Whether you’re looking for ways to finance a large purchase for your home, like a new major appliance or entertainment device, or to cover a luxurious experience, like a big vacation, you may immediately think of credit cards. Many “big box” stores even have their own credit cards that they offer so you can finance the purchase right at the moment. Credit cards also usually come with a high interest rate, however, so they are often not the greatest tool for covering these large purchases. But what’s the alternative? If it were a car, you could get a car loan, but what about other investments? There used to be very few options to fit this need, but these days many banking institutions and even other types of businesses offer personal loans. Read on to learn more.
What Are Personal Loans
Personal loans are a way of borrowing money for any reason you like, without necessarily having traditional collateral (like the home or the car that the loan is for). They can be secured or unsecured, and they can have varying rates and amounts. An unsecured personal loan is a good option for individuals who don’t have collateral but want to make a big purchase or pay off debt.
Who Offers Them
While some banking institutions do offer personal loans nowadays, they are much more common in technology start-ups that focus specifically on this type of investing. SoFi is probably the most recognizable of the brands.
How Do They Work
These loans often have no collateral, so you are granted the loan based on creditworthiness (like a credit card). Once you’re approved and sign for the loan, you are given the money as a lump sum, and then you have a designated time to pay it back. In most cases, you have a period of time to pay it and a fixed interest rate assessed each month.
What Are The Costs
The costs of your personal loans are determined by personal things, like your credit score. A better credit score will result in lower interest rates and in you paying less over the life of your loan. A loan that you pay back in a shorter period will also cost you less in the long run, because you pay interest every month or year that you take paying the loan off. Finally, different companies may have different fees for the origination of the loan, that fall to you to pay (many companies have gotten rid of these for personal loans).
Pure Finance Group Is Here to Help!
Thank you for your interest in Pure Finance Group. We’re so excited you’re here. For more information on how our lending services can help you with your home financing needs, give us a call (410-401-4957) or fill out the form on our contact page today. If you have a question about any lending services we provide including home improvement loans, we are here to help answer all your questions. Just give us a call (410-401-4957) or contact us today. To keep up-to-date with the latest financing tips and solutions, keep in touch with us on Facebook and LinkedIn.