Personal Loan describes any loan where money that is borrowed is to be used for personal use. If you are taking out a loan to fund something to be of personal use, or to help you out with personal issues, then that is a personal loan. Personal loans can be used for any number of things: debt consolidation, home improvement, paying off high interest rate credit cards, car purchases, vacations, etc. Most personal loans are unsecured, meaning they do not require security or collateral.
An unsecured personal loan is a loan that does not require collateral to back the loan. Usually, the people who would be eligible for this type of loan would be people who do not own a home, or people with bad credit. An unsecured loan normally means less risk to the person taking out the loan. This is due to the fact that a person will not have to use their home as insurance for the loan. However, due to the lack of collateral, the interest payments on any unsecured loan tend to be a little higher than with a secured loan.
A secured personal loan is normally assigned for homeowners. This is because a home is used as collateral, and the loan amount is usually for more, up to $15,000. This presents a higher risk to the lending company, so this type of loan requires some security or insurance. A secured personal loan can be used to make home improvements, for which you can borrow money secured on your home and increase the homes value.
There isn’t much of a difference between a bank loan and a personal loan, they are essentially the same thing. However borrowing from a bank generally requires a very good credit history. Shopping around and getting loan quotes over the Internet allows you to compare interest rates and find the best deals.
Getting a personal loan with bad credit is no problem. Unsecured Loans for $1000 or less do not require a credit check or collateral, so if your credit is in bad shape it is not an issue. The only requirement for a bad credit personal loan is that you have a checking account with a bank. For loans of higher amounts, you may be required to be a homeowner and put up some collateral if your credit is not perfect. However, this all depends on the loan company and the amount of money you want to borrow.
To find the cheapest loan rates with the lowest interest you need to shop around. Getting online loan quotes allows you to compare the rates and terms offered by several or more lending companies. Doing this online saves time and is a lot quicker.
Once you have completed the online application and applied for a loan quote you will receive an instant reply. Depending on the type of loan you are interested in, the amount of money you want to borrow, and the lending company, it can take between a few hours to a couple of days before you receive your loan. Most unsecured personal loans $1000 and under can be processed overnight and your money can be wired directly into your checking account.