When it comes to consumer lending products, there are many options available online with a variety of use cases. For those in need of access to cash that isn’t tied to one specific use (e.g., an auto loan or student loan), there are two main avenues to take that, while somewhat similar, differ in several key aspects. They are a personal line of credit and a personal loan.
You may have heard interest rates are at all-time lows — so why is the average APR on a new credit card account just over 18%? In some cases, American consumers are getting hit with credit card charges of 24.99% or even higher than that.
There are many reasons why a personal loan is an attractive financing option for American consumers. So much so, that it’s the fastest growing consumer lending product in the US, particularly with younger generations.
Whether you classify as a freelancer, a contractor, a consultant, or a budding entrepreneur, those in the self-employed workforce share similar life experiences. Yes, there is the independence of being your own boss, but there is also the responsibility. And often, those responsibilities come with a cost.
For most American consumers, borrowing money can mean a few different things. Technically, anyone using a credit card is borrowing funds that need to be paid back on a monthly basis, to avoid interest charges and other fees. There is also the personal loan, a handy financial tool that allows borrowers to obtain a lump sum and repay the debt in fixed monthly installments.
Compared to an auto loan or mortgage, a personal loan is unique in that it can fulfill a number of uses, beyond just funding a major expense. As a result, personal loans can be an attractive financing option for almost any kind of consumer, thanks to their versatile nature and convenient access. It’s true, the growth of online lending has made it easier than ever for people to get quick access to funds from accredited lenders. Before diving into the personal loan marketplace, however, it’s important to ask yourself some simple questions to better understand what your funding needs are.
It’s fairly certain to say that at some point in life, nearly every person will have borrowed money through one form or another. Technically, everyone who owns and uses a credit card is doing just that. If we’re talking about the more conventional definition of borrowing, however, whether it’s for a college education, car, or home, taking out a loan is basically a financial rite of passage.