A personal loan may seem like the best option if you recently came to a lot of debt such as medical bills or a wedding expense. Personal loans serve as a method to get you the money you need. However, before you sign on the dotted line that you are ready to take the cash, it is vital to know some important aspects of a personal loan. With the average credit score in Arizona being 691, which is 1% lower than the national average score of 696, there are many personal loan options for people living in Phoenix. Let us consider the different aspects of a personal loan and how you can qualify for one.

Secure of Non-Secured

Is the personal loan secured or non-secured? This is vital to the process of repaying your personal loan. Non-secured personal loans mean they are not backed by any personal assets in the case that you cannot pay your monthly installment. A house or car for example, is backed by a personal loan that is secured, which means, the lender can take back that particular item as collateral if you default on the loan. Either way, defaulting on payment will affect your credit score.

Qualifying and Picking the Best Personal Loan Lender

1. Know the Lender

Researching information is a vital aspect of figuring out the easiest place to get a loan for you. With that, always read the reviews, make sure they are reputable, and find lenders that will work alongside your financial situation.

2. Know the Interest and Fees

When qualifying for a personal loan, it is important to always read the fine print, ask questions, and know the interest rate and fees on that personal loan. The interest rate will be directly impacted on your credit score and length of the loan. With that said, origination fees and late fees are all parts of a personal loan you should study beforehand.

3. Feel Out the Lender

Meeting with a lender in person helps you identify which financial institution or personal loan lender is best suited for you. Asking questions, meeting in person, and knowing the branch is a key component of picking out the best personal loan lender.

 

Are Payday and Title Loans the Same as Personal Loans?

No not really. A payday loan, or cash advance, is easier to get and has a shorter term(unless it’s a longer installment option) but higher fees and much higher interest than personal loans. The same is true for title loans with the addition of your car being used as collateral. Be very cautious with these types of loans.