Personal loans can come under many different aliases, like payday loans, installment loans, cash loans and advance loans. Basically any loan that is outside of a student loan, mortgage or auto loan is known as a personal loan.
Personal loans can be used to do home repairs, pay medical bills, buy school supplies for the kids and other critical bills. These loans tend to be unsecured and easier to get than secured loans since they are for smaller amounts, typically ranging between $300 and $50,000.
Do you think a personal loan can improve your financial situation? Check out some pros and cons of personal loans below to consider when making your decision.
Personal loans are easier to attain because they are unsecured and do not require any collateral. These loans can also be found online and have very minimal eligibility requirements to apply. If you're in an emergency situation, you don't need to complete a lengthy process to get access to funds quickly.
Because personal loans are so easy to attain, they carry high interest rates to counter the additional risks for lending to an unsecured borrower.
Many personal loan companies have flexible rates for repeat customers in good standing. These customers often get the "VIP" treatment and as such may be eligible to receive higher loan amounts in the future with lower interest rates.
Personal loans don't have a very long life span. The length of a loan varies greatly depending on the amount of the loan and can typically be as short as a month to as long as 5 years.Personal loans are set up with short life spans to make your payments affordable but also to get you out of debt in a timely manner.
It is important to make payments on the assigned due dates to avoid any unnecessary late- or extension fees on the loan. These fees can add up before you know it leaving you with less and less money to put down toward your loan principal.The majority of your payments are often put toward the interest alone, making your loan last longer than expected and cost you more money.
A realistic budget can alleviate any additional fees with personal loans and can ensure stronger financial stability in the future. Personal loans are a great way to get immediate financial assistance when you're faced with an emergency when you borrow responsibly.
Get a personal loan of up to $1,250 in your account as soon as the next business day from MaxLend. Apply now.