Personal Loans a Better Option Than Ever Before
There is no doubt that some of the financial tools that was affected the most by the economic crisis of a few years ago were car, home and personal loans. Thankfully though, all of these types of loans have made quite a comeback and have become very popular once again among U.S. citizens, who are finding out how useful loans – and personal loans in particular – can be when trying to recover from the crisis. This of course has seen the number of applicants for personal loans increase with time.
Besides being an excellent resource to find a way out of the economic crisis, an increasing number of people are also considering personal loans as an essential tool to achieve a diverse set of objectives. As an example, a personal loan is a great way to face a big investment like a wedding, a home repair, a travel plans and so on. Likewise, for those looking for a way to fix their credit history, personal loans are an excellent way to pay all debt and regain control of their finances in a relatively short period of time.
In fact, it is just this very reason – customers willing to regain control of their finances – the reason that has become the most popular among current personal loan holder to get their personal loans in the first place. This very ability to be able to pay all of their outstanding debt gives personal loan holders a much-needed dose of hope, especially if in the past they had severe financial problems.
As you might guess of course, this increase in applications for personal loans have been extremely welcome news for banks and any other types of lenders, who have seen their business increase quite dramatically. This is particularly good news for them, since in the past few years after the economic crisis all these financial entities saw loan acquisitions fall sharply. Now on the other hand, personal loans have increased around 4.5% since the first quarter of 2011 according to credit bureau Equifax. Of course, banks and lenders have noticed this increase and they are not waiting idly for customers to come to them. Instead, they are dramatically increasing their marketing efforts in order to gain as many customers as possible.
There is another reason for the renewed interest from customers in personal loans, and that is the falling value of homes and other properties, as well as the increasingly rigorous standards for approving home loans> This has made home loans a far less common financing option for potential home buyers, making them turn to other types of options such as personal loans.
As with any other type of loan of course, there is always a risk involved in acquiring a personal loan mainly due to the possibility that the loan holder might be tempted acquire more personal loans than he can handle. Seen this way, personal loans can become just as dangerous as mismanaged credit cards if used irresponsibly. Is is with this in mind that personal credit customers should consider closing all pending debts right after acquiring a personal loan.
Not everything is negative of course, and in fact the most attractive aspect of personal loans is that interest rates for them tend to be relatively low when compared to the rates charged for other similar loans. Even better, when compared to the exorbitant rates charged by credit cards, the interest rate that most consumers will pay for a personal loan is very reasonable.
Add to that that nowadays banks and lenders in general are trying very hard to bring in customers and in some cases they end up offering excellent deals and offers for acquiring personal loans. Among the most common one are lower interest rates and even longer payment terms than usual. Also, banks tend to reward customers that agree to have their periodic payments automatically deducted from their bank accounts, giving them even lower rates than usual.
Before we finish, here is some advice to consider for anyone thinking about acquiring a personal loan: If it is possible for you to get rid of your debt both faster and cheaper, then go for it. Otherwise, avoid personal or any kind of loans.