Most people have to make tough decisions about money. Even with a stable job and regular income, many people find themselves turning to personal loans. In fact, 34% of Americans did just that and took out a loan in 2017, alone. The high statistics revolving around loans proves that they are becoming more popular. From student loans to personal loans, it’s important to familiarize yourself with the lending world.
Today, there seems to be a loan for every situation. A popular loan that covers many situations is a personal loan. There are several types of personal loans, but more and more people are looking for personal loans for poor credit. Poor credit is something that many people deal with on a daily basis. There might be many reasons for a less-than-perfect credit score, but it all leads to difficulty in securing loans from lenders. At Bonsai Finance, we assist you in not only securing a personal loan through a reputable lender, but also help you find the perfect loan for your situation.
Types of Loans
With the many loans out there, finding the perfect one is difficult. Before you decide on a loan, your Bonsai Finance representative makes sure to explain the different loan types and recommend one that’s most suitable for your situation. With the help of your representative, you can find a pool of lenders that match your needs and receive your loans through them.
All loans fall into one of two categories. You loan could either be a fixed-rate loan or a variable interest loan. As the name sounds, a fixed-rate loan is set to remain constant through your whole term of service. Your lender keeps the rates and interest fees the same over the years, however, these rates tend to be higher than other loan types. When you look into variable interest loans, you lender has the ability to switch up the rates after a few years. These are typically offered with a line of credit. This is basically the amount you’re allowed to borrow, pending on your lender’s approval.
Generally speaking, most borrowers go with a fixed-rate loan. They’re easier to manage and they’re more predictable as far as payment goes. However, variable interest loans give you more freedom to choose the amount you want to borrow within the approved limit. Keeping these in mind, you can work with your Bonsai Finance representative to design a loan payment method that works for you.
Best Personal Loans for Poor Credit
One of the best personal loans for poor credit is an installment loan. This term is used interchangeably with personal loan. These loans are great for several reasons. As a borrower, you can probably find the best rates for both interest and base fees through this type of loan. Your lender provides predictable payments that are usually lower than other loan types. Installment loans come in two variations: secured and unsecured.
Secured loans are those that are backed up by an asset, otherwise known as collateral. This system is set up so that the lender has something to fall back on if the borrower fails to make a payment. A secure loan is usually put in place when there’s financing needed for a mortgage or auto payment. In this case, the respective asset can be seized until the borrower makes all of the payments. On the other hand, unsecured loans are those that don’t have any backup assets. This would be used to cover other personal expenses, like student tuition or hospital bills. All of these differences may sound confusing, but with the help of a Bonsai Finance expert, you can secure personal loans for poor credit from a reputable lender in no time.