Best Personal Loans 2018

A personal loan (often called a signature or installment loan) is an unsecured loan with a fixed interest rate (in most cases) and a fixed repayment term. Personal loans are usually offered by banks, credit unions, and online lenders. Personal loans are short-term loans with an average time to pay back the loan between 2 to 5 years, with some lenders offering up to 7 years. If you are looking for a longer term to repay the loan, there are loan options available for that too!

Usually, personal loans are unsecured, which means you don't have to use any collateral, such as a car or home, to secure the loan. Some lenders who offer unsecured loans, may also offer secured loans or even allow you to add a co-signer to get approved for the loan. Typically, securing the loan with collateral or adding a co-signer are offered to consumers who do not qualify for a signature loan.

The interest rates and terms offered on personal loans vary based on the lender and the interest rate you may receive will depend on what you qualify for. In today's market, the Annual Percentage Rates (APR) for a signature loan often ranged anywhere from 6% up to 36%, although rates may be higher for some. The interest rate is based on your credit score and income. So, the higher the credit score, the lower the interest rate. No matter what the interest rate is though, a personal loan may still make sense. It all depends on what you are trying to do. For example, if you are trying to lower your existing interest rates on your unsecured debt or just looking to get out of debt faster, taking a personal loan even at a slightly higher rate may help improve your credit, lower your monthly payments, save on interest in the long run and even help you get out of debt faster.

Here are some important things you should consider when choosing a personal loan:

1. Interest Rates Naturally, you will want to take out a loan offer at the lowest interest rate. Just make sure you choose a loan that has a fixed rate. That way, you will never have to worry about your rate change.
2. Total Cost Remember to compare all of the costs associated with the loan. You might be surprised at what you find out. Aside from the interest rate some lenders may have additional fees to take out a personal loan. A good example would be an origination or application fee. Some lenders may require insurance, which is usually unnecessary and costly, prepayment fees (for paying off the loan earlier) and fees for using their services. While these fees are usually included in the amount financed over the term of the loan and are deducted from the amount you receive, they do increase the overall cost of the loan.
3. Personal Loan Uses A Personal loan can be used for many different reasons. We've listed the most common reasons below:
   - Vacation or Travel Expenses
   - Lowering the Interest on existing debt
   - Consolidating (unsecured) debt into one monthly payment
   - Baby Adoption
   - Medical or Dental Procedures and Expenses
   - Paying for private school education costs
   - Home Improvement or buying furniture and appliances
   - Wedding Expenses
   - Purchasing or Refinancing a car
   - Making a large purchase or investment
   - Starting a new business
   - Building or Establishing Credit
   - Unexpected Expenses
   
4. Beware of Potential Scams We're sure you've heard the saying, "if something sounds too good to be true, it usually is," so always keep that in the back of your mind when shopping around for new credit and make sure you are dealing with a reputable lender. Try to avoid personal loans that require upfront payments - such offers are usually a scam.

Personal loans are good when you need to consolidate expensive debts. You can consolidate almost any type of debt, such as credit cards, medical bills, credit balances that have high interest rates and in some instances, even student loans debt. Personal loans usually offer better interest rates than credit cards and they have a fixed repayment term. So, if you cannot get a credit card that has a 0% intro APR, considering a personal loan may be the next best option.

Also, when you need money fast, getting a loan is a great option. When it takes weeks to receive a credit card, take out a home equity loan or refinance your existing mortgage, the funds from a signature loan is usually available within a few days after approval - often times, the money can be directly deposited into your account. Some lenders may even allow you to request a specific amount, so you won't accrue unnecessary debt or get charge for any additional interest.

Improving your credit is another great reason a personal loan can be a good option. Not only does an installment loan create a varied mix of credit accounts on your credit report, when you make your payments on time, it helps improve your payment history and credit score too! So, remember, always make your payments on time - that's what matters most.