Advantages of Personal Loans

June 20, 2009
When unexpected expenses appear out of nowhere, it’s good to know the advantages of personal loans and how they can help cushion the financial blow.

If you are looking to for personal loans, chances are you have no established credit history or you may have a less than perfect credit report. By taking out unsecured personal loans and repaying them in a timely manner, you can establish a positive credit history and a good record of on-time payments. Additionally, unsecured personal loans don't require collateral. In the unlikely event that you were to default on the loan, you wouldn't be at risk of losing personal property. Finally, you can generally expect faster approval times with unsecured personal loans; in fact, is known for its speedy approval times. Often your loan can be approved in less than two minutes!

There are two types of personal loans available to consumers- secured and unsecured. If you are considering taking out a personal loan, it’s important for you to know the differences so that you can make a smart, informed decision.

Secured Personal Loans

With secured personal loans you generally have lower monthly payments, lower interest rates, and a longer repayment period than with unsecured personal loans. The key factor of secured personal loans is collateral. You will need to pledge assets such as your vehicle or home which reduce the lender's risk substantially. Additionally, secured personal loans normally demand a good credit history.

Unsecured Personal Loans

As you may have guessed, unsecured personal loans require no collateral. Since the lender would have nothing to repossess if the loan went into default, unsecured personal loans generally come with much higher interest rates. Repayment periods can also vary- this helps the lender minimize the risks of giving an unsecured loan. For people who are not in a position to offer collateral, an unsecured personal loan from can be a great alternative.

The amount of money you can borrow with an unsecured personal loan is normally between $500 and $25,000. However, most lenders tend to keep to the lower end of the spectrum, as the risk and potential legal headaches from a default may make lenders wary of approving loans for large amounts of money. It's absolutely true that personal loans are much more easily obtained with collateral than without it. There are, however, advantages to taking out unsecured personal loans.

Whether you have suddenly experienced an emergency car repair or medical bill or unexpected school expense, is standing by with personal loans that fit your unique situation.