Nowadays there is a large choice of different loan types, which makes it difficult sometimes to differentiate among them. However, despite so many various names, there are only two main types of loans existing and they are the following: the short-term loans and the long-term loans. As for the personal loans, which will be considered in this article, they belong to the long-term loans that can provide borrowers with the larger number of benefits. This is due to the fact that personal loans are adjustable to your individual requirements.
Compared to the payday loans, which are the short-term loans, personal loans are used for the long-term projects and make it possible to enjoy larger amount of money borrowed. Use personal loans for any intention you have: either buying an expensive present, paying for the journey of your dream or any other projects you have as long repayment terms in a combination with the interest rates lower than any other loan options have, make it possible to consider personal loans as the best possible deal.
Apply for Personal Loans if Have Large-Scale Plans
As it was already mentioned above, a personal loan is a long-term loan, which is used to finance some serious individual projects. There are more benefits compared to short-term loans as here you may enjoy customization of options taking into account your personal needs. The personal loan amount is from $1000 and it may be up to $50000 and even more. As for the repayment terms, you are going to repay your personal line of a credit during the certain period of time, which may vary from months to years depending on the amount of money you would like to borrow and your agreement with the personal loan lender.
Personal loans have appeared with the aim to give a helping hand to those who have large-scale projects but are not able to earn money quickly to realize their plans. Why to wait for years if there is a great chance to make all your dreams come true here and now and repay fixed amount of money for some period of time. It is much more convenient than saving during years. One more way of using a personal loan, which is also quite popular nowadays is getting a personal loan with the purpose to cover the debt and solve some credit situations. This is a good idea as the interest rates for personal loans are lower compared to credit cards and short-term loans.
Are you going to repair your house or buy an expensive car of your dream? Why not? Apply for personal loans and see that there is nothing impossible! However, keep in mind that before you take a decision concerning personal loans, you are recommended to learn everything about the process of their work. Only well-informed decisions are going to contribute to successful solutions.
Meet Personal Loan Requirements and Enjoy Money for Any Purpose
To be eligible for a personal loan, you must meet the following requirements:
- To be not younger than 18,
- To be a citizen or a resident of the country where you apply for a loan,
- To be employed or have other proved income source,
- To have valid banking account,
- To fill in an application form with identification, financial, employment and contact details.
What will You Get Applying for the Personal Loan?
Getting personal loans online will give you an opportunity to enjoy a lot of benefits, among which there are such as:
- Easy application form,
- Fast processing of information shared,
- Competitive interest rates,
- Large amount of money to borrow,
- Flexible repayment terms,
- Advantageous terms adjusted to your requirements.
Personal Loans vs Payday Loans
- Repayment Term: If to compare personal loans with the payday loans, for example, then the first difference you are able to notice will be that the repayment term of the personal loan is much longer than 1-2 weeks, which is the term to pay the short-term loan back. Here you are going to repay not the whole amount of money as payday loans lenders require but pay flexible sum of money each month, equal pieces of payment monthly.
- Amount of money to borrow: personal loans give you a chance to borrow from $1000 to $80000, this will depend on the lender and on the country’s legislation, however, there are no such restrictions as payday loans have. Compared to personal loans, payday loans may offer you much lower amount of borrowing, which is up to $1000 only, which is because of the different repayment periods these two loan types have.
- Interest rates: compared to payday loans with the fixed interest rate, personal loans’ rates may vary depending on the terms, credit score and purpose of borrowing money.
- Credit check. Compared to the payday lenders who don’t have any credit check providing all types of borrowers with the guaranteed approval, here most number of lenders have credit check and require more documents than when you apply for the short-term loan. It is quite natural as nobody is going to risk and give you more than 50000$ without having any guarantees that you are a reliable borrower.
- Application form. If to compare an online application process, then you will be able to admit that the application looks more complicated when applying for the personal loans than in case you want to get payday loans online. However, it is also rather simple.
Among the common features with payday loans online there is an absence of collateral for both payday loans and personal loans.
Information You are Required to Provide For Getting Personal Loans
There is a list of necessary pieces of information, which you should be ready to provide the lender with to qualify for the personal loan:
- Documents for identification: passport details, Social Security Number, Driver License.
- Contact details: valid e-mail and telephone number.
- An evidence of a steady source of income: employment details or the proof of any other type of income.
- Employment details: if you are currently employed, you are required to share your company name, address and some other details, including its contact information.
