What is a Personal Loan?
A personal loan is a type of installment loan that is typically offered by banks, online lenders and credit unions. Qualified applicants borrow cash and repay the loan amount with interest over a fixed period of time.
Need money? Perhaps you’d like to take the vacation of a lifetime or pay for your child’s education. Maybe you just want to consolidate your bills. Whatever your needs, we have a Personal Loan option that can meet them. Traditions Bank offers quick approvals made locally, right here, along with convenient terms and competitive rates.
Unlike other types of installment loans like mortgages and auto loans, a personal loan is not secured by collateral. For that reason, interest rates on personal loans are typically higher than on auto and home loans. But depending on your credit history, you may still get approved for a competitive interest rate.
Is a Personal Loan right for you?
Whether a personal loan is right for you depends largely on your individual circumstances. Factors such as your credit history, how you plan to use your loan’s proceeds and whether you have less expensive options available will play a part.
Debt consolidation is one of the most common reasons why people apply for a personal loan. For example, if you have a $10,000 credit card balance you’d like to pay off at a rate lower than what the issuer charges, a personal loan might save you a lot of money.
Your options aren’t limited to debt consolidation, however. In general, you can use your personal loan for anything, including making home repairs or going on vacation. To make the most of your personal loan, you’ll want to secure the lowest possible interest rate.
How can you get the best interest rate?
Because a personal loan is not secured by an asset such as your house or car, the interest rate you qualify for largely depends on your credit score and the amount you want to borrow.
Late payments and large balances on your credit cards can hurt your credit score. To qualify for the lowest possible rate, make a habit of paying your bills on time, every time. If you want to use loan proceeds for something other than debt consolidation, you’ll want to pay any credit card statement balances in full whenever possible.
Are there other types of Personal Loans?
Yes! There are several loan options that offer similar benefits to a personal loan, including:
- Credit cards: A credit card is a revolving loan instead of an installment loan. That means you can choose to make the minimum payment and roll the balance over indefinitely. There is no end date on a credit card balance, which is why credit card debt is often the most expensive type.
- Home loans: Home equity loans and lines of credit may be an option worth considering, depending on how much you need to borrow and what you plan to use the money for. Traditions Bank can help you evaluate your best option.
- Auto loans: If you’re in the market for a new car you may find an auto loan more affordable. Talk with us to discuss your best move.
Contact Traditions Bank today
If you’re considering applying for a personal loan and have questions, call Traditions Bank. Our Associates can help you choose the loan that’s right for your financial future.
Contact a member of our Personal Banking Team to start your application for a Personal Loan today!