How is a personal loan different from other credit?
When consolidating debt, learning about taking on an unsecured personal loan can be a lot of information to take in. Today, we want to focus on the differences personal loans have versus other credit. Here are a few differentiating factors that a personal loan carries:
- No collateral – which means you don’t have to borrow against any existing assets. If you default on the loan, legal action may take place, but it’s not like a HELOC where you borrow against your equity in your house.
- Possibly higher rates – depending on your credit score, some interest rates from your personal loan lender could be higher than some credit cards. However, when consolidating debt, a counterbalance to this is that you don’t have to worry about varying interest rates on all of your different credit cards. Instead, you’d have one predictable payment on a regular schedule.
- No revolving credit lines – Getting out of debt is hard enough. Getting a personal loan that doesn’t have any revolving credit lines can potentially help debt from increasing more and more. With credit cards, it’s easy to pay the monthly minimum and keep spending, but that debt keeps revolving – and growing. With a personal loan, there are no revolving credit lines.
- Fixed payback schedule – Paying on time is an essential part of being financially responsible. In fact, if you don’t, it will negatively affect your credit score. One of the benefits of a personal loan, is that there is often a fixed payback schedule – meaning – you pay a certain amount on a certain day within each month, or on defined intervals and you don’t have to worry about whether or not your payments will be prolonged over a period of time. When you take out a personal loan, you know your payoff schedule. Stick it out and pay back with ease!
- Options to make automated payments – If you don’t feel like writing a check, or making a manual payment deposit, some lenders offer automated payments, which can be extremely helpful for the busy individual. If the lender offers automatic payments, you don’t have to worry about missing a payment and getting a ding on your credit report. It’s a win-win!
By taking out one of our personal loans, you can make affordable monthly payments and build your credit story by making on-time payments each month. As you continue to make your payments on-time, you build your credibility and your credit history.
We offer decisions in minutes and funding as soon as the next business day to help make your debt – conquering dreams a reality. There is no time like the present to start your debt – conquering mission.
At LendingPoint we offer affordable personal loans from $3,500 to $25,000 with a fixed APR and simple interest.
We would love to help finance your debt consolidation mission. Apply today and talk with one of our representatives about making your plan a reality.