Tips For Finding The Right Personal Loans For Your Financial Goals

Personal loans can have plenty of pitfalls which you need to be aware of. While you can save more money by applying for a personal loan versus a payday loan, there are some unsavory lenders who will bilk you with fees and higher interest rates. If you can do so, obtaining a loan that requires collateral can save you money in interest. Lenders who require no collateral are taking a higher risk in lending you money and that higher risk is there for spread out among everyone they lend to in the form of higher interest rates. If you know for certain you can repay any loan that you take out, you should consider taking a personal loan that requires collateral to save hundreds of dollars in avoidable interest and finance charges.

If you are not putting up any collateral and do decide going forward with a loan, you should be aware that any loan you are going for will be based primarily off three things, you income and your credit score, as well as any debts you currently owe. You will want to check your credit scores both your vantage and FICO scores, as well as pulling all 3 credit reports to check for any inaccuracies before applying. If you are not aware of your credit score simply sign up for a credit monitoring service and then cancel during the grace period to avoid any charges.

You can get personal loans from the following institutions:

Banks
Credit unions
Payday lenders
Peer-to-peer lenders
Credit building groups

You should avoid any offers that state “No Credit Check” as these are either scams or the interest that will be charged will be through the roof. Payday loan lenders fall into this category and should be avoided at all costs, even if you have less than perfect credit there are other options besides unscrupulous payday loan lenders.

You should always compare your loan options side by side, never just jump at the first offer that comes your way. If an offer was made to you, trust me the offer will stand tomorrow and the day after that, take your time to find the best possible loan rates, you owe yourself the best possible rates.

You can also consider another option other than a personal loan if your credit rating is 750 plus. The option I am referring to is credit cards which offer a introductory 0% interest rate for 12 to 18 months. This works out well if you know for certain that you can pay off the balance in the allotted introductory time frame as it then essentially becomes an interest free personal loan.

If you happen to have bad credit there are also options for you to obtain a decent loan. One such option is to get a co-signer and piggy back on their good credit. of course you need to be absolutely certain that you will honor paying back the loan as loans that go into default where someone has co-signed can cause considerable strains on family relationships or friendships.

Also as stated earlier if you have a car or a home consider using these as collateral in order to get lower interest rates. A home equity loan or home equity line of credit will most often be cheaper than a unsecured personal loan.

Kyle Burton
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Kyle is a contributing author who works for a number of financial portals in the online lending space. He has been covering the consumer loans and finance markets since 2006, his focus is to uncover topics that help borrowers get out of debt and save money daily. You can connect with him on Twitter, LinkedIN and Google+