What to Expect When You Apply for a Personal Loan

Written by Miranda Marquit on June 25, 2014

There are times when you need to borrow a relatively small amount of money, and pay it off over the course of a few months, but you don’t want to pay the high rate that is likely on your credit card. In these cases, it can make sense to apply for a personal loan. Some banks will offer a personal loan — also sometimes called a signature loan — to you.

A personal loan is usually unsecured, so you don’t have to offer collateral for such a loan. However, since you aren’t securing it, you might not be able to get a large amount. Many signature loans range in amount between $3,000 and $5,000. However, some banks offer revolving personal lines of credit of up to $15,000, depending on your income level and credit score.

Terms of a Personal Loan

If you get an installment loan, you can usually choose a term ranging from six months to two years. Usually, these installment loans have relatively low interest rates — at least when you compare them to credit card interest rates. If you are looking to borrow money for a year, you might be able to get a rate of between 7.99 percent and 11.99 percent APR, depending on your credit score. That’s still better than paying as much as 19.99 percent APR or more when you carry a balance on your credit card.

When you have an installment loan, you pay on a set schedule, and you can choose to pay it off sooner if you want. This can be a better source of cash than pay day loan or car title loan, and generally comes quickly. If you get a personal loan at the bank where you have your checking account, the money can often be instantly deposited in your checking account.

With a revolving line of credit, you might have to pay a higher rate of interest. However, it’s still usually a better rate than what you would pay with a credit card. Run the numbers to see what is likely to make the most sense for you when it comes to your cash flow needs. The advantage to a revolving personal loan is that you can pay it down as you need, and you don’t have to re-apply for a loan later.

Any personal loan will likely require some degree of documentation and a credit check. If you can pass muster, a personal loan can be a good alternative to higher-rate loans.

Posted Under: Loans
..
About Miranda Marquit

Miranda is a freelance writer and professional blogger specializing in financial topics. Her work has appeared in numerous media, online and offline. Her blog is Planting Money Seeds.


Jun25

There are times when you need to borrow a relatively small amount of money, and pay it off over the course of a few months, but you don’t want to pay the high rate that is likely on your credit card. In these cases, it can make sense to apply for a personal loan. Some banks will offer a personal loan — also sometimes called a signature loan — to you.

A personal loan is usually unsecured, so you don’t have to offer collateral for such a loan. However, since you aren’t securing it, you might not be able to get a large amount. Many signature loans range in amount between $3,000 and $5,000. However, some banks offer revolving personal lines of credit of up to $15,000, depending on your income level and credit score.

Terms of a Personal Loan

If you get an installment loan, you can usually choose a term ranging from six months to two years. Usually, these installment loans have relatively low interest rates — at least when you compare them to credit card interest rates. If you are looking to borrow money for a year, you might be able to get a rate of between 7.99 percent and 11.99 percent APR, depending on your credit score. That’s still better than paying as much as 19.99 percent APR or more when you carry a balance on your credit card.

When you have an installment loan, you pay on a set schedule, and you can choose to pay it off sooner if you want. This can be a better source of cash than pay day loan or car title loan, and generally comes quickly. If you get a personal loan at the bank where you have your checking account, the money can often be instantly deposited in your checking account.

With a revolving line of credit, you might have to pay a higher rate of interest. However, it’s still usually a better rate than what you would pay with a credit card. Run the numbers to see what is likely to make the most sense for you when it comes to your cash flow needs. The advantage to a revolving personal loan is that you can pay it down as you need, and you don’t have to re-apply for a loan later.

Any personal loan will likely require some degree of documentation and a credit check. If you can pass muster, a personal loan can be a good alternative to higher-rate loans.

About Miranda Marquit
Miranda is a freelance writer and professional blogger specializing in financial topics. Her work has appeared in numerous media, online and offline. Her blog is Planting Money Seeds.