Personal Loan Companies

Written by Rylee Newton
Bookmark and Share

If you need money for a home, a car, or even for an emergency situation, you might want to consider taking out a personal loan. When taking out a loan, it's essential to research the best possible loan type for your particular situation. Short-term loans are ideal for emergency situations while long-term loans are better for real estate and automobiles.

The terms of your loan are based on a number of different factors, including monthly payments, initial down payment, interest rate, and the initial loan amount. Most short-term lenders do not provide loans for more than $3,000. With some exceptions, short-term loans are generally paid off within a few months.

Secured and Unsecured Personal Loans

There are two basic types of personal loans. One type is the secured loan. In order to obtain a secured loan, you must put up some form of collateral. Home loans and many auto loans are considered secured loans because you can lose your house or your car if you fail to meet the terms of your loan. If you have bad credit, you may be asked to provide collateral as well.

The other type of personal loan is called an unsecured loan. Credit cards are considered unsecured loans. Most cash advance loans are also unsecured loans. You don't have to provide collateral when you take out an unsecured loan, but most lending companies do limit the loan amount to secure themselves against excessive loss due to loan default. It's never a good idea to default on an unsecured loan. Doing so often leads to irreparable damage to your credit.

Bookmark and Share