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.