There is basic information, which you are going to provide your personal loan lender with. The whole process of filling in the listed options will take no longer than 15 minutes, if you have everything at hand.
3 Tips How to Get the Personal Loan Online Quickly and Easily
There are some recommendations, which will be useful for those who are going to get personal loans online.
Tip number 1: The better your credit score is, the lower interest rate you will be able to enjoy.
What does it mean? You may know from getting payday loans for bad credit borrowers that payday loan lenders don’t provide credit check and teletrack, which means that they don’t care about the borrower’s credit history much. However, here the situation is completely different as there is a direct connection between your credit score and the interest you are going to pay. It is better to have good credit score when you apply for a personal loan. That’s why you should take into account that in case your credit score is bad, you may have a chance to be approved but will have to pay back high interest rates.
Tip number 2: The more reasonable aim you have, the more chances to be approved.
Compared to payday loan lenders who are not interested in the purpose you have applying for extra money, the lenders who offer personal loans do care about the intentions the borrower has. If you have noble aims and prospective projects, your chances to enjoy a loan increase. That’s why you should apply for a personal loan in case you have really worthy purpose to spend money for. Otherwise, you may be rejected.
Tip number 3: The more responsible borrower you are, the better deals you will be offered by the lender.
Relations matter much if you are going to cooperate with the personal loan lender for a long period of time. In case you behave as a responsible borrower and repays money without delays, you can count on getting the best deals from the lender. This means that you should have sound financial relations with the lending company.
Calculate an Average Personal Interest Rate Depending on Your Credit Score
Let’s consider an example of borrowing a personal loan, which amount is $10,000 and the repayment term is 3 years. As it has been already mentioned, the credit score influences the amount of interest rate to pay. In case you have:
- Good/excellent credit score- APR is 4.29% ( $297 loan payment estimate)
- Fair credit rating-APR is 10.66% ($326)
- Bad credit score- APR is 25.00% ($398)
As you can see, the closer your credit rating to the perfect score, the more money you will be able to save repaying the personal loan. You should have a serious attitude towards personal loans as fulfilling all your financial liabilities will lead to the improvement of your poor credit rating.
Advantages That Personal Loans can Provide You With
Even if it seems to you that getting a personal loan is not an easy task compared to getting the short-term loans, you should realize that it is worth it as personal loans are able to give you a lot of benefits. Check out the list of pros, which personal loans have:
- An opportunity to choose the best deal according to your individual needs;
- Online application procedure, which takes minutes;
- Low interest rates that depend only on your responsible attitude to your credit score;
- A chance to use a long-term loan for a large number of purposes;
- Short period of getting money, which is usually from 1 to 5 working days;
- Personal loans don’t require any collateral as they are unsecured.
There are many benefits and only one disadvantage, which refers to those, whose credit rating is below 580 as in this case not so many loan options will be available.
Quiz “Is a Personal Loan Right For You?”
If you can’t take a decision concerning getting a personal loan, you are offered to answer the questions below to find out if a personal loan is able to satisfy your current needs and meet all your requirements.
- Is you credit score good or perfect?
- Do you need a large amount of money to buy a house or make any other expensive purchase?
- Do you want to get a personal loan to be able to cover your past debt?
- Are you able to meet all obligatory requirements to get personal loans online?
- Have you chosen a personal loan instead of a payday loan due to the longer repayment term offered?
- Do you feel fine with the interest rates of personal loan taking into account your credit rating?
- Do you feel that know enough about personal loans terms?
- Do you think that personal loan online is exactly that type of loan, which is able to help you now?
- Do you have a steady income source to be able to make fixed monthly repayments of your personal loan?
- Do you prefer personal loans than traditional bank credits?
In case you have been careful reading about personal loans, you will be able to give the correct answers according to your current situation. If you are able to give “Yes” answers to all questions or at least the most number of questions, you are ready to apply for a personal loan as you are well-informed.
Personal loans are unsecured loans up to $80,000 and more depending on the personal loan lender. It is recommended to apply for a loan if you have serious reasons as you will need to make the monthly loan repayments on the regular basis.
The more worthy reason to borrow a loan you have, the more chances to be approved for the large amount of a personal loan you have. Personal loans are offered to the good, average and bad credit borrowers but with different loan offers. In case your credit rating is below the average, you have an opportunity to be eligible but you should realize that you will have the higher interest rate to repay compared with the good credit borrowers.
In general, personal loans are able to meet the expectations of most number of customers providing them with the best deals tailored according to their individual needs.