Need a Personal Loan?

In case you are in an emergency situation or just need instant cash to complete education expenses, repair your home, start a small business or pay old bills then this is the loan to apply for. A personal loan is referred to as an unsecured loan because no collateral is needed to back it as compared to a mortgage. Unlike credit card loans and other revolving loans, personal loans have a fixed rate and payment time. The amount is paid in installments across a given period. This loan can be obtained from an online lender, peer lender, credit lender or traditional bank.

Credit Unions

Credit union's aim is not to make profits from its shareholders rather it passes the profits to its members hence making their rates and fees charged competitively low compared to other lenders. To qualify for a loan through the credit union, one has to be a member. Different unions have different qualifications to become a member of their union. Credit card unions will use your credit score and credit history to know whether to offer you the loan and at what interest rate. Each credit union has a minimum and a maximum amount its members can borrow.

Loan Rates

The credit score affects the annual percentage rate (APR) which in turn affect the amount you will repay especially if you borrowed a large amount. However, there is a certain starting APR for every credit union. An individual's APR varies depending on his repaying ability, approved loan amount and his/her credit history, applicable discounts and the state of residence. These rates may change without notifying the members. Personal loans have a higher APR compared to secured loan rates. The personal loan rate is also determined by the borrowed amount and the term of the loan. Late payments will damage your credit, and you'll have to pay an additional fee.

Using a personal loan to make a large purchase, a remodeling project or for debt consolidation makes sense opposed to a credit card where their average fixed rates are around 12.5%. There are lower personal loan rates available through bank institutions that offer such competitive rates based on your credit score. If you find yourself in a situation where borrowing a lump sum of money up front and making payments in installments makes sense, check out a personal loan and current personal loan rates.