Best Rates For Personal Loans

Rates for personal loans are based upon different variables. The first is the type of loan that is best for you and you should consider the good and the bad for each. The first personal loan type is a SECURED loan. A secured loan involves attaching some sort of collateral to the loan such as a vehicle, a home or other depending on the size of the loan. The second type is an UNSECURED loan which is not secured against the loan amount borrowed. This type of loan is given based upon credit history, loan amount, and your monthly term.

Altogether the amount and your monthly term will equate your base rate. The other factor that determines your rates is your location (State and City). Currently at the time I am writing this, the national rate average for personal loans is 6.80% for the low, 11.83% for the average and 21.00% for the high.

Other than the amount you want to borrow, the loan type, base rate, length of loan (usually between 12 - 36 months), you have your points percent and whether it will be a fixed and adjustable loans. Fixed loans are generally cheaper than adjustable loans.

The FINANCIAL INSTITUTION that you choose also plays a very big role in getting the best rates. I did a search for an $5K unsecured personal loan (36 mos.) in Indianapolis, Indiana. Rates range up to 14.240% and fees can be as much as $165. Some lenders would even allow for 1, 2 or 3K minimum to be lent. I also searched other states and cities and found similar results but one lender stood out to be the lowest with NO fees that was PenFed with a 7.99% base rate.

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How Personal Loans Work

In life a lot of times things just happen without warning and for no reason. Maybe your car broke down, maybe you had some unforeseen medical bill or maybe you really need money for that vacation you are about to take. Whatever the reason there are points in all our lives were we need more money then we currently have available to spend. These situations call for something extra, a personal loan. A personal loan is a short term, unsecured loan that you can receive from a financial institution or loan company.

A personal loan is an unsecured loan. An unsecured loan is a loan that is not backed by any sort of collateral; a mortgage would be considered a secured loan. A personal loan uses your paycheck as collateral, but since your paycheck is not a piece of physical property the loan is not considered secured. When the personal loan matures you can either pay it back or extend it. When you extend the loan you are basically taking out another loan. A personal loan is sort of like getting your paycheck earlier. It is not any different then going to your boss and asking for your paycheck, minus a few dollars, in advance. Remember that different lenders may have different policies.

So why should you get a personal loan? If you need money and can not wait until your next paycheck then you do not really have another option. Defaulting on your bills, writing bad checks, and over drafting on your checking account will just cost you more money in the future. It's perfectly legal and is increasingly popular. A personal loan will make those headaches go away.

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