“Personal loans involve regular payments and interest rates just like mortgage or auto loans, but they also have some unique features borrowers should know about. A personal loan can be a great way to consolidate debt or tackle a home improvement project without having to pull out the plastic. Unlike credit cards, personal loans often offer fixed interest rates and fixed repayment periods, usually three to five years, which makes it easier to budget payments.”
The ability to tap into a personal loan offer from an online lender gives consumers the advantage of quick access.
However, if you are weighing whether to go in for a personal loan online, there are other factors to consider that might outweigh the ease of access that online lenders offer.
“The growing comfort levels to conduct transactions online, as well as the ability to mine vast data resources to develop algorithms to predict a borrower’s credit risk have meant that we have seen a lot of new entrants into this marketplace,” says Tom Feltner, director of financial services with the Consumer Federation of America, a Washington, D.C.-based consumer advocacy group.
RATE SEARCH: If you’re looking for a personal loan, first check the offers on Bankrate.com.
In recent years, there has been a growth in the number of lenders offering these types of loans, such as Lending Club and Prosper.
Here’s what you need to know to get the best deal on a personal loan online.