Personal loans are one solution in the short term for temporary money problems. They allow consumers to get funding that is needed for expenses, bills and other costs that were not anticipated. When you handle these loans wisely, you can improve your financial situation. But when not repaid promptly, they can lead you into serious debt. If you need financial help, you can secure this type of loan without much documentation. But the default terms and high interest rates make them a dangerous way to obtain funds.
There are many types of loans that fall into this category, and some of them are not “personal”, in a strict sense. Cash advances and payday loans are unsecured loans, available through financial and store-front cash advance companies, and you can get these types of loans online, as well. They are usually used for unexpected expenses like car repairs.
Some people, however, use personal loans simply because they want something sooner than they can get it if they save the money for it. They can find much financial trouble by pursuing this type of loan when they don’t really need it. The institutions that give these loans will not tolerate missed payments, and they have interest rates much higher than traditional loans.
Personal loans, if promptly repaid, can help you through a difficult financial time. If you can find out each company’s interest rate before you secure monies, you can use a loan calculator to see which company will give you the best deal. But don’t expect any of them to be truly good deals.
To get a personal loan, you will generally need to be age 18 or older, and you’ll have to have a checking account. This account will be used for your loan to be paid to you, and for the repayments to be taken out. Lenders don’t usually run credit checks for these speedy loans. Some lending companies do check to see if you have a lot of outstanding debt, or if you have a non-discharged bankruptcy in the courts.
The money you get from loans like this may be a blessing, or it may be a curse. The interest rates cause you to repay much more than you originally borrowed. You should choose a reputable lender with fees and rates that are not as exorbitant as the rest.
A personal loan might be for a smaller amount, like $500, and you can usually receive your funds direct deposited in your account in a day or so. If you want to borrow larger sums, you may need collateral, and you may be screened more thoroughly by a lending company. Be sure you can repay these loans in a timely manner, or they can quickly get out of hand.