Personal loans


Education & Personal Loans

When you think of loans, mortgage loans, auto loans and student loans are probably the first that come to mind. However, there are many other situations in which some extra cash could come in handy. In these cases, you might take out a personal loan. Personal loans involve regular payments and interest rates just like mortgage or auto loans, but they also have some unique features borrowers should know about.

What is a personal loan? Why would you want one?

In a typical secured loan – like a mortgage or auto loan – the lender can repossess the item in question if you fall behind on payments. Personal loans are also called unsecured loans, and they work a little differently. You may take one out to fund an event (like a wedding or a vacation), a home improvement project or a catastrophic expense. Because there’s nothing for the lender to repossess, you’ll pay a bit more in interest, plus any other loan fees your lender may attach.

You may also take out a personal loan to pay off debt. Imagine you’re paying 18% interest on your credit card balance, but you can get a personal loan at 13%. You might pay your credit card bill with a personal loan and make monthly payments to your lender instead. You’d pay less in interest over the life of the loan and have fixed monthly payments.

Because personal loans are reflected on your credit report, handling one responsibly can also boost your credit. On the other hand, defaulting can hurt your score, so don’t take out a loan if it’s not in your budget.

What affects your personal loan rates?

If you and your neighbor both take out a personal loan, you may get completely different rates. Why? Like a mortgage or auto loan, your rate depends on a few factors.

Interesting facts

  • Upside-Down, also known as negative equity, refers to owing more on a loan than the value of the asset for which the loan was used to purchase. Upside-down loans occur when the asset depreciates in value, or was overvalued when the buyer purchased the asset.
    For instance, given that most cars rapidly depreciate in value, it follows that...
  • In corporate finance, Structural subordination refers to the concept that a lender to a company will not have access to the assets of the company's subsidiary until after all of the subsidiary's creditors have been paid and the remaining assets have been distributed up to the company as an equity holder. For example, if a lender loans money to...

Additional information


Easy Personal Loans from 36MonthLoans.com
Easy Personal Loans from 36MonthLoans.com
Credit Cards & Personal Loans : About Interest Rates on
Credit Cards & Personal Loans : About Interest Rates on ...
Student Loans : About Personal Loans for College Students
Student Loans : About Personal Loans for College Students
Benefits Of Personal Loans
Benefits Of Personal Loans
Personal Loans -What You Should Know Before You Get A
Personal Loans -What You Should Know Before You Get A ...
How To Benefit From A Personal Loan
How To Benefit From A Personal Loan
Personal loans 101
Personal loans 101
About Bank Personal Loans
About Bank Personal Loans
How to Get a Personal Loan
How to Get a Personal Loan

Popular Q&A

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What is an unsecure personal loan?

It is a loan based upon your signature and good faith, with good credit history, and a job, that you pay back

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How to Apply for Personal Loans.

A personal loan can be a great way to build credit or as a short-term solution to a specific financial need. A bank, credit union, or other lending institution will provide you the funds you need in return for the promise to pay back the money over a fixed period of time at a given interest rate. The specifics of how to apply for personal loans may vary from lender to lender, but the basics are the same.