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Uses of Small Personal Loans
When a financial emergency happens, there is a wide range of loan options that you can check. From auto loans, student loans, home loans to personal loans, you can almost always find one that suits your needs perfectly. With home and car loans, it’s pretty obvious where you can use them for but what about personal loans?
Personal loans, unlike home and car loans, do not need collateral so you can secure the loan. Unlike the former, you also do not need to sign an agreement that details where you can use them for. In short, you have the prerogative to use them on wherever.
Most borrowers take out a personal so they can merge their open loans into one. With this option, you can score better terms since there is a chance that your monthly payment or interest rate could be lowered down. Instead of paying several loans in a month, you just now have one payment scheme.
Car or Automobiles
If buying a car, a car loan is still the better option since they usually offer a lower interest rate since there is a collateral. However, personal loans can still be used to pay for a car.
There are a lot of personal loans that are targeted for vacation. Work your way around you budget and always get the rate that best matches your situation. Don’t get more than what you can pay.
Personal loan can also cover for hospital bills. It will be a good idea for you to compare and contrast medical loans with a personal loan to check which offer the best rates.
Is your savings not enough to finance your dream wedding? Well, you’d be happy to know that you can also use a personal loan to cover for your wedding expenses. I would suggest that you combine the personal loan with your savings so as to keep the interest rate down.
Most people think that personal loans have a limit when it comes to the amount they offer; however, this is not true. In fact, personal loan providers consider several factors before they lend money to the borrower such as their income.
How Much Can I Borrow From A Personal Loan?
In the United States, you can find personal loans ranging from $100-$5,000, though some loan providers may offer more.
Even if the lender can offer up to $10,000 as its maximum amount, the money you can have depends on several factors, including your:
If you have bad credit, the loan provider may reject your application or, you may only qualify for a lower amount. Meanwhile, even if you have good credit but you have a low income, your chances of having bigger cash might be slim. This is because lenders do not just rely on one factor but all of it.
This means that if a lender requires you to be regularly employed, you have to be regularly employed; otherwise, your loan application may be declined. Another important factor lending firms consider are your current debts. If you have any outstanding accounts with other loan providers, you may only be eligible for a smaller amount. This is because your capability to repay the loan is questionable. After all, how are you going to settle the new debt if you have other accounts to worry about.
Therefore, before taking out a loan, find out the amount you can afford. To do this, all you need to do is to subtract your bills, debts, and other payables with your monthly income. The amount left from that is the amount you can afford. A loan calculator is useful as this will help you know the estimated amount you need to pay on a monthly basis while considering the payment term, interest rate, and other factors.
Small Personal Loans for Poor Credit Borrowers
Planning to get a personal loan with poor credit could be hard for some people because lenders require borrowers to have a specific credit score to be able to qualify a loan. For some instances, don’t lose your hope because there are still lenders who are willing to approve your loan application despite of having a poor credit.
Financial institutions such as credit unions, banks, and online lenders are usually the ones who offer personal loans. But, credit unions and local banks have high standards when it comes to credit score. Sometimes online lenders have almost the same qualifications like credit unions and banks but they might not require you to have good credit score. Online lenders usually offer higher interest rates than other traditional loans. So if you have poor credit and planning to get a personal loan then you can talk to your lender and offer collateral.In this way your lender might trust you and approve your loan application because collateral will serve as you payment for your personal loan if ever you can’t afford to repay them anymore. If you have credit cards you can try to reduce your spendings by at least 30% of your credit limit. In this way it will improve your credit score so that you can easily apply for a loan in the future.
Having a credit card with high credit limit could also help you get a personal loan online. Have you heard of paying a loan using credit card? Then if you haven’t heard about it yet you can try it because it is possible. This is only applicable for online lenders because some of them don’t mind if you’re going to pay them through credit card. Remember, when you a lender trust you to get a loan never missed out to repay. It is always better to finished paying off your loan without any problem so that when you need cash and have to apply for a loan in the future it won’t be a problem for you because you have a good credit score.