Average Personal Loan Interest Rates

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Personal Loans

Personal Loans Cash There are many times in your life when you may need extra funds, such as when you want to consolidate bills, fix up your home or car, pay for college, plan a wedding, or take a vacation. Personal loans provide a solution to help you meet short-term needs and long-term financial goals.

American Business Credit offers short-term personal loans and long-term personal loans. As lenders, we base your loan qualification, amount, and interest rate on your credit score. At the same time, you should make your decision according to your needs, financial situation, and ability to repay the loan amount over the set period of time. To gain consideration for a personal loan, you'll complete an easy application and provide verification of your credit and financial situation.

Benefits of Personal Loans

Personal loans offer many benefits. First and foremost, the entire process and your loan are personalized. This means you'll get individually suited loan amounts and terms. It also means you can use your loan funds for any purpose. You can pay off other higher interest debt, remodel your kitchen, or buy something you have always wanted. Working with American Business Credit for your personal loan means you'll enjoy a simple application process without the hassle or stress of having to go to a traditional bank.

A major advantage of short-term personal loans and long-term personal loans is the fixed interest rate. Taking out a credit card loan or other revolving loan comes with interest rates that fluctuate with the economy. Unlike these personal funding sources, most personal loans offer a fixed term for repayment. With fixed terms, you gain peace of mind in knowing your loan remains at a set interest rate with clear monthly payments.

At a glance, the benefits that come with an American Business Credit personal loan include:

  • Easy application and funding processes
  • Quick receipt of funds if approved
  • A wide range of loan amounts
  • No prepayment penalties
  • Competitive interest rates, terms, and monthly payments
  • No need to visit a bank

Reasons to Take Out a Personal Loan

You likely have wondered if this type of loan is right for you, so what are good reasons for taking out a short-term personal loan or long-term personal loan? According to Investopedia.com, great reasons for submitting your application for convenient funding include:

Credit card or bill consolidation

Having multiple credit card accounts or bills causes stress and financial inconvenience. Using your personal loan, you can consolidate all of these balances into one monthly payment. This makes budgeting easier, and your loan interest rate may improve upon the higher interest of your outstanding obligations.

Student loan refinancing or consolidation

Student loans often cause stress for those trying to repay them. Through refinancing using a personal loan, you may gain a lower interest rate that will help you pay the amounts more easily and with fewer headaches.

Financing a major purchase

Using a personal loan to buy furnishings, repair a vehicle, remodel your home, or purchase pricey electronics often makes sense over store credit cards. Plus, instead of waiting until you save enough money, you'll get to enjoy your purchases while you pay for them.

Paying for your wedding

Weddings are major life events. They also bring big expenses. Using a personal loan for these events and others provides many benefits over credit cards. Personal loans save you money when compared to higher interest rate options. Also, one low monthly payment adds convenience to financing your important celebration.

Improving your credit

Improving your credit score requires showing your creditworthiness. This means carrying a healthy mix of account types, including credit cards and other loans. Also, having a personal loan can dilute your credit utilization by lowering your credit use against personal credit limits.

Five Types of Personal Loans

As you consider taking out a personal loan, you need to know your options. Like any loan, each of these options provides benefits and drawbacks. The five common types of personal loans are:

1. Unsecured Personal Loans

Unsecured personal loans do not require collateral. The lender bases the loan decision on your creditworthiness and signature. This means people with positive credit scores gain a better chance of qualifying. Unsecured personal loans carry higher interest rates than secured amounts of home or car loans, so your interest rate is also higher.

2. Secured Personal Loans

For a secured personal loan, you guarantee repayment using collateral. Your collateral can include any personal assets, including your home or automobile. If you do not repay the loan according to agreed terms, the lender has the right to repossess your collateral.

3. Private Loans

Private personal loans originate from a private lender rather than a bank. This usually means you deal with a lender focused only on these types of loans, which typically carry slightly higher interest rates than other loan types.

4. Long-Term Personal Loans

Long-term personal loans carry lower interest rates than short-term personal loans. You also have longer to repay the amount of the loan plus interest. You gain the convenience of lower monthly payments at the cost of higher repayment over the extended period.

5. Short-Term Personal Loans

Short-term personal loans give you the money you need now for quicker repayment than long-term personal loans. The convenience that comes with this type of quick cash flow means you repay at a higher interest rate. Most of these loans offer amounts of $20,000 or under, and some require collateral.

13 Common Terms Associated With Personal Loans

When seeking a personal loan, you will run into many terms unique to lending. You will find the process easier if you understand the language you'll encounter. You should also ensure you understand the loan documents before you sign them.

