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Personal loans are one of the most expensive categories of loans you can avail of. These are unsecured loans that can be easily availed of and banks are eager to offer them. In fact, you might have received a few calls offering instant personal loan because you have been a loyal customer to your bank. However, if you opt for a personal loan, expect to pay an interest rate of anywhere between 9% and 20% per annum. The reason is simple: an unsecured loan means that the lender will not ask for a collateral. This is only feasible for the lender if they have a sense of what your credit history is like and whether you have the capability to repay the loan. But that isn’t enough of a safety net. Hence the high interest rate. Given that they are expensive, but easily available, personal loans seem like a good option to fund an emergency expense, if you don’t have a contingency fund in place, or if the fund was depleted for some reason. Of course in the absence of emergency money, falli...

Most people who consolidate debt with a personal loan see their credit score go up — here’s why. Can a personal loan raise your credit score? Several personal finance experts have said that it can, but now we have proof. Credit bureau and consumer finance company TransUnion recently released a new study at the 2019 Money20/20 conference that examined consumers who used a personal loan to consolidate credit card debt. For 68% of those customers, the study found that their credit scores increased by 20 points or more within three months of consolidating their debt. A pair of hands shaking hands and also transferring a wad of 100-dollar bills. The results were even more impressive in subprime and near-prime consumers, where the study found 20-plus-point credit score improvement rates of 84% and 77%, respectively. This may seem counterintuitive. After all, it is well known that applying for new credit (including a personal loan) can have a negative impact on your credit sco...

Some financial terms are so similar that they end up being used interchangeably. But that doesn’t mean they’re the exact same thing. One especially common mix-up: the difference between cosigners and guarantors, who are both people who can help you get a loan if your individual financial history isn’t strong enough. Let’s break it down: a cosigner agrees to be responsible for a loan if the primary borrower has trouble paying it back. It’s typical for people with young credit histories or those repairing their credit to need a cosigner for a loan. For instance, a student taking out private loans for college is likely to need a cosigner since they don’t have a long employment and financial history. A cosigner is different from a co-borrower. The latter is used if two people want to own something together, like a car or home, Bankrate explains. If you have a cosigner, it doesn’t mean that person has the right to drive your car whenever they want. It ...

For those who are trying to find a strong foothold in the real estate business, you’ve probably come across the idea of hard money lenders before. Also known as private lenders, these men and women have had somewhat shady reputation over the last few years. A few bad cases have put a black spot on the business for many, but this does not mean you should be avoiding them in the same way you avoid white after Labor Day. In fact, hard money lenders are on the rise again. Hard money lenders are a bit different than your other loan options out there. They’re shorter (usually 12 months, but can be extended to a few years), tend to focus more on property value than borrower credit history, and require monthly payments of interest until a balloon payment at the end. They are available for almost all types of properties, but that largely depends on the hard money lender themselves. So, have you thought about working with a hard money lender? Check out some of our crucial tips ...

A personal loan is an unsecured loan offered by banks and non-banking financial companies (NBFCs). These are unsecured because a borrower is not required to pledge any asset—property, jewelry or car—to get the loan. For this reason, personal loans come with a higher interest rate compared with secured loans, such as a home or car loan. A personal loan comes in handy in case of a financial emergency as you can borrow the required amount in 12-48 hours from an NBFC by simply submitting income-related and personal information documents. Banks can take up to seven days to process the loan request. What more? Personal loans come with no strings attached as the lender does not monitor its use.   While personal loans give easy access to credit, they can also be a recipe for financial disaster, if not managed prudently. Here are the most common mistakes you should avoid when applying for a personal loan. Reason for borrowing Ask experts and they will tell you that personal ...

Taking out a personal loan for the wrong reasons could come back to haunt you in more ways than one. When you’re strapped for cash, a personal loan seems appealing. You don’t have to put up any collateral and you can use the money for just about anything you want. Even individuals with poor credit might be approved. But like all loans, personal loans have some drawbacks as well. Interest rates are typically higher than they are on secured loans and if you fail to pay the money back on time, it could hurt your ability to take out new loans in the future. Here are five times when a personal loan just doesn’t make sense. 1. You qualify for a secured loan Secured loans require collateral, which is something the bank can seize if you fail to pay back what you owe. Your collateral is your car in an auto loan or your home in a mortgage. Personal loans have higher interest rates because they don’t require collateral. That means there’s nothing the bank can take if you fail to pay...