What Terms Do I Look for in a Personal Loan?

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An Introduction to a Personal Loan Agreement

Whatever your financial needs, getting the best personal loans can help you reach your goals. They can be a great way to help you get ahead or get back on track after unexpected expenses. It is important to know, however, that there are certain terms to look out for when trying to secure a personal loan and also certain things to avoid.

It can be difficult to know where to start. At Liberty Lending Group, we are specialized in helping meet your lending needs. That is why we have compiled the basic terms to look for when trying to secure a personal loan, as well as an overview.

What is a Personal Loan?

These are considered unsecured debt, which means you are not required to have collateral to obtain one. For example, if you are unable to pay back the money, your lender or bank can’t take your car or home as payment.

A personal loan agreement typically contains a set amount and is only disbursed to you once. The money you can borrow is typically based on a number of factors, including income-to-debt ratio and credit score. They do often offer better rates than some credit cards. At Liberty Lending Group, we work with you to determine the maximum amount you can borrow, at the right rate for you.

Basic Personal Loan Terms

Interest Rate: Your interest rate is one of the most important aspects of your personal loan. It is essentially the cost of your debt and will greatly influence how much additional money you will have to pay. The better your credit score, the better interest rate you will usually be able to get. Having a lower interest rate is ideal because your personal will ultimately cost you less in the long run.

Any Fees or Charges: Fees and charges are also important to know when it comes to your personal loan. You should always be aware if there are any hidden fee or charges (such as origination or application fees). Additionally some personal loan terms may have higher late charges, so be sure to do your research.

Repayment Plans: A typical personal loan agreement will have a fixed repayment period that is divided into 12, 24 or even 48 months. Having a longer repayment period means that your monthly loan payment amount will be lower, but this also means you will have to pay more in interest. Alternatively, you can make larger payments that go above the monthly amount due so more goes towards the principal. Either way, be sure to know how much you can afford per month when considering a personal loan.

Your Credit Score: It is also important to remember that getting a personal loan will also have an impact on your credit score. When you apply for your personal loan, your lender will check your credit report which will automatically lower your score. If you are approved for the loan, your lender will report the details to the credit bureaus, and this will be included in your credit report. This means that, if you miss any payments or keep a high loan balance, it will have a negative impact on your score. To keep your credit score high, be sure to keep your loan balance as low as possible and keep up with your monthly payment.

Your Financial Future

A personal loan agreement could be exactly what you need to reach your financial goals or get back on track. At Liberty Lending Group, we pride ourselves on our industry knowledge and expertise with lending. We specialize in loans and making sure that our clients have the best possible options in order to meet their financial needs. Whatever your needs, contact Liberty Lending Group to find a solution for you.

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