Considering A Personal Loan? 3 Factors To Consider

Do you want to retire someday but are afraid you won’t be able to afford to quit your job? Find out how a financial advisor can help.

Considering A Personal Loan? 3 Factors To Consider

8 May 2019
 Categories: Finance & Money, Blog

Whether you need to make a large purchase, complete home renovations/repairs, or pay off debt, a personal loan can be a great option. Of course, all loans are not created equal, so you need to figure out which personal loan option is right for you. This guide will give you a few important factors to consider when getting a personal loan.

1.  Secured Versus Unsecured

Deciding whether a secured or unsecured loan is best is one of the most important factors to consider, so you need to know the difference.

With a secured loan, you will be using an asset of some sort as security to get the loan. For example, if you are taking out a personal loan to buy a car, the car will be used as security on the loan. If you default on the loan, the lender has the right to take the car to sell to cover the loan balance.

An unsecured loan is a type of loan where no collateral or security is needed. This type of loan is considered a higher risk for lenders, so you may have a higher interest rate attached to the loan.

2.  Loan Term

In many cases, you will be able to negotiate or choose the terms of the loan with your lender. The length of the term is another important factor you need to be concerned with for various reasons.

A longer term may help you finance the loan amount longer, which will help reduce monthly payment amounts. However, the longer the term, the more interest you will be paying over the course of the loan term, which can make how much you pay in total much higher.

If monthly payments are your main concern, a longer term can be beneficial. If you are more concerned with interest over the length of your loan, opt for a shorter term with higher payments.

3.  Payment Flexibility

Finally, consider securing a personal loan with a lender that offers some flexibility in making your payments.

Although monthly payments will be required, the lender should also allow additional payments of lump sums and an option to pay off the loan early without penalties. This flexibility will allow you to pay off your loan in a more efficient manner without the worry of stress and added fees/costs.

Personal loans can be confusing at times, but help is available. By understanding these factors, you can find a personal loan that works for your specific needs.

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An Enjoyable Retirement

Several years ago, my dear dad decided he needed to start saving money for retirement. After speaking with an experienced financial advisor, my parent started a Roth IRA. Over the years, my dad’s retirement account has accumulated a substantial sum of money. He recently told me he plans to retire after working for two more years. Do you want to retire someday but are afraid you won’t be able to afford to quit your job? Consider scheduling an appointment with a reputable financial advisor in your area. This professional can talk with you and help you develop a personalized savings plan. On this blog, I hope you will discover the most common methods people utilize to save money for retirement.