Personal loans are easy to work with: Much simpler than credit cards, as once they are repaid your debt is cleared. With credit cards you always need to be on your guard in case you are racking up new debts.
However, personal loans in the online lending industry do carry caveats. Not all online lenders are trustworthy and there have been some high profile cases of predatory lending.
Note that Green touch does not take any credit decisions or make loans. We pitch your loan to many lenders and the one which is most interested in your profile will contact you.
Identifying top personal loan companies
Credit cards tend to be complex to handle, affect your credit rating and tend to promote a cycle of debt. Personal loans, on the other hand, carry a fixed interest rate and a repayment schedule designed to get the debt repaid in a fixed time period. These kinds of loans are less confusing for unsophisticated borrowers.
Advantages of personal loans
- You receive the loan into your bank account which is useful if you are dealing with suppliers who don’r accept cards.
- Applications take less time than they do with banks. They also won’t affect your credit rating.
- A personal loan can be used in addition to a credit card.
- Personal loans tend to be smaller and for shorter periods. They may however carry a higher interest rate than credit cards.
- Personal loans can make your credit score higher. if you use them to repay other loans with banks.
- Prepaying your personal loan is not a negative. There are no extra charges.
- People with lower credit scores, are welcome with these kinds of lenders.
If you are a member of a credit union consider a loan from them because they offer good rates to their members. Unfortunately, if you don’t already have an account this may not be an option if you are in a hurry.
The online lending space is populated with a plethora of lenders all working hard to outdo each other to reduce your interest rates, fees and lending lead time. Some prefer poor credit borrowers and others offer more repayment flexibility.
Bank lending, whilst competitive on rates tends to be the least flexible, requiring rigid repayment plans and strict lending criteria. Banks are often not interested in making small loans because the cost of setting up the loan may exceed the benefits for them.
Avoiding debt traps
- Avoid the debt cycle. Always consider the interest if you are taking on a high-interest loan. Never let a high interest loan roll into the second month.
- If you are considering a payday loan, make sure this kind of lending is legal in your state to avoid illegal lenders.
- Always read the loan contract and make sure you understand the interest rate, repayment term and especially what rights you are granting the lender to take money from your bank account. Always ask if you are unsure.
- Avoid co-signing loans – With these kinds of loans you can become responsible for your partner’s debt.
The providers of personal loans offer a service not available at banks. They offer speed, small loan amounts, and flexibility but are not a low-cost option. If you can accept rigidity and sluggishness or require a larger loan, then a bank will be a cheaper option.
Home Page – Green-Touch