Cheap Secured Personal Loan – 3 Frequently Asked Questions
A personal loan is a godsend for anyone who is in need of quick cash
. The great thing about taking out this type of loan is that there is no need to tell the lender how or why you will be using the cash. In fact, you could be planning to use it to just get caught up on some outstanding bills. Or, maybe you need it for a vacation or to add a room to your home.
In terms of personal loans, there are both secured and unsecured types. A secured loan requires the borrower to put up some type of collateral against the loan. This could be in the form of the title to a already-paid-off automobile. It could be against a certificate of deposit (CD) or savings account. Or, it could even be a future paycheck (this is sometimes called a payday loan).
If you are looking for a cheap secured personal loan, here are answers to 3 frequently asked questions that can help you get the loan you need:
1. What is the advantage of taking out a secured personal loan?
When you take out this type of loan, the collateral that you offer to your lender allows that lender to take much less risk in extending you the loan than they would otherwise. They in turn reward you for this lower risk profile by offering you the loan at a lower interest rate than if you were to take out an unsecured loan. Also, there is often no prepayment penalty for unsecured personal loans so you can pay it off early without facing additional fees.
2. How can I ensure I get the cheapest-possible loan?
The interest rate you pay on your loan is influenced by a number of factors, including your FICO (credit) score, the amount to be borrowed, the repayment period, and the type of collateral you are putting up for the loan. Of course, each lender also has their own criteria for evaluating borrowers' credit-worthiness.
Since your choice of lender plays a role in the rate you will be offered, it only stands to reason that the more lenders you apply to, the better your chances for landing a cheap loan. You should apply to at least 5 lenders. And, make sure you do NOT accept your first offer, no matter how good it is. Apply to all 5, then take the best offer.
3. Will applying to multiple lenders hurt my credit score?
Fortunately, your credit score will not be affected - even if you apply to multiple lenders. As long as you apply to all of the lenders during a relatively short period of time (say within a week or so), there should be no negative effect to your score.
Follow these 3 tips for finding a cheap secured personal loan and getting it funded quickly.
Cheap Secured Personal Loan 3 Frequently Asked Questions
By: Everett Machlachan
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