What Are the Different Types of Personal Loans That Exist Today?

According to a recent report, almost one-fourth of American adults have personal loans that they’re paying back right now. People use personal loans to pay for everything from medical bills to home repairs.

If you think that you could benefit from taking out a personal loan, you’ll need to begin by learning about the different types of personal loans that exist. It’ll help you choose which fast personal loan you want to apply for.

Today, we’re going to take a look at the various types of personal loans that are out there so that you know which one would work best for you. If you’re in need of emergency funds, continue reading to learn all about them.

Unsecured Personal Loans

Of all the different types of personal loans on this list, this one is probably the most common. Most of the people who need to take out unsecured personal loans will attempt to get unsecured personal loans if they can.

With unsecured personal loans, you won’t have to worry about putting up any loan collateral to take one out. Instead, you can rely on your strong credit score to show that you’re trustworthy enough to take out a personal loan.

This will, of course, require you to have a good credit score in the first place. Without one, you’re going to have some trouble taking out this type of personal loan. You’ll also need to be able to prove that you’re bringing in enough income to pay back an unsecured personal loan.

But as long as you’re able to meet these basic requirements, you should be able to get your hands on an unsecured personal loan. You can then use it for almost anything that you want.

Secured Personal Loans

While unsecured personal loans are the ideal option for most people, there are some who aren’t going to qualify for them. They won’t have a high enough credit score to take out an unsecured personal loan, or they won’t make enough money to get approved for one.

In this case, you might want to think about going with an unsecured personal loan instead. This type of personal loan will get you the emergency cash that you need, but it will also call for you to put up something as loan collateral.

You can use something like a car or house as collateral for a secured personal loan. Your collateral will make a lender feel more comfortable with the idea of lending you money in spite of your low credit score and/or income.

Variable-Rate Personal Loans

Most of the types of personal loans that people take out are fixed-rate personal loans. As their name would suggest, they have interest rates on them that are fixed so that they won’t change.

But there are also variable-rate personal loans that you can take out if you would like. These personal loans will have interest rates that will fluctuate over time.

In some instances, this might work out well for you if your variable rate goes down. But it could also backfire if it shoots way up. It’s why you’ll want to give some serious thought as to whether this type of personal loan will be right for you.

Co-Signed Personal Loans

If you don’t have enough credit history to your name at this time, you might not be able to convince a personal loan lender to give you the loan that you need. They won’t trust that you’ll be able to pay a personal loan back to them in a reasonable amount of time.

In this instance, you may have to look into taking out what is called a co-signed personal loan. It’s a kind of personal loan that will require someone with a good credit score to co-sign your loan for you.

Just make sure that you’re 100% prepared to pay back a co-signed personal loan. Because if you don’t, the person who co-signed it for you will be on the hook for it.

Hard Money Personal Loans

Are you looking for a short-term personal loan that you can use for the purpose of buying real estate? If you are, the other types of personal loans listed here might not do you much good.

Rather than looking into taking out one of them, you’ll want to try to take out a hard money personal loan from a reputable lender like DFW Hard Money. You can use other real estate that you own to secure this type of personal loan.

Payday Personal Loans

Most experts will advise you to stay far away from payday personal loans if at all possible. They tend to come with extremely high interest rates that make it a huge challenge to pay them back.

But if money management has become a big problem for you and you don’t have any other choice, you might be able to track down these types of personal loans and qualify for one. Just do your best to search for a payday personal loan with a relatively low interest rate on it.

You should also investigate some of the other types of personal loans that we’ve talked about before jumping into taking out a payday loan.

Which of These Types of Personal Loans Would Be Best for You?

As you’ve seen here, there is no shortage of types of personal loans. As a result, there is guaranteed to be at least one type of personal loan that would work well for you.

Consider each of the personal loan options that we’ve presented and decide which type you would like to apply for. Then, search for a lender that you know you can trust to provide you with the best possible interest rate on a personal loan.

Would you like to learn more about other types of loans? Get more information on them in our other blog articles.

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