“Need money in a hurry without having to go through tedious documentation processing? Want cash to fulfill your need without having to explain the reason for obtaining the loan? If you have a pressing need for cash, and don’t have any assets, but own a credit card, a personal loan is certainly advisable. This is because cash withdrawal using your card is far more expensive than a personal loan. But if you have assets like property, gold or shares, it is advisable to take a loan against these assets since these loans have lower interest rates.”
Maybe you’re looking for a way to pay down your holiday debt, cover the cost of a car repair or pay for your wedding. A personal loan can be a quick source of cash, typically without the high interest rates of a credit card or credit card cash advance.
“It’s certainly an option you don’t want to ignore,” says J.J. Montanaro, a certified financial planner professional with USAA.
Personal loans have become a fast-growing financing option for consumers, and demand continues to rise.
TransUnion found the number of people with secured and unsecured personal loans stood at 27.34 million at the end of the 3rd quarter of 2015, up 18% from 22.5 million in the 3rd quarter of 2013.
Pay back your debt in installments
With a personal loan, you borrow a certain amount of money for a certain period of time, and pay it back in regular monthly installments.
Sometimes, the loans are unsecured, which means you don’t have to put up collateral, like a house or car. The rate you pay is based on your credit history and credit score.
Along with traditional banks and credit unions, you also can find personal loans at online banks, such as Discover; online nonbank lenders, such as SoFi; and peer-to-peer lenders, such as Lending Club.
You don’t have to accept the first offer you get for a personal loan. Shop around for the best rates at Bankrate.com.
Here, Bankrate offers some of the pros and cons for those considering taking out a personal loan.