The world of loans is like speaking a different language at times, and if you are not fluent it can be very difficult to find the right ones to fit your needs and lifestyle. For every stage in life there is a loan. If you need money for your education, there are loans for that. If you are buying a car, there are loans for that. If you are buying a home, there are loans for that. And within all those categories there are different types that you have to wade through to pick the right type for your specific needs. Personal loans are not any different. There are three options to choose from peer-to-peer loans, personal installment loans and bank personal loans.
Peer-to-peer
In a Peer-to-peer loan you are not borrowing directly from a bank. The bank is playing the middle man. You will fill out an application like any other loan, stating what you are looking for, and submit it to the bank. The bank will to connect you to investors which will be the ones loaning you money. You will never have to meet the investor as the whole process will take place online. A perk to doing a peer-to-peer loan is that you can get a lower interest rate, as each investor will be different. The requirements to qualify for this type of personal loan is to have a credit score of 600 or above, and you will have to prove that you make at least $2,000 a month.
Personal Installment Loan
A Personal Installment loan is like a Peer-to-peer in that there is a quick online application that you will fill out in order to start the process. The lender will then write up and agreement based off your personal information that you will have to agree to before the money will be released into your account. One thing you will have to investigate is your states laws when it comes to Personal Installment Loans, each state has its own set of laws that must be followed. This can also affect the length of your loan and APR, along with your credit score and loan history. The Credit Score requirement is slightly lower and 580+, but you will still have to prove to your income is at least $2000 monthly.
Bank Personal Loan
A Bank Personal Loan is the typically type of loan we all think of. You will go into your personal bank and talk to a representative there; they will have you fill out the application. The rates for a Bank Personal Loan are normally fixed, but the term can be flexible. This type of loan seems to be quicker than the other two, if you are approved you can get the money the same day! Like the Personal Installment Loan, you must have a credit score of at least 580 and have a monthly income for at least $2000.