Below are 13 terms common to the personal loans industry:

1. Asset

This is something you own that has monetary value. Common assets include homes, cars, computers, and jewelry.

2. Collateral

This is a pledge of an asset you make toward repayment of a loan to a lender. If you fail to repay the loan as agreed, the lender becomes the owner of the collateral.

3. Credit History

This is a record of how you have borrowed money in the past and repaid your debts. You also know your credit history under the common term "credit report."

4. Debt

Debt is the money you owe vendors, lenders, or other parties.

5. Equity

Equity is the fair market value of an asset minus how much you owe on the loan.

6. Fair Market Value (FMV)

This is the current value for which something would sell on the open market.

7. Home Equity

Home equity is the fair market value of your house minus how much you still owe on its mortgage.

8. Home Equity Line of Credit (HELOC)

This is a line of credit taken out against your home's equity. Most HELOCs allow 10 years of access to the credit line.

9. Home Equity Loan (HEL)

An HEL is a loan taken out against your home's equity. This is usually used to get funds for home improvement needs.

10. Interest

Interest is the fee you pay on borrowed money.

11. Interest Rate

This is the interest percentage amount for loan repayment.

12. Lender

A lender is a personal or business entity making funds available for borrowing.

13. Term

The term is the length of time from when you take out a loan to when it's fully repaid.

Do You Qualify for a Personal Loan?

Qualifying for a personal loan usually requires review of your creditworthiness. This means the lender checks your credit score. Having a good credit score makes personal loans a better financing option over most credit cards. A positive credit score also improves the interest rate your lender offers. The lower the interest rate, the more affordable your loan.

See if you qualify for a personal loan here

Tips for keeping your personal loan qualification and repayment manageable include:

  • Improving your credit score before applying for a personal loan
  • Keeping your credit score in a favorable range by maintaining a positive repayment history
  • Only utilizing credit and loan amounts you can financially handle
  • Shopping around for the best interest rates
  • Understanding the terms and conditions of your loans and credit cards
When you qualify for a personal loan, you have great options for keeping your expenses low. Repaying a personal loan as required means your credit continues improving.

Why Seek a Personal Loan From American Business Credit?

Are you considering short-term personal loans or long-term personal loans? First, congratulations on finding the right resource for your financial needs. At American Business Credit, we offer:
  • Unsecured personal loans
  • Secured personal loans
  • Short-term personal loans
  • Long-term personal loans
American Business Credit personal loan and business loan amounts extend to as much as $1 million. This means you gain the right terms and monthly payments for your financial needs and budget. You can quickly and easily gain the long-term or short-term personal loan you need to consolidate bills, make major purchases, plan a wedding, pay off student loans, or fulfill other personal needs.

The process of applying for a personal loan through American Business Credit is quick and easy. There is no inconvenience of running to the bank or attending stressful appointments. You simply fill out the easy form and start gaining the competitive financing offers you need from lenders you can trust.

Thousands of people just like you have gained the short-term or long-term personal loans they need from American Business Credit. People turn to and trust us because:

  • We possess extensive knowledge of the lending industry.
  • Our vast network includes lenders ready to provide the right loan for your needs.
  • Applying is quick and easy and done from the convenience of your home.
  • We provide offers from quality lenders within mere minutes.
At American Business Credit, we understand you have many personal loan options from a wide variety of lenders, so we'll work hard for your business. Together, we can find your best short-term personal loan or long-term business loan options.

American Business Credit vs. Traditional Banks

Many people feel anxious when applying for a loan. When you seek a personal loan from a traditional bank, the process is often stressful. Most banks require lengthy applications, and some require you to attend several meetings with the loan department. This means you spend your time and money before you even find out if you qualify for the personal loan you need.

American Business Credit understands how difficult that process feels. That's why you never need to worry about these stressful issues when applying for short-term personal loans or long-term personal loans through us.

Instead, we'll save you time while providing you with your best options for the financing you need. We'll use quick and convenient online forms that ensure the whole process is pain-free.

Once you apply, you'll quickly receive your offers for short-term or long-term personal loans from the vast American Business Credit network of lenders. You compare offers and choose the one best suited to your needs. When the process is done, you'll know that you made the right decision.

The benefits of taking out personal loans through American Business Credit include:

  • No up-front costs or fees
  • No collateral required for unsecured loans
  • No restrictions on how you choose to use your funds
  • A quick and easy application process
  • Multiple lending offers to choose from
  • Convenient repayment terms to suit your budget
American Business Credit continues a long-standing commitment to providing all of our customers with efficient and professional service throughout the loan process. This includes helping you find your best personal loan options from the highest-quality lenders.