If you need to borrow money a personal loan may be just what you need. Many lenders offer unsecured personal loans to individuals for any number of reasons. You may need a personal loan to renovate your home, purchase items, motor vehicles or do any other things.
There are two types of personal loans
that you can apply for: secured and unsecured loans. Secured loans require collateral to ensure the loan. Collateral for a loan can include a mortgage
, your car, or any number of assets that you possess. The advantage of having a secured loan is that you will often be entitled to a lower interest rates. You can also get an unsecured loan which means that there is no collateral attached. In unsecured loans you will be required to pay larger interest rates.
When you go to get a personal loan you should have all your financial information available and ready for your lender to approve. You should have documents
documenting your assets, income, liabilities and any other financial information. Your lender may require a letter from your employer
detailing your monthly income.
When negotiating a personal loan with a bank or other lender you should be wary of, not just interest rates but also repayment plans, whether the lender has the right to demand repayment on the loan upon a missed payment, late penalties, and any other details of your loan agreement.
If you have bad credit then you may need more help getting a personal loan. If your credit score is below 600, you don’t have collateral, or you have a low income you may have trouble finding a personal loan. If you are in this situation you will still have options.
One of your first options is to go to your bank where you have your checking and/or savings account. When you have a history with a banking institution they are more likely to take a chance on you even though you have bad credit. Another option is to go to a credit union. Credit unions are more likely to look at you as a person instead of as an account and will be more willing to grant small loans than a major banking institution that handles mainly large loans.
You may also take advantage of peer to peer lending, borrowing from friends and family; or getting a family member to co-sign a loan. Payday loans, car title loans or tax refund loans. These types of loans will grant you a small amount of money, usually around $1,000 to $1,500.
If you have bad credit you may be in a desperate situation. Some lending institutions will attempt to take advantage of this. Look out for predatory lending that has difficult repayment plans and has extremely high interest rates.