Definition and Information
About Personal Loans
Personal Loans are generally known as unsecured loans because they are issued and supported by person's credit history and ability to pay it back rather than by collateral. Thus, Personal Loans that are not secured by property collateral are called Unsecured Personal Loans. These types of Loans are obtained for various purposes. Among the most common ones are debt consolidations, vehicle purchases, vacation trips, home or medical bills. Usually, Borrowers with good credit history and debt to income ratio may qualify for personal loans. However, there are lenders who offer financing options to those who have lower credit scores due to a new credit history or certain outstanding balances.
Annual Percentage Rate and Terms
The annual percentage rate or the interest rate for a whole year varies. The APR range for personal loans may be from 4.99% to 35.99% depending on lenders as well as personal financial standings. Some lenders consider borrowers with solid financial standings and good credit history as their primary target market, offering personal loans with lower interest rates. Others provide higher risk Personal Loans with higher annual percentage rate. Regardless of any financial risks, lenders offer Personal Loans with fixed APR and terms. The Personal Loan terms are usually 2-5 years. The amount may also vary from $5000 to $100000.
Personal Loan in Other States