Personal Loans

A personal loan can be the best borrowing choice in a variety of conditions. Personal loans are typically unsecured loans, which mean that they do not have collateral backing them. They are based on a signed, formal promise to repay the borrower. This means that the application for the loan, the associated paperwork and finally, securing the loan is a much faster process.

Personal loans are particularly helpful when you need to make a major purchase or take a once-in-a-lifetime trip. You can avoid accumulating debt on high-interest credit cards or taking out a home equity loan. Personal loans provide quick and easy access to the funds you need. Interest rates on personal loans are generally lower than those on credit cards. This makes a personal loan the preferable choice for a specific purchase or project. Credit history affects the rates and terms of personal loans but there are personal loans for people with bad credit too.

Payday Loans

For smaller loan amounts, a payday loan is a special type of personal loan that may be more expensive than other types of personal loans. A payday loan is basically a cash advance granted with no credit check that the borrower uses to tide over until the next paycheck arrives. The borrower must write a post-dated check for the amount or allow the money to be debited from an account. Payday loans are not ideal for long term financial assistance.

Bad Credit Personal Loans

Bad credit ratings once prevented people from getting loans. However, lenders now offer unsecured personal loans to people with bad credit ratings at a higher interest rate. High interest rates or large down payment are issues that you may have to face if you need unsecured personal loans. It is advisable to improve your credit rating before applying for a personal loan, since the ratings directly affect the terms and conditions of a personal loan.

By: Kanchan

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