Despite what the screaming advertisements say, the world of personal loan can be very confusing, especially for people who are considering it for the first time. Key information that you should be armed with before applying for a personal loan:
The Rate of Interest Is Not the Most Important Factor
More than the rate of interest, you should really be more
concerned about the total cost of the loan. Often, lenders quoting low-interest
rates are found to be charging high origination fees or fees by other names
that can substantially elevate the cost of the loan. Rather than the interest
rate, you should find out what the APR is. The APR is the outcome of the
interest rate and all other fees and charges that are applied by the lender and
reflects the true cost of the loan in percentage terms. All lenders are
required to disclose loan APRs under the law.
Lenders Are Not the Same
You can get personal loans from a variety of sources like banks, credit unions, peer-to-peer lenders, and online lenders. However, you should make it a point to consider only lenders that are reputed and trustworthy as you will be more assured of getting fair rates of interest, information and policies that are transparent, ethical practices, and overall superior customer experience. Doing the research and due diligence on the internet as well as making use of a vast array of online resources is a smart way of identifying good lenders. Online lending platforms like http://www.libertylending.com/ that match your requirements with investors can be very useful in getting low rates and easy terms.
Personal Loans Can Empower You
Most personal loans are taken by people to bail them out of
a temporary cash-deficit situation or to restructure and simplify complicated
state of finances that they are unable to get on top of. Some of the most
common uses of personal loans are to pay for big-ticket expenses like weddings,
medical emergencies, vacations, household appliances, and gadgets, etc. when
you don’t have adequate cash.
A personal loan can also be used as debt consolidation tool
that will help you to get rid of expensive credit card balances and help to
bring your finances under control. A personal loan when used to refinance
expensive loans can help to save a lot of interest expense and make money
management better. When you take out a personal loan to repay your existing
debt you also get a chance to restructure the repayment period to allow for a
more affordable monthly outgo. By doing this you can considerably ease the
stress on your monthly budget.
Getting a personal loan can be a smart move if it helps you
to be financially responsible. You should look into the details of the offer
very carefully to make sure that you know exactly what the actual cost is and
what the terms of repayment entail. Rushing into borrowing is a sure-fire way
of getting into trouble later on.
Nancy Adler covers the personal finance sector for a leading business magazine.
She has written extensively on how internet resources and online lending sites
like http://libertylending.com/ have made it more convenient for consumers to
obtain personal loans.