Common Types of Consumer Loans

Wednesday, August 16, 2017
Posted by admin under Consumer Loans 

Loan paperwork

Sometimes, you may need a loan, but you aren't sure exactly which loan would be best for you and your needs. You can continue reading below for information on common types of consumer loans. If you're still curious about details, it's a good idea to speak with your bank and see what they recommend. It's important to keep on top of payments and make sure that you're only borrowing what you can manage to pay back.

Credit Cards

Some people have multiple credit cards, but they can sometimes be difficult to manage and pay back. If you're only making minimum payments on your cards, you can expect to pay on that amount for quite some time. Usually, it's advised you pay off your credit card debt as quickly as possible, since the interest rates can be rather high. Many credit cards will offer low interest or no interest for an introductory period, but after that time the interest rates tend to climb significantly. Although there's certainly no harm in having a couple credit cards, and they can assist you in building credit, it's a good idea to make sure that they keep them under control.

Personal Loans 

Whether you have emergency car repairs, a water heater to replace, or any other unexpected and larger expense, a personal loan might be your best bet. You can generally get a personal loan through your local bank or credit union, and you should be able to pay it back over a reasonable period of time and with manageable interest. A personal loan can also be a relatively easy way to build up your credit over time.

Vehicle Loans

For many people, this may be one of the first loans they ever take out. Whether for a used or new vehicle, a vehicle loan should also be kept manageable. Always remember that in addition to your loan, you will also be paying for gas, repairs, and insurance. Keep those numbers in mind to make sure that you aren't overextending yourself on the loan itself. Over time, it can build up your credit score, but there are easier and faster ways to do that.

Of course, there are also mortgage loans and other common loans available. For the best consumer loans in Vermillion County, you should always keep in mind what you need and what you can manage. Always take into account additional and associated costs, so that your loan is easy to repay.

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All You Need to Know about Consumer Loans

Tuesday, May 23, 2017
Posted by admin under Consumer Loans 

As the economy continues to improve, many people in Vermilion County area are looking to personal loans to meet their financial obligations. Personal loans, including consumer loans in Vermilion County, Illinois, and mortgages, are more helpful to the average consumer now then they have been in the past decade. If you find yourself looking for some financial assistance, here are some things you should be aware of before taking out a personal loan or before you start looking for a mortgage lender in Catlin Illinois. 

Interest Rate and Credit Rating

The first thing to understand when deciding whether a personal loan is right for you is that it's sometimes possible to get a better interest rate with a personal loan than with a credit card. Whether you qualify for a low interest rate personal loan is completely dependent on your credit score. Since the interest rate from loan to loan can vary so significantly, if you decide to take out a loan, it's important to shop around for the best rate. 

Additionally, most personal loans are treated as a fixed-term loan when your credit score is calculated, which is typically better for your credit than a revolving line of credit or credit card. Another thing to keep in mind is whether the interest rate is a fixed rate obligation or variable. If it's a fixed rate, the interest rate will remain the same for the life of the loan. Variable rates can fluctuate depending on how the rest of the economy is doing. Most personal loans are fixed rate, which means your payment won't fluctuate over the life of the loan.

Compare to Other Types of Borrowing

Although personal loan rates are often better than credit cards, it's difficult to say for certain which will be better for you until you’ve compared both products. Make sure you thoroughly explore all available options before taking out a personal loan. Although the interest rate is often very low on a personal loan, these types of obligations are unsecured debts, meaning that the bank does not require you to put your home or vehicle up as collateral if the loan defaults. This lack of backing, unlike a mortgage or secured vehicle loan, is riskier for the lender. If you have equity in your home or other assets, you may be able to get a lower rate on a loan than a personal loan.  If you think a personal loan will suit your needs better, you can often check out rates online to find the best deal available with your credit score.  

Origination Fees

You also need to understand what types of fees are associated with borrowing money through a personal loan. When shopping for a loan, it may seem like the only thing you need to be aware of is the interest rate, but unfortunately, this is simply not the case.  Most loans come with both an origination fee and an application fee.

Application fees are typically a few hundred dollars for most personal loans. There are some lenders that also impose a prepayment penalty, meaning that if you decide to pay your loan off faster, you're required to pay additional fees. Make sure to do thorough research on any potential additional fees you'll be obligated to pay before taking out a personal loan.

Tagged Loans  Personal loans  Finances  0 Comments