Do Banks Give Personal Loans?
Many banks, both “global reach” institutions and regional (or even mom-and-pop) branches, offer solid personal loans for consumers. But before contracting with your bank of choice, be aware of both the cost limitations associated with personal loans and alternative sources of funding. Your bank will typically charge you a processing fee as well as an APR to cover the costs of the loan.
If you don’t have reliable credit or income verification paperwork, you’ll need to pay for insurance protection. Beware that not all insurance arrangements will cover you for every contingency. You should understand the fine-print associated with personal loans before you sign.
Your bank may also charge what’s known as a prepayment penalty if you retire the loan before it becomes due. For small personal loans, this prepayment penalty may be negligible, on the order of $5 to $10. However, if you are taking out personal loans on the order of $5,000 or more, your prepayment penalty can become quite significant. It’s up to you and your accountant to do the calculations. Which is a bigger financial “hit” — the prepayment penalties or the additional interest you’ll accrue if you pay off the loan according to terms?
While accruing personal loans through FDIC insured banks is a safe way to execute financial transactions, you can save more and get special terms if you opt for less well established financing. For instance, if you work with an online bank or a local payday loan company, you can get faster approval with less paperwork. You might also be able to skip the hassle of repairing your credit and bypass the frustrations of trying to extend your credit card limit.
That said, if you search for personal loans “off the beaten path,” you can get into business with less than fully vetted firms and end up getting stung by exotic interest rate charges. Moreover, if a third party buys your loan from your original lender, your payment terms and obligations may change. So if you are going to choose a non-bank, non-credit union lending option, aim for something stable, so you can plan your future with a degree of certainty.
Still confused about Personal Loans or need some help deciding on your cash advance options? Then let the experts at The Andres Financial Group help you. Our network of highly trained professionals that have over 30 years of combined experience in the buyout of future payment streams can you get you the money you need now. Contact us Today!
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