Personal Loans

A personal loan is a lump sum of cash an individual consumer can borrow for most personal uses, like home improvement, a new or used vehicle, debt consolidation, taking a vacation, an upcoming wedding, plastic surgery or other expenses that a person may have.
It gives you the ability to fund major purchases, then pay it off at a comfortable pace that suits you and your individual financial situation.

In most cases, the borrower gets a certain dollar amount (which is called the principal) from a bank, a credit union or an alternative private lending company and pays it back regularly on a monthly basis with additional cost (the APR, which is the interest rate plus additional loan fees).

Repayment is done in consecutive monthly installments over the specified loan period.
Some lenders want the potential borrowers to disclose what they will do with the money before approving the application, so it’s a good thing to be prepared to answer this question.

There are two types of personal loans available: secured and unsecured.
A secured loan requires the applicant to produce some form of collateral or security, such as a real estate asset, land or a car, in order to ensure repayment of the requested loan.
Alternatively, unsecured personal loans, which are far more common, do not require collateral and carry a slightly higher interest rate, due to the higher risk they pose for the lenders.

The amounts and terms of the loan may vary widely and depend on several factors, including each lender’s specific policies, the borrower’s state of residence, the size and duration of the requested loan, employment and income situation and personal credit rating.
Generally, loan amounts range between $500 and $10,000.

Many lenders look at the overall financial picture and not just the actual credit score and history, to determine an applicant’s eligibility for a personal loan.
Since on-time payments are reported back to the main credit bureaus, it can help borrowers with a limited or bad credit history improve their score.
Before submitting an application, it’s a good idea to be closely familiar with your current credit report, so you’ll get a better understanding about which loan is best for your individual needs and which types you can qualify for.

Common Personal Loan Uses

People can use these types of loans for a variety of purposes at the discretion of the borrower, which can help finance a major purchase or solve immediate cash flow problems.
Here are a few examples:

• Vehicle financing (car, motorcycle, etc).
• Home renovation / kitchen remodel
• Debt relief
• Education fees and school tuition
• Funeral costs
• IVF treatments
• Legal fees
• Moving
• Cosmetic surgery
• Medical bills
• Travel and vacationing
• Wedding expenses

How Fast Can You Get Approved?

Many personal loan services work quickly and offer near instant approval, which means that their credit decision can be given to the customer almost immediately, within seconds, minutes or a few hours at most, usually by email.
Working with companies that are able to review your loan request the same day is a huge advantage that can save you a lot of time and hassle, because you can know what loan amount you qualify for right away.
It means that the whole cycle, that includes completing an online application, being approved, processed and even getting the actual funding can be finalized within one day.
These quick money transfers and direct deposits often allow the borrower to get the money he needs in 24 hours, something that can be quite useful.