Personal loans are a great way to borrow money. I am only able to lend money by securing real estate as collateral. Personal loans can help you borrow money without securing your home. You can obtain a secured or unsecured personal loan to suit your needs. The repayment terms vary based on what each offers. You could borrow a small amount that may be due when you receive your next paycheck, often referred to as a cash advance or payday lender. You can even borrow money on longer repayment term, such as over a 1, 2, 3, or 5 year period. Personal loans are usually a quick way to get the money you need and may not require any collateral.
You can obtain a personal loan through three common sources. Examples are; cash advance or what is also called a payday lender, a commercial bank, or a finance company. Each offer quick methods to obtain cash as soon as possible. The cost for these loans varies based on the company offering them. I will cover a few of the details in the chart below to help you make a decision on what is best for you.
Commercial Banks:
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Good Characteristics
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Bad Characteristics
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· Depending on the bank, they usually charge less upfront fees and lower interest.
· They may give you discounts for having other accounts with them, such as checking and savings.
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· Some banks a slow when processing your loan. They usually take more time than the other two options.
· They check your credit, and have higher qualifying requirements.
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Finance Companies:
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Good Characteristics
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Bad Characteristics
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· Depending on the finance company, they may process your application the same day.
· Although most pull your credit, their qualifying requirements may be easier than a bank.
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· They usually charge more fees and higher interest than a bank does.
· Some may not be local or may not lend in area’s outside of the area their branches are located.
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Payday or Cash Advance:
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Good Characteristics
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Bad Characteristics
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· Most do not pull your credit and have minimal requirements.
· You can obtain cash on the spot, same day, or sometimes the following day.
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· Short-term loans that are usually due within 30 days or most commonly on your next payroll date.
· Most are not local although some cities do have locations you can walk into.
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You should do some research on the company that you are dealing with. Make sure to obtain the total costs for doing the loan. You want to ask if there is a penalty for paying the loan off early. When making your decision, pay attention to what your needs are. If you are qualified to do business with a bank or a finance company, you may find that the money you borrow will cost you a great deal more than a payday lender over time. Payday lenders and Finance Companies have been under public scrutiny since their inception. Avoid getting wrapped up in the public persona, these two sources for cash may be just what you need to keep a broken down vehicle on the road, so you can work, or save a late charge, bounced check fees, or over-extending a credit line.
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