Personal loans look attractive because they go somewhere in a middle range – you could get more than what your credit card provides, but little enough to be able to keep it unsecured. In other words, the loan will not be secured against assets. You will pay back a particular amount every month and chances are you will be able to pay the loan off earlier if you have the funds.
At a first glance, the personal loan may sound easy – it is. You still have to become familiar with its concepts and principles in order to make the most out of it. Generally speaking, a personal loan is the type of loan that cannot be secured against an asset – such as a car or an asset. Some banks may also refer to it as an unsecured loan.
All in all, here are a few tips to secure a great personal loan or even loans for bad credit without too much hassle.
Shop around for offers. Check out lenders over the Internet. There are, of course, a few tools out there. Most credit agencies out there will provide tools to find credit matches – they will match your credit history to the requirements of various lenders. Of course, you can also research your favourite banks and lenders individually. If you have a great credit, you might be pre-approved before even starting the application, not to mention low interest rates.
Make sure you know what you need this loan for. You can get a personal loan for almost any reason out there – from getting a new car to repairing your home. But then, you have to use the money for the right purpose. If you get a loan to consolidate credit card debt, make sure you use it for this reason. It has low interest rates and it has a specific profile. You cannot use it to buy a new car, for example. If you are after a new car, you will have to find a different lender.
Look into your bank
Credit unions and banks provide personal loans as well. Such institutions may provide less competitive rates when compared to online companies. However, having a strong relationship with the bank could give you a good deal, especially if your credit score is also good.
On another hand, credit unions are often non profit and can provide competitive rates.
Keep an eye on 0% balance transfer solutions
If you have an excellent score, you might be aware of it – 0% balance transfer credit cards are all over the place. You may already have a few offers in your mail. Based on your situation, this might be a good alternative to a classic personal loan. Make sure you can get rid of your balance before the initial period is over. Plus, you should be charged a standard rate. Calculate everything yourself to figure out which option is better.
Use a calculator
Comparing offers by looking at them and checking the rates only will soon get out of hand. Even if you write them down, they change all the time anyway. Besides, it is hard to work everything out – there are a lot of calculations involved, not to mention tables and mathematical formulas. This is what makes loan calculators so handy. Not only do they help sorting out offers based on various criteria, but you will also get an algorithm that runs the numbers for you.
Bottom line, a personal loan is an important decision and a bit of research will ensure you make the best possible choice for your needs – take your time and never settle for the first offer you can find.