Skip to main content

Personal Loans vs. Home Equity Loans




Personal loans are a great way to get money quickly for most anything you need it for, even a well deserved vacation. These loans are generally easy to obtain and require a minimum of verification including residence, income, and employment. However, personal loans also come with a higher interest rate than most other loans out there. In many causes you will be required to put up some asset you have collateral on your loan.





An alternative to applying for a personal loan is to apply for a home equity loan. This type of loan is only available to those who are buying or have paid off their home. You are borrowing money against the equity you have built up in your home. This loan method will likely allow you to borrow more money than a personal loan based on the dollar amount of equity you have in your home. Equity loans are available at a much lower rate than personal loans. The price for that comes with your home being attached to the loan.





For most people, it really isn’t a big deal because they already have a mortgage to pay each month. Adding on a longer term to repay that loan doesn’t bother them at all. However, if you don’t repay the funds, you may end up losing your home so make sure you take out home equity loans responsibly. In many cases, the interest portion of a home equity loan can be deducted on your Federal income tax. This is not possible with personal loans.





In making the choice between a personal loan and a home equity loan, there are many things you will want to consider. First, decide exactly what the loan is to be used for and the dollar amount you need. Most personal loans won’t exceed $15,000 so if you need more than that you will have to secure more than one personal loan or look at the home equity loan option. Next, take a realistic look at your credit. Personal loans are easier to get with poor credit than home equity loans are.





As will any loan, take the time to research your options and know what is available and the total cost of that loan to you. The best way to do is by taking a look at the Annual Percentage Rate, known as APR. It is required of lenders to show not only the loan interest rate associated with APR, but all the fees of the loan. This means everything you will be charged for in the loan you choose will be listed and itemized for you to review.





This is a great method for comparing different types of loans. For example, home equity loans generally have lower interest rates so you would assume that is a better option than a personal loan. However, the additional fees required to secure that home equity loan may cost you more than the additional interest you will pay over the life of the personal loan.





Personal loans are a great method of getting the money you need quickly and efficiently. However, they may not always be the best loan for your particular situation. It is important that you discuss your loan options with the lender you intend to use. It is also important that you conduct your own research on various types of loans you may be eligible for. This will assist you in making informed decisions while ensuring you get the best loan available.


Labels:

Comments

Post a Comment

Popular posts from this blog

Best Web Site Optimization Forums

One of the things that I like best about the Internet is how easy it is to exchange information with other people. One of the most informative and interactive ways to do so is by becoming involved in various forums. In terms of search engine optimization, there are countless forums out there from which any person can glean tons of useful information. At the same time, you can also share your own experiences and tips. But if you are new to these things, which forum do you go to? About.com came up with a list of the best forums < http://websearch.about.com/od/seoblogsmessageboards/tp/seoforum.htm > out there which focus on web site optimization. Let's pay some of them a visit? /*Web Site Optimization Forum #1: High Rankings < http://www.highrankings.com/forum/ >* HighRankings.com is a forum put together by Jill Whalen, one of the shining stars in the Web site optimization world. I like this forum because of the variety of people that contribute, the discussions are inform...
Post a Comment
Read more

Best Web Site Optimization Forums (Part 2)

During hard economic times < http://www.bizcrunch.net/marketing/should-we-panic-from-the-lehman-debacle/ > – like the one we are in right now – many things are cut off from people's budgets. Personal expenses are drastically cut down. Business expenses are not exempt as well. Somehow, people find ways and means by which to lessen spending in order to weather the financial storm. Peripheral spending and nonessential expenses are usually the first to go. If you are thinking of cutting off your SEO expenses because of the credit crunch, you might want to think again. Ephipany Solutions explains the situation < http://www.epiphanysolutions.co.uk/payperclick/18791136/Credit-crunch-not-a-good-reason-to-cut-SEO-spending >: Firms should not cut back on search engine optimisation (SEO) spending because of the credit crunch, it has been argued. Daniel Robinson of Vizcom Design Limited suggested that SEO strategies can play an important part in the success of a bus...
Post a Comment
Read more

About Online Trading

The invention of the Internet has brought about many changes in the way that we conduct our lives and our personal business. We can pay our bills online, shop online, bank online, and even date online! We can even buy and sell stocks online. Traders love having the ability to look at their accounts whenever they want to, and brokers like having the ability to take orders over the Internet, as opposed to the telephone. Most brokers and brokerage houses now offer online trading to their clients. Another great thing about trading online is that fees and commissions are often lower. While online trading is great, there are some drawbacks. If you are new to investing, having the ability to actually speak with a broker can be quite beneficial. If you aren’t stock market savvy, online trading may be a dangerous thing for you. If this is the case, make sure that you learn as much as you can about trading stocks before you start trading online. You should also be aware that you don’t have a com...
Post a Comment
Read more