Monthly Archives: January 2016

How Personal Loans Help With Short Term Finance Emergencies

The lending and borrowing business has multiple different loan products available to consumers. These are often segregated into different categories, student loans, home loans, equity loans, car loans and more. Personal loans are a catch all loan that can be used for any purpose from a costly emergency repair to that dream vacation you have been meaning to go on for years. personal loans are very versatile, there is nothing that you cannot use them for or borrow for, with the exception that many lenders require the purpose of the loan only be legal. All personal loans have the following in common:


* These loans have the lowest minimum that you can borrow when compared to other loan products

* These loans are always short term, in fact most are only from one to five years in length

* Most often these loans are unsecured, requiring no collateral

* Come either fixed rate or variable rate. Most of these loans are fixed rate however.

* Easier to apply for generally. There are a few lenders that make it a hassle to apply for these loans, but for the most part you will have no trouble applying for one of these loans.

* Generally approval or denial decisions are made quickly. There are of course some lenders out there who have longer decision time frames, but the industry norm is to have your loan decision in 3 day or less, with only a few lenders taking up to 14 days. Many online lenders will have a decision back to you in 24 to 48 hours, provided that you provided all documentation needed.

If you need cash for anything, a personal loan could be just the right option for you. There are a few things you will need in order to apply;

* A decent credit history, since these loans are unsecured. If your credit history is poor you may need to obtain a cosigner to be approved for a loan. If you have poor credit, you could opt for a secured personal loan.

* You will need a job, and most lenders will require you to have been employed by your current employer for a period of 6 months to one year, depending on the lender. You will need proof of both employment and income.

* A social security number

* A bank account

Since these loans are not secured, the lender must charge higher interest on these loans, which is why your credit score is important. You should also beware of your credit score. The stronger your credit score is, the better interest you can negotiate with your lender.

If you have bad debt a personal loan is also a good option for you. You can combine all your debts into one monthly payment by obtaining a personal loan and paying off your bad debt. If you keep up with the payments on your personal loan you will have created a new positive trade line on your credit report, so you are killing two birds with one stone by using a personal loan for this purpose. First off your credit will start to repair from the moment you pay off your debts with the personal loan, and your credit will also improve from the responsible repayment of your loan.

While there are other options besides personal loans, personal loans are often the best option. You could try a pawn shop, but loan amounts and even outright selling of your personal possessions is always at a loss, since pawn shops at best give 40 percent of an items worth, if you are lucky that is. Often times selling to a pawn shop will result in getting 25 to 30 percent of an items worth. You could opt for a payday loan, and enjoy paying over 400 percent APR and go further into debt.