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When Are Personal Loans a Good Idea

A personal loan can be used for just about anything. Some lenders may ask what you plan to do with the money, while others will just want to be certain that you have the ability to pay it back. A personal loan isn't inexpensive, but it can be a viable option in a variety of circumstances. Here's how to decide if one is right for you.

How Personal Loans Work
A personal loan is typically an unsecured loan, which means that the lender does not require collateral—a home or a car, for example—to borrow money. However, with unsecured loans, the lender is taking a greater risk and will most likely charge a higher interest rate compared to a secured loan. Just how high your rate will be can depend on a number of factors, including your credit score and debt-to-income ratio.

Some banks offer secured personal loans, and the collateral can be your bank account, car, or other property. A secured personal loan may be easier to qualify for and carry a somewhat lower interest rate than an unsecured one. As with any other secured loan, you may lose your collateral if you are unable to keep up with the payments

How Personal Loans Work
A personal loan is typically an unsecured loan, which means that the lender does not require collateral—a home or a car, for example—to borrow money. However, with unsecured loans, the lender is taking a greater risk and will most likely charge a higher interest rate compared to a secured loan. Just how high your rate will be can depend on a number of factors, including your credit score and debt-to-income ratio.
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Some banks offer secured personal loans, and the collateral can be your bank account, car, or other property. A secured personal loan may be easier to qualify for and carry a somewhat lower interest rate than an unsecured one. As with any other secured loan, you may lose your collateral if you are unable to keep up with the payments

How Personal Loans Work
A personal loan is typically an unsecured loan, which means that the lender does not require collateral—a home or a car, for example—to borrow money. However, with unsecured loans, the lender is taking a greater risk and will most likely charge a higher interest rate compared to a secured loan. Just how high your rate will be can depend on a number of factors, including your credit score and debt-to-income ratio.

Some banks offer secured personal loans, and the collateral can be your bank account, car, or other property. A secured personal loan may be easier to qualify for and carry a somewhat lower interest rate than an unsecured one. As with any other secured loan, you may lose your collateral if you are unable to keep up with the payments

How Personal Loans Work
A personal loan is typically an unsecured loan, which means that the lender does not require collateral—a home or a car, for example—to borrow money. However, with unsecured loans, the lender is taking a greater risk and will most likely charge a higher interest rate compared to a secured loan. Just how high your rate will be can depend on a number of factors, including your credit score and debt-to-income ratio.

Some banks offer secured personal loans, and the collateral can be your bank account, car, or other property. A secured personal loan may be easier to qualify for and carry a somewhat lower interest rate than an unsecured one. As with any other secured loan, you may lose your collateral if you are unable to keep up with the payments
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