How to apply for a personal loan
If you want to apply for a personal loan, it is worth doing well.
When it comes to personal loans, finding the right product is only half the battle. Whenever you apply for a personal loan, it is recorded in your credit file and several requests can give your lenders an irresponsible look. Therefore, it is important to understand the application process and what you need to do to have the best chance of being approved.
There are different types of personal loans available. Each loan has specific eligibility conditions and documents that you must submit as part of your application.
Use our guide to find out how to apply for a personal loan today.
Types of personal loans.
Most personal loans can cover a wide range of objectives, from buying a car to consolidating debt or paying vacations. Below is a general description of the popular personal loans available today and their usefulness:
Guaranteed personal loan. This type of loan is usually used to finance a car or other important asset, such as a boat or a caravan. This implies that you are committing assets in case of default on your loan, in which case the lender can take possession of the asset. The advantage of a secured loan is that it will generally have a lower interest rate because it is less risky for the lender.
Personal loan without guarantee. An unsecured personal loan is the case in which a bank or lender agrees to lend you unsecured money. The loan amount can be used to finance any type of purchase, to pay vacations or even to consolidate existing debts.
Auto Loan As the name implies, this type of loan is specifically designed to finance the purchase of a car. These loans are a form of secured loan where the automobile is usually used as collateral against the loan. Car loans are sometimes limited to new cars because it guarantees that safety is a valuable asset, but some loans can also allow you to use a used car.
Payday loan. These loans are for small amounts, usually between $ 100 and $ 2,000, and are designed to cover it until the next payday. Refunds are generally aligned with your payroll.
As a general rule, you will have to repay the entire loan in a short period of time, usually between 16 and 60 days.
Types of personal loans
Most personal loans can cover a wide range of purposes, from buying a car to debt consolidation or paying vacation. The following is a general description of the popular personal loans currently available and their usefulness:
Guaranteed personal loan. This type of loan is usually used to finance a car or other important asset, such as a boat or caravan. This implies that you will pledge assets in the event of a default on your loan, in which case the lender may take possession of the asset. The advantage of a secured loan is that it will generally have a lower interest rate because it presents less risk to the lender.
Personal loan without guarantee. An unsecured personal loan is the case in which a bank or lender agrees to lend you unsecured money. The loan amount can be used to finance any type of purchase, pay vacation or even consolidate existing debts.
Car loan As its name suggests, this type of loan is specifically designed to finance the purchase of a car. These loans are a form of secured loan, the automobile being generally used as collateral against the loan. Auto loans are sometimes limited to new cars because it ensures that security is a valuable asset, but some loans can also allow you to use a used car.
Payday loan. These loans are for small amounts, usually between $ 100 and $ 2,000, and are designed to cover them until the next payday. Refunds are usually aligned with your payroll. As a general rule, you will have to repay the entire loan over a short period of time, usually between 16 and 60 days.