Digital News Report – There are two basic types of personal loans. Secured personal loans require collateral while unsecured loans do not require security. The security may include a car, boat or other valuable. In some instances customers may secure the loan with a home.
Some banks offer unsecured personal loans for customers with a bad credit history. Secured personal loans usually have a lower interest rate but typically don’t require as much paperwork.
The interest rate for a personal loan is much lower than a payday loan. Plus, the terms are longer. Borrowers can usually pay off a loan within 72 months. Typically, personal loan terms are 48 or 60 months but can be as low as 12 months.
SunTrust has unsecured personal loans starting at 3.99%. The top rate for the loan is 12.99%.
Interest rates may depend on several factors including the credit score of the borrower, the loan amount and the use of the loan. For instance, the bank may charge more interest for an old car than a new one.
Citibank has rates ranging from 10.49% through 25.49%. Bank of America has rates starting at 3.09% and U.S. Bank has rates starting at 5.28%.
Personal loans may be needed for unexpected emergencies. Some banks offer special protection for these events. For instance, Hancock bank offers a “payment keeper” program to “protect your family from the unexpected”. Protection like this could save your credit history.
By: Tina Brown