Equifax Explains Personal Loans

December 15, 2014

personal loan applicationPersonal loans can be a quick and easy way to acquire emergency funds needed for thing such as home repairs, making a large purchase or paying a bill with high interest. Taking out a personal loan is often a quicker alternative than taking out a home equity loan, and sometimes it is the only alternative for those who are renting or do not have enough equity in their home.

Before you take out a private loan, the experts at the Equifax Finance Blog outline a few things you need to know in a recent article titled “

What You Need to Know Before Taking Out a Personal Loan.”

Personal loans, which are also known as unsecured debt, are based on your credit score and history. They are not backed by any form of collateral, so they can often have higher interest rates than secured loans, especially if you have less than perfect credit.

Unlike credit cards, loans have a fixed repayment term, meaning you only have a limited amount of time to repay them. Be sure that you will be able to afford the payments and pay back the loan in the time allotted. Also, make sure your loan has a fixed-rate agreement, meaning the interest rate and repayment terms won’t change.

If you are considering taking out a personal loan, be sure to read the full article on the Equifax Finance Blog to learn how your credit score determines the affordability of loan and the risks involved with a personal loan. On the Equifax Finance Blog, you will also find answers to a variety of other personal finance and credit questions.

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