Personal Loans

Thursday, April 06, 2006

Personal Loans and Payday Loans

If you are in need of immediate funding for any reason, a personal loan makes a good option in many cases. Lenders are less concerned with what personal loan money is to be used for as long as they can be assured that the borrower will make the repayment. It is best to be able to estimate the amount of desired funding before you make a loan request. Personal loans are usually issued for amounts ranging from $2,000 to $50,000, although shorter duration loans called payday loans are available for as little as $100 to several thousand dollars.

Personal loans are available in several different types, including secured, unsecured, and lines of credit. Your choices for the different types of loans depend on the amount of money desired, the chosen lender, and your financial status.

Secured Loans - Collateral is required for a secured personal loan. Often homes serve as collateral, but cars, boats, motorcycles and anything of significant value can be used. The secured personal loan interest rates are most often lower than that of unsecured loans due to the inclusion of the borrower's collateral. The collateral serves as insurance for the lender, so that they would somehow be able to recover their money in the event of borrower non-payment.

Unsecured Personal Loans - Collateral is not required for an unsecured loan, but the interest rates are typically higher. To gain approval for even a bad credit personal loan is much easier today than it was in the past.

Lines of Credit - Personal loan lines of credit function in a way similar to credit cards. A line of credit typically involves a revolving funding source that can be used at the borrower's discretion. Usually a specific amount of credit is agreed to by the lender and borrower. This enables the borrower to use up to the specific credit limit amount during the time frame before the payment deadline.

Personal loans are proven to be a convenient solution when immediate funding is needed for any sort of significant purchase. Prepare before you apply by determining how much you need and other details.

Saturday, October 29, 2005

Personal Loan Collateral

The inclusion of collateral into a personal loan agreement serves to establish financial credibility for the borrower, and to ensure the lender that they can secure their funds in the event of borrower default. This added security often permits a greater maximum loan amount for the borrower, as well as permitting a lower APR (Annual Percentage Rate) during the repayment term.

A security agreement for collateral must be drafted during the secured personal loan application process. This agreement serves as a means for the lending agency to legally repossess the property if needed. In addition to the security agreement, a promissory note is also drafted as evidence of the loan, and contains guidelines for that particular loan such as interest rate, principal, late fees, and default terms.

Some of the actual property that is frequently eligible to serve as collateral includes the following:

Real Estate - A home, house, condominium, mobile home, land, acreage, farm, ranch, mansion, or other real estate.

Motorized Vehicles - A car, truck, SUV, motor boat, jetski, yacht, motorcycle, ATV, RV (Recreational Vehicle), tractor, or other vehicle.

Personal Property - Jewelry items, guns, valuable equipment, or other personal property.

Other Assets - Stock securities, equities, fixed income securities, U.S. treasury notes, mutual funds, bonds, or other financial assets.

Monday, October 10, 2005

Personal and Payday Loans - Duration and Amount

When looking for a source of monetary funding, some of the first things a consumer might ask about a personal or payday loan are questions about loan duration and borrowing size.

Personal loans are commonly used by borrowers in order to finance large purchases such as an auto, boat, or college tuition, but also to pay off debts such as unpaid credit card balances. Typical personal loan amounts range from $2000 to $50,000 dollars.

Generally speaking, the greater the amount of a personal loan, the lower the interest rate, and vice versa. It wouldn't be uncommon to expect interest rates of up to 20% APR for smaller size personal loans (example $2000 dollars). For personal loans of a larger size, say $25,000 dollars and up, to be paid back over 5 years or more, interest rates might be a lot more affordable, even as low as 6 percent. One of the reasons for such high interest rates are the administration costs associated with loan arrangement.

In most cases, personal loans are paid back on a biweekly or monthly payment schedule, with payments being made every 2 to 4 weeks. The loan duration ranges from approximately 1 to 5 years, but even longer in certain cases. Payments are required to be made on time and in full, in order to maintain a good credit rating for the borrower. Sometimes a borrower can repay their debt early, before the scheduled end of the loan period, although early repayment charges may apply.

Payday loans on the other hand, are typically very short term in nature. As the name suggests, these loans are designed to serve as a cash advance until the borrower's next payday. A normal duration for this type of loan debt is about 2 weeks, although sometimes a cash advance can be extended.

Payday loans generally require a fee that is proportional to the amount of money being borrowed. For instance, a lender might charge someone $25 for every $100 that the person wants to borrow. This means that a $300 dollar payday loan would cost a total of $375 for the borrower.

Factors which affect the interest rate and borrower's eligibility for these types of loans are a person's credit rating, whether or not the loan is secured or unsecured, employment status, and proof of income. A borrower can apply for both types of loans either online via the internet, or in person at a lending institution.

Saturday, June 25, 2005

Bad Credit Personal Loans

Many consumers experience difficulty when trying to obtain a personal bank loan, simply due to their questionable past credit history, or former bankruptcy status. Banks exercise their discretion in denying applicants who have a less than prime credit rating or score.

Fortunately, some finance companies recognize the difficulty in someone with a bad credit history trying to gain approval to borrow money. A portion of lenders and bank loan companies are willing to make it easy for a person with bad credit or poor credit to gain approval for a low cost or affordable bank loan.

In some cases, banks offer what are termed " no credit check loans " in which a borrower's credit history does not play a factor in the application process. This type of arrangement is commonly available for short term or payday loans of less than $1000 or $1500.

Another option when applying for a bad credit personal loan is to include the use of collateral, which may be a key factor in persuading a lender that the payback risk is low.

As an alternative, a consumer could apply for what is known as a " subprime loan ". This loan arrangement usually involves a slightly higher interest rate, normally around .1%-.6% higher, but allows a borrower with bad credit to finance a purchase and begin to repair their credit. By establishing a subprime loan, they may be able to refinance their loan at a lower rate in the future.

The application process for these type loans remains convenient, especially online via the internet, often with an immediate or even overnight funding approval.

In addition, payday and personal loans can be established for these amounts:
$500 , $1000 , $1500, $2000 , $2500 , $3000 , $3500 , $4000 , $4500 , $5000 , $5500 , $6000 , $6500 , $7000 , $7500 , $8000 , $8500 , $9000 , $9500 , $10000 , $10500 , $11000 , $11500 , $12000 , $12500 , $13000 , $13500 , $14000 , $14500 , $15000 , $15500 , $16000 , $16500 , $17000 , $17500 , $18000 , $18500 , $19000 , $19500 , $20000 , $20500 , $21000 , $21500 , $22000 , $22500 , $23000 , $23500 , $24000 , $24500 , $25000 , $25500 , $26000 , $26500 , $27000 , $27500 , $28000 , $28500 , $29000 , $29500 , $30000 , $30500 , $31000 , $31500 , $32000 , $32500 , $33000 , $33500 , $34000 , $34500 , $35000 , $35500 , $36000 , $36500 , $37000 , $37500 , $38000 , $38500 , $39000 , $39500 , $40000 , $40500 , $41000 , $41500 , $42000 , $42500 , $43000 , $43500 , $44000 , $44500 , $45000 , $45500 , $46000 , $46500 , $47000 , $47500 , $48000 , $48500 , $49000 , $49500 , and $50000.

The largest cities offer the best opportunities for personal loans: New York City Los Angeles California Chicago Illinois Houston Texas Philadelphia Pennsylvania Phoenix Arizona San Diego San Antonio Dallas San Jose Detroit Michigan Indianapolis Indiana Jacksonville Florida San Francisco Columbus Ohio.