If you are interested in a personal loan, know that there are many types to consider. Your decision should be based on your current financial situation, as well as your ability to repay the money in the future.
Personal loans are made for any purpose that is not defined by the terms of the loan. From fixing up your home to paying for your child’s college and everything in between, if you are in need of money for an unspecified reason this is the type of loan for you. At American Business Credit, we offer short term, and long term personal loans. Contact us and we will find the right program for you!
Five Types of Personal Loans
These loans are not secured by collateral, but instead given based on nothing more than the borrower’s signature. In short, the better your credit the better chance you have of qualifying. Because this type of loan is not secured by collateral, the bank will charge a higher rate of interest.
Learn more about unsecured personal loans.
As the name suggests, a secured loan is backed by collateral. This can be any type of asset, from a home to a car to a boat. If you neglect to pay or live up to the terms of the loan, the collateral can be repossessed.
Learn more about secured personal loans.
Private personal loan.
Why deal with the bank when you can get a loan from a private lender? This can be an organization that focuses its business on lending, or a friend or family member. Much like an unsecured loan, you can expect to pay more in interest.
Learn more about private lender loans.
Most of these personal loans have lower interest rates (when compared to short term loans) and a longer term. In turn, your monthly payment is going to be lower. However, since you are making payments for a longer period you end up paying more in the end.
Learn more about long term personal loans.
Do you need a loan for a short period of time? With a short term personal loan you can expect a higher than average interest rate – this is how the lender makes their money. Also, most short term personal loans are for $20,000 or less and many require collateral.
Learn more about short term personal loans.
As you attempt to decide if a personal loan is the right choice, consider all five options above. There are pros and cons to each type of loan, so make sure you know exactly what you are getting.
Personal loans are offered by banks and credit unions as well as private lenders. If you are in need of money for an undefined purpose, a personal loan is the right choice.