use
-Auto and vehicle loans
-Short term and bridge loans with no prepayment penalties
-Green loan-Financing for environmentally friendly projects.
What to do to get loan faster
One can get loan faster by submitting all required information and documents promptly.Additional information can be provided as the application as the application is processed via email.The progress on loan application can be tracked through verification stage system which indicates how far along the information submitted is verified.