There are many types of personal loans available in the market. If you’re in need of a loan, it is very important to examine all your options first before settling with your final choice.
A personal loan can get you the money you need in short order if you qualify. Personal loans are a popular tool for consolidating and eliminating high interest credit card debt. Just like credit cards, these personal loans don’t require collateral — they are unsecured. But unlike most credit cards, most personal loans offer fixed interest rates and payments, making payments easier to budget for. You’ll also probably be able to borrow a greater chunk of change than you could cover with a credit card, possibly at a lower rate.
The Simple Dollar’s Best Personal Loan Picks
If you want to get started on your search right now, here are a few lenders that stood out as I looked for the best personal loans:
- Best personal loans overall: Lending Club, Wells Fargo, and Prosper
- Best personal loans for excellent credit: Sofi, LightStream, and Earnest
- Best personal loans for average credit: PersonalLoans.com, Peerform, Avant, and Vouch
The personal loan space is growing with a number of online lenders challenging credit-card companies and traditional banks. In 2017, the trend toward a streamlined lending process, better interest rates and more transparent lending criteria will continue.
In fact, some brick-and-mortar banks are only recently returning to this kind of lending after the subprime mortgage crisis. So if you’re in the market for an unsecured personal loan, you’ll have plenty of options, especially if you have good credit.
As you read on, I’ll discuss unsecured personal loans in greater detail, why they’re difficult to obtain with bad credit, and strategies you can use while shopping to make sure you find a loan that’s right for you.
When and When Not to Use a Personal Loan
Before you get an unsecured personal loan, there may be other options to explore first depending on your situation and goals. Personal loans are great if you do not want to pledge anything as collateral, or you don’t have any collateral to pledge. However, unsecured loans probably won’t get you the best rate. For instance, a home equity loan will net you much better terms because it’s less …