- Online personal loans can be used for just about any purpose--car repairs, home improvements, medical care and more. Such loans are particularly appealing because they offer borrowers a great deal of flexibility. When you apply for an online loan you can complete the application on your time and at your computer. You have access to a wider pool of lenders and you can often expect an answer the same day you apply.
Online personal loans make it easy to compare loan rates and terms. Do this carefully before you apply. You may even want to use a personal loan calculator to determine which products will cost the least amount to borrow from over the life of the loan. Generally speaking, unsecured online personal loans carry higher rates of interest than other types of loans. Unsecured loans are those made without collateral (house, car, bank account, etc.). These loans are available from Internet based finance companies as well as local, brick and mortar lenders.The lender assumes greater risk in making these kinds of loans, thus the higher interest rate. Your ability to repay, as demonstrated by your income and credit history, will also have an impact on the interest rate for your online personal loan.
Secured online personal loans are also available. Apply for a secured online personal loan from your bank or credit union. - Online personal loans are available from finance companies such as Wells Fargo, Citi Financial and Beneficial. To qualify you must be at least 18 years of age and have steady income. You must also have a satisfactory credit history (such as a gas card or department store card that you pay on time) or a co-signer. Depending on income and the type of lender, you can borrow as much as several thousand dollars. Most online personal loan amounts range from a few hundred to a couple thousand dollars. Interest rates and payment amounts on these loans are fixed for the life of the loan. The repayment period usually lasts between 2 and 5 years for large loan amounts or a few weeks for smaller amounts.
You may also apply for an online personal loan from your bank or credit union. The primary benefit of applying for a loan from an institution you are already working with is cost. Your personal loan can be guaranteed by your savings account, which means you will pay less interest, you won't have to dip into your savings and you won't lose any dividends. - Whether you get an online personal loan from a finance company, bank or credit union you will have your money quickly. In some cases you can have the amount of the loan deposited into your account or check in hand within 2 to 3 days. Before you borrow, be sure you are working with a lender that does not charge a prepayment penalty. You should also be able to return the loan within a specified time frame, without penalty if you change your mind about the loan.
- Before you apply for an online personal loan you should make a budget that includes a realistic payment plan. Missed or late payments have a negative impact on your credit history and--when you consider late fees and other penalties--are very expensive.
If you have trouble making a payment, call your lender as soon as possible to make arrangements. Doing so may protect your credit rating and help you avoid harassing phone calls and letters for payment. - Review your loan needs carefully. Borrow only as much as you need. Online personal loans are ideally saved for emergencies only.
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