Back in 2018, only 19% of Americans thought they earned enough money. Today, after the COVID-19 pandemic’s hit, you can bet that number is a lot lower now.
You’re probably one of the majority that feels they don’t get a high enough salary. Because of that, you might be falling short of life goals because of your finances. However, there are always loans you can turn to, such as online personal loans.
If you’re curious about how online personal loans work, then you’re in the right place. Keep reading for a comprehensive guide on this type of loan.
Personal loans are a type of installment loan. This means you borrow an amount and then pay it back slowly over a set period of time. This repeats until you’re done with the whole loan, plus interest.
These loans usually have short to moderate term lengths, plus you can get the money quickly.
What’s great about personal loans is you aren’t restricted in how you use the money. Whatever you want to fund, you can use the loan for. For example, you can go on vacation or you can consolidate your debt so it’s easier to handle.
Online personal loans are ones you can apply for and receive through the internet. Traditionally, you’d contact a lender and meet in person to discuss and sign loans. But today, with the convenience of the internet, you can do all this and more in the comfort of your own home by reaching out to online lenders and brokers.
So what types of personal loans are there out there to take out? We’ll show you a few below.
Secured loans are ones you secure by putting down an asset as collateral. This reassures the lender that you’ll make your payments on time and in full since they’re holding onto something valuable of yours.
Because they have this reassurance, this usually means interest rates are a bit lower than unsecured loans. It also means you can have poor or no credit; you’re less than stellar credit won’t matter, as they can just take your collateral if you don’t pay up.
Some examples of secured loans include mortgages, auto loans, and pink slip online loans.
On the opposite spectrum of things, there are unsecured loans. As you may have guessed, you don’t need to put any collateral down to get this type of personal loan.
Understandably, lenders wish to only approve people with higher credit scores, as they’re more reliable and trustworthy. So if your credit score isn’t the best, you might not be able to even qualify for an unsecured loan.
Unsecured loans do have higher interest rates because lenders are taking on a bigger risk. Also, while there’s no collateral to take from you if you default on your loan, your credit score can still plummet if you miss payments or fail to pay them back completely. So make sure you pay on time.
In the majority of cases, you’ll be taking out a fixed-rate loan. This is where you make repayments based on a single interest rate for the entire term length.
This is usually preferred because you know what to expect in terms of your monthly payments. It’ll be a lot easier to budget in your loan repayments, as you’ll know exactly what’s coming out of your bank account every time.
However, a downside is you’re locked in. If interest rates drop during your repayment period, you won’t be able to take advantage of that.
Although rare, you might be able to find adjustable-rate personal loans (also known as float-rate or variable loans). As the name suggests, you aren’t locked into a single interest rate. Instead, it can go up and down while you’re making payments.
As you can see, this can be risky, as you never know how things will go. Of course, there will be measures in place to ensure you never pay about a certain APR, but there’s still the possibility of you paying on the higher spectrum of things.
In general, you should only go for adjustable-rate loans if you’re able to pay your entire loan off in a short amount of time.
Have online personal loans intrigued you after reading all about them? Then it’s time to learn about how to apply for one!
It’s very easy to find online loans. First, conduct some research to find out what online personal loan lenders and brokers are available. Check out client reviews to see if they’re reputable and trustworthy.
When you’ve settled on the site you want to use, you should be able to find their application easily. Fill it out with pertinent information, such as your full name, physical address, email address, and vehicle information if it’s a title loan.
Within minutes, you should hear back on whether or not you’ve been approved. If you have been, you can then decide to accept the online personal loan.
Then, you’ll get the money in your bank account within a business day. Usually, it doesn’t take that long. Many see the money in their accounts within the hour!
Now that you know all about online personal loans, aren’t they great for giving you that little financial push that you need? Whether you want to fix up your home, consolidate your debt, or finally go on that honeymoon you’ve always wanted, you can use a personal loan to make your dreams come true and get further along in life.
Do you have a vehicle you can put up as collateral? Then apply for a title loan now. You’ll get an answer within minutes and same-day cash too!