3 Personal Loan Options You Should Know About
If you need a personal loan, you have a lot of options to choose from. Read on to learn about some of the loans you should consider.
When you need some extra cash to pay for unexpected expenses, purchase household goods or handle home improvement projects, a personal loan can help.
Of course, there’s no one-size-fits-all loan option for individual borrowers. The personal financing you need will ultimately depend on a number of factors, including the amount needed, your income, credit score and risk.
Here are some of the most common options for personal financing that you should know about if you ever need to use them:
1. Unsecured personal loan
According to NerdWallet, this is among the most popular personal financing options available. When you borrow money this way, it isn’t backed by collateral like your home or car. This means it’s easier for a borrower to commit to, but lenders are taking on more risk.
For this reason, an unsecured personal loan may require a higher annual percentage rate depending on your credit score, income and amount you need to borrow. This choice is best if you need a smaller amount of money (a few thousand dollars at most) to purchase goods immediately or cover personal needs.
2. Secured personal loan
As the name suggests, this option does require a borrower to provide collateral. Just like a mortgage is secured by your home and a car loan is by your title, you can back this loan with your personal savings or another asset. Since this is considered a less risky financing option for lenders, you may be able to borrow more and pay a lower APR.
If you need to help a family member financially, consolidate debt or make home improvements or car repairs, this loan type may be best.
It’s important to know your options before applying for a personal loan..
3. Personal line of credit
This is another option to consider when you need funds quickly. Investopedia explained that this borrowing option is similar to having a credit card . With it, you are given access to a limited amount of funds that can be used whenever and however you need.
It's certainly a proactive and convenient way to adjust for fluctuations in your monthly cash flow that may naturally occur throughout the year. Again, no collateral is required for this lending option, and unlike other types of credit, there are no balance transfer or cash advance fees.
Like a credit card, you can typically repay your debt immediately or over a specified period of time.
Other loan options to keep in mind
The three personal borrowing options listed above should be ideal for nearly every individual who needs financing. However, if you have a more specific purchase or investment in mind that you need funding for, there are some other loans to consider.
Vehicle loans can help you finance a new or used automobile for your personal or recreational use. Student loans are a popular way to fund your education at any age. There are also a variety of home loans to consider when you purchase a new property.
Vectra Bank has all of your borrowing needs covered. Contact your local Vectra Bank representative today for more information on our personal loan* options.
* Credit approval required. Terms, conditions and restrictions apply. See banker for details.