Digital News Report – Personal loans have become very popular during this recession. Americans are turning more and more to these loans as credit card companies tighten their balance sheets.
While the amount of revolving credit is declining, the amount of non-revolving personal credit is on the rise, according to data provided by the Federal Reserve. The amount of money available for credit card loans declined 12% in September while the amount available for personal loans has increased by 7.95%.
It was the second straight month of increases. People are taking out more personal loans.
There are two types of personal loans: secured and unsecured. Banks will usually offer lower rates if the loan is secured by a vehicle, appliance or other valuable. There is usually less paperwork associated with a personal loan compared to a mortgage.
Mutual of Omaha has personal loans starting at 5.7%. The Nebraska based bank offers a wide selection of loans including new and used car loans and personal lines of credit.
U.S. Bank has personal loan rates starting at 5.28%.
Union Bank has rates starting at 17.75% for unsecured personal loans. Some customers may want to use their car as collateral, basically refinancing or talking a loan out on their vehicle.
The rate will depend on credit score and use of the loan. Personal loans can be used for purchases or to cover unexpected emergencies. These types of loans are typically much cheaper than payday loans and can be paid-off over a longer term.
By: Tina Brown