A personal loan can open a world of financial possibilities to someone in need and yet many people aren’t educated enough on the subject to understand and take advantage of them. Some still rely on high-rate credit cards when a lower-rate personal loan would save them hundreds.
Borrowers can get personal loans from a wide range of online loan originators, and the application process is much quicker and easier than dealing with a big bank.
There are more online options for personal loans than ever before. Here’s an overview of three leading lenders:
- Focuses on “Near Prime” borrowers with credit scores of 600-700
- Has issued more than $2 billion in loans
- No loan origination fees
- No pre-payment penalties
- Can check your interest rate without impacting your credit score
- Focuses on highest credit borrowers, and offers lowest rates
- One of the largest lenders, issuing more than $100 million in loans every month
- Personal loans from $2, 000 – $35, 000
- Minimum FICO score of 640
- Has issued more than $5 billion in loans
- No origination fees
- Unemployment protection – loans are deferred in the event the borrower loses their job
What can you do with your personal loan?
The best answer to that question is “anything you want.” There are no restrictions on how to use a personal loan, but here are some of the ways that the customers of the three lenders discussed above are choosing to use their loans.
1. Low-rate debt consolidation
The average credit card APR currently sits at 14.9%, so it’s no wonder that a large number of personal loans generated by the companies mentioned above go toward consolidating credit card and other debt into one low-rate loan. Lending Club, for example, reports that borrowers who use a personal loan for debt consolidation lower their interest rates by an average of 33%.
Online lenders are able to offer lower rates than big banks and credit card companies because they don’t have the same types of stringent capital requirements imposed on the “too big to fail” financial institutions. In addition, online lenders save money on overhead and pass those savings on to customers in the form of lower rates.
2. Big life expenses
The average cost of weddings has skyrocketed to around $30, 000, and fixing a leaky roof, a cracked foundation or other home improvements can also be a major expense. Borrowers can use online personal loans to tackle these large life expenses.
3. Unexpected bills
Sometimes, an unexpected death or medical emergency can prove financially devastating. A personal loan can be the saving grace when insurance doesn’t fully cover medical bills or damages from a fire or other natural disasters. These unexpected events can often create financial havoc, but a quick, easy online personal loan can allow you to manage these expenses responsibly.
The bottom line
Personal loans offer borrowers freedoms that they might not have been able to achieve without the additional money. Thanks to online lenders like Prosper, Avant and SoFi, getting an online personal loan has never been faster, simpler and more transparent.
The three examples described above are just the tip of the iceberg — there’s an entire marketplace out there dedicated to helping you find a little extra financial wiggle room when you need it.
Vozrozhdenie Bank (MICEX-RTS: VZRZ) is a Russian bank founded in 1991 and headquartered in Moscow. The bank provides personal banking and business services to clients in Russia through of a network that includes 161 bank branches and more than 780 ATM's.
The bank provides 1,600,000 clients with a range of services, from savings accounts...