More on Personal Loans

There are two types of personal bank loans: unsecured and secured. Secured bank loans use collateral in order to help you receive lower fees, better repayment terms and a more beneficial interest rate. An unsecured loan is issued without collateral and at a much higher interest rate. The caliber of your financial situation will most likely determine which loan you will receive.

When applying for a personal loan:

  • Check your credit score and report.

    If you see any discrepancies on your report, fix them before applying for any type of bank loans.

  • Shop around.

    Before you apply, shop around for the best possible interest rate and make sure you're getting the best deal possible for your individual needs.

  • Look for hidden fees.

    The best way to do this is ask your loan officer lots of questions. Find out what the total cost of the loan is and its associated fees. If you can't understand why a certain fee is being charged, ask why it's there.

  • Know your repayment terms.

    Before accepting a bank loan, know if your monthly payment is fixed or variable; you want it to be fixed. Make sure you ask about upfront fees and whether the loan is disbursed all at once or in installments.

  • Offer collateral.

    Offering collateral could help you get a lower interest rate on your personal bank loan and in turn save you a great deal of money.

  • Repay your loan according to the terms of the agreement.

    If you don't pay back your loan as outlined in your agreement with the bank, you could risk losing your good credit standing or the collateral you offered to get a secured bank loan.