There are a lot of reasons why you might need an infusion of cash. Perhaps you need to replace a major appliance, do some home renovations, or buy a new car. Maybe you have medical bills to cover, or you need to move across the country. Whatever your reasons for needing cash, the big question is where you can find the cash that you need.
When you need a large amount of money, an unsecured personal loan may be your best bet. Take a look at what you need to know about unsecured personal loans and where to find them.
What Is an Unsecured Personal Loan?
You might be familiar with secured loans, where you offer up your house, car, or other property as collateral and a bank or other lender gives you the cash. You secure the loan by giving the lender something valuable that they can take if you don’t pay them their money back.
An unsecured loan, then, is when you get money from a lender without having to offer some type of property as collateral. You simply sign the paperwork agreeing to the interest rate and payment plan and promising to pay on time, and the lender gives you the money that you’re looking for. The amount that you can borrow varies depending on the lenders, but an unsecured personal loan could be as little as $1000 or as much as $50,000. Typically, unsecured loans carry a higher interest rate than secured loans, because the lender is taking a bigger risk by loaning the money without collateral, and therefore expects a greater reward.
Where Can I Get an Unsecured Personal Loan?
There are many different types of lenders that offer personal loans, ranging from traditional banks and credit unions to internet-based lenders to peer-to-peer lenders. Where you should look for an unsecured personal loan depends on several factors, including how much you want to borrow and what type of credit you have.
Many large banks and traditional lenders won’t handle small personal loans, such as those under $2500. Some credit unions will handle those smaller loans, and peer-to-peer lending sites, where your loan may be funded by one or several investors. If you have good or excellent credit, you will have a range of options no matter how much or how little you may want to borrow. However, if you have bad credit, you will find that your options are limited.
With no collateral, lenders have to rely on the information that they have available about you to determine whether or not they’ll receive a return on their investment, and the best information they have about your history of repaying loans is your credit history. Poor credit will cause many lenders to decide that you’re not worth the risk. However, finding a loan when you have bad credit is not impossible – there are some lenders who specialize in bad credit loans. You can find them by visiting sites like BetterLoanChoice.com, which matches potential borrowers with lenders quickly and efficiently.
What Do I Need to Get a Personal Loan?
In order to get an unsecured personal loan, you’ll need to provide the lender with information about yourself and your finances. Each lender will have their own requirements, but generally speaking, you’ll probably be asked to provide verification of your identity, address, and income. That means that you’ll need to provide your driver’s license or ID card, copies of your utility bills, lease, or title to your home, and pay stubs, W-2s, or tax returns. You may also be asked to provide personal information like your social security number and date of birth, so that the lender can check your credit history.
Many lenders will also want to see proof of your monthly payment obligations. That includes living expenses like rent or utilities, and also other types of debt, like student loan or credit card payments. They need to see this information to be able to tell if you have the income left over to pay their loan after taking care of your existing debt obligations. If you’re applying for a loan in order to consolidate your other loan payments into one monthly payment, then the lender will need to know what it is that you’re looking to consolidate.
An unsecured personal loan is a good choice for borrowers looking to consolidate, cover unexpected expenses, or make a large purchase. Make sure that you consider all of your loan options carefully before choosing one.
This information was brought to you by BetterLoanChoice
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