1: When Do I Need a Personal Loan?
What can you do?
How Do I Find a Good Personal Loan?
2: What Types of Personal Loans Are There?
There are many types of personal loans to choose from—and it’s easy to get confused.
Here’s a quick overview of each loan type to help you get started.
* For personal loans within 50 miles: Personal unsecured: Unsecured means that there is no collateral for your lender. In return for taking on more risk, you can often borrow up to $35,000 or more at a lower interest rate than secured loans.
* For personal loans beyond 50 miles: Unsecured prime: Prime mortgages typically have interest rates between 5% and 14%, depending on your credit history and other factors that banks look at when determining how risky a borrower is. Like most home equity products offer, these also tend to be long-term loans with repayment periods lasting 15 or 20 years rather than three to five years. Additionally, these can typically be used for things like purchasing property or consolidating debt.
* For personal loans outside of 50 miles: Secured*: Secured usually refers to borrowing against an asset, which essentially gives your lender something they can take back if you don’t pay back what you owe. There are two main kinds of assets people tend to use when securing personal loans—their homes and cars.
3: How Can I Get the Best Interest Rates on Personal Loans?
Go directly to lenders. Get rates from multiple lenders (most likely including banks) who specialize in handling all kinds of personal loans, including those that go toward consolidating debt or starting small businesses. See what each offers you before making a decision. It should be pretty straightforward—they’ll ask about your financial situation and answer any questions you may have—but it’s worth doing some research on their company first so that you’ll come across as informed instead of desperate or clueless.