Learn all about personal loans: what they are, how they usually work and why they might help you.
What Is a Personal Loan?
Simply put, a personal loan typically provides up-front cash and is usually paid back at a fixed interest rate with equal monthly payments. Unlike mortgages, car loans or student loans, personal loans need not be used for a specific purpose.
Why Might You Want a Personal Loan?
Personal loans can be used for a variety of purposes, but they typically fall under 2 categories: financing existing debt and financing new expenses.
If you have debt, you could use a personal loan to:
- Consolidate debt. If you have several different loans, it may be in your interest to consolidate them into one, simple personal loan.
- Take advantage of a lower rate. A personal loan may offer you a lower rate than one you’re paying on an existing personal loan or other kind of debt
If you don’t have debt, a personal loan may still come in handy for:
- Paying for a planned (or unplanned) expense. If you’re planning something big, like a home renovation project, and don’t quite have enough saved up, a personal loan can provide a good way to get started sooner. Of course, sometimes unplanned expenses pop up, like a big medical bill or necessary home repair. A personal loan can help there, too.
When considering a personal loan, be sure to research potential lenders and closely review the loan terms before you take action.
Would you like to see your credit score now? YES, SHOW ME MY CREDIT SCORE