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Thursday, September 22, 2016

Applying for Personal Loan: Basic Things You Need to Know

With so many banks offering tempting credit deals, more and more people employ it to get instant funds. No matter if you need it for nursery remodeling, holiday in the tropics or you want to consolidate your debts, personal loan can make it all possible. We’re here to guide you through the basic information concerned with the personal loan and help you find your fit.

 Benefits overview

You may be wondering what’s the difference between a personal loan and a credit card and why people tend to gravitate to the first option. The main advantage of a personal loan is fairly low interest rates. Also, the time frame you have to repay the loan is nicely paced. This enables you to pay back the money without burdening your monthly budget.

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Personal loans smorgasbord
There are several types of loan deals on the table, so it’s advised you get acquainted with their pros and cons in order to pick the one that suits your needs or plans. Before you start your research, check out our brief analysis of the common loan types.

Secured loan is ideal for people who want to purchase a house, a new car or any large asset. In this case, the asset is used as a security. Unfortunately, this means that the bank can seize the asset and sell it to cover the debt if you default on your payments.

Unsecured loans are a means to obtain the cash for an exotic trip, a home renovation venture or debt consolidation. The interest rates are higher than those of secure loans, but they are justified with a fact that there’s no security included. First-time users of this loan have to find a person who will be their guarantor.

Personal loan can have variable interest rates. If the interest rates go down, you will pay less, and vice versa. This can be a lucrative but unpredictable endeavour which makes budget drafting more difficult. On the other hand, personal loan can have fixed interest rates throughout the repaying process.

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Overdraft personal loans act as emergency funds with quick access. However, there’s a limit on the amount you can apply for and the interest rates are frequently higher than with other types of personal loans. Similarly, line of credit allows you to withdraw the money in times of need, and only pay the interest for the used funds.

Main steps 
  • Decide on the amount you wish to borrow
  • Calculate the repayment costs and whether you can afford it
  • Pick a repayment pace that suits you (monthly, weekly, two-weekly)
  • Figure out how long will it take you to pay it back completely
  • Select a loan type and rates according to your specific needs
  • Browse the internet for hot offers (low fees, low interest rates)
  • Get informed on documentation you need to initiate the procedure and compile it beforehand
  • Apply online or in person

Getting the best deal

If you have already identified a perfect type of loan for you and the amount you need, start comparing the deals. Take time to shop around for best loan packages and rates. Make sure you get properly informed about the lender’s terms. Thanks to technology advancement, we can now rely on the online tools to do it for us. All it takes is to provide information about your preferences and the system will filter the vast market for you.

Another way to improve your chances for best possible loan is to have your negative listings removed and starting anew with Clean Credit. You can get free consultations and be charged only after a successful outcome. By repairing your credit history, you will boost your eligibility for any type of loan you want.

You can secure a long-desired luxury trip or extra cash by opting for a good personal loan deal. Check out our basic guide for the first-time personal loan applicants.


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