Personal Loan Reviews
Reviews and Information to Help You Pick the Right Lender
Frequently Asked Questions
What are personal loans used for?
You can use a personal loan for anything you want. Many people use them to consolidate debt or pay for for big expenses, like a home renovation or a wedding. But unless the terms of your agreement spell out a specific use, you’re not bound to use the funds for any particular purpose.
How do personal loans work?
Personal loans are general purpose, unsecured loans, meaning you don’t have to put down any collateral. They’re often harder to get than credit cards, but they may have lower interest rates. Most personal loans have a fixed interest rate and a set repayment schedule, meaning you’ll repay the same amount each month for a set period, which could be anywhere from 12 to 60 months.
How should I shop for a personal loan?
Before you shop for a loan, consider how much you’ll need and what you can afford. A personal loan calculator can give you an idea of what your monthly payment might be. Also consider the type of loan you might be able to get. The better your credit score, the better the loan you’ll qualify for. You may also have a better chance of being approved for a personal loan from a bank or credit union where you already have an account. Gather quotes from lenders—many offer prequalified quotes that won’t harm your credit score. Compare the APR, fees, and other features such as unemployment protection. Once you’ve decided on the best loan for you, you’re ready to apply.
How can I get a personal loan from the bank?
Once you choose a lender, apply either in person or online. You’ll need to supply information like your Social Security number, your income, and other debts you have. After you’ve applied, you’ll need to wait for an answer, which could take up to seven days. Getting the funds after that may take another few days.
How can I consolidate debts with a personal loan?
Consolidation is the process of paying off multiple debts with one new loan in order to simplify your bill paying and, hopefully, lower your overall interest costs. You start by getting a new loan (either one marketed as a debt consolidation loan or a general personal loan) that ideally has a lower interest rate than the rates on your current debts. Use the money from the new loan to pay off your existing loans, credit cards, and medical debt. Just remember that the loan is only moving your debts around, it’s not eliminating them.
An unsecured loan is one that doesn't require collateral or a security deposit. With an unsecured loan, instead of pledging assets, borrowers qualify based on their credit history and income. However, unsecured loans tend to have higher interest rates and less favorable terms than secured loans.
A co-signer is someone who applies for a loan with another individual and who contractually agrees to pay off the debt if the other borrower doesn't make payments. The co-signer signs the loan application with the borrower and effectively guarantees the loan.
Debt consolidation is using one loan or credit card to pay off multiple loans or credit cards so you can simplify your debt repayment. With one balance instead of many, it should be easier to pay off your debt and, in some cases, secure a lower interest rate from the lender.
An annual percentage rate (APR) is the interest rate you pay each year on a loan, credit card, or other line of credit. It’s represented as a percentage of the total balance you have to pay. Personal loans tend to have fixed APRs, meaning they charge the same rate throughout the term of your loan.
A loan officer works at a bank, credit union, mortgage company, or other financial institution to evaluate, authorize, or recommend the approval of loan applications. If you’re applying for a personal loan, you may work with a loan officer.
A loan term is the length of time it will take for a loan to be completely paid off when the borrower is making regular payments. The time it takes to eliminate the debt is a loan’s term. Loans can be short-term or long-term notes. Typical terms for personal loans are 12, 24, 36, 48, and 60 months.
Installment loans are loans that you repay with a series of monthly payments. They typically have a fixed interest rate, and each monthly payment is the same. Fixed-rate home and auto loans are the most common types of installment loans, but personal loans, student loans, and other types of loans are also forms of installment debt.
A guarantor is a person who promises to be responsible for repaying a loan that someone else is taking out. Guarantors share legal liability for the debt, and their financial information is considered when determining loan approval. A guarantor may differ from a co-signer in that sometimes, a co-signer is responsible for covering a late payment immediately, whereas guarantors are a last resort after the lender has exhausted other ways to get payment.
A personal loan is a lump sum of money borrowed from a financial institution that can be used for almost any purpose. Personal loans are sometimes called signature loans or unsecured loans because there is typically no collateral required to secure a personal loan.
An origination fee is charged by a lender to cover the costs of processing a loan. It may be used to pay for preparing documents, processing your application, or underwriting your loan. In most cases, the fee is quoted as a percentage of the total loan amount.