Credit market suggests today the variety of options which help consumers to bridge the money need. And short-term borrowing options are the most popular. Though unsecured personal loans which serve to satisfy short-term consumers’ needs are famous because of extremely high interest rates and huge fees nevertheless they give consumers with high credit score the opportunity to avail of low interest rates.
Unsecured Personal Loans are Very Popular in 2014
Personal money lenders started experiencing such policy in order to acquire competitive advantages and to attract more consumers. Thus people are suggested to repay high-interest credit card or any other debt with the help of unsecured personal loans providing significantly lower rates.
The amount of personal loans which were provided to consumers during the first half of 2014 is around $34 billion that is 8.7% higher comparing to the same period of the previous year. Actually this is unprecedented consumer boom since 2008.
Experts explain such situation with the fact that personal loans are very convenient because they are unsecured and may be used for a wide range of purposes. For example consumer may buy a car, take a trip to another country, renovate the house, or buy completely new furniture with the help of such a loan.
The consumer doesn’t risk facing foreclosure or losing any other property in case of failing to repay unsecured personal loan but nonetheless credit score would suffer.
Good Credit is a Guarantor for Attractive Interest Rate
People with good credit have a chance to get the loan without any hassle or excess paperwork and in no time. In most cases consumers get the money transfer within one working day. Moreover the consumer is not required to prove his or her income and the right for property but still the lender will check the credit report.
The consumer needs to have the credit rating at the level more than 760 FICO in order to get an attractive interest rate. This is a good opportunity to save much money for people with high credit. Besides, the consumers may be sure that interest rate will not change unless the contract is close because the rate is fixed. Using personal loans with non-conventional interest rates is also a good opportunity to get a low rate.
As of today consumers can still get high interest rates starting from 10% and can be charged significant amount of fees when using personal loans according to the information obtained from Bankrate.com.
But people who are considered by lenders as responsible borrowers will still get attractive rates starting from 1.98% depending on the loan’s purpose. People who just have started their credit histories may avail of personal loan rates on the level starting from 6%.
It should be noted that people who used credit cards got the average interest rate on the level of 12% as of August 2014. And even people with high credit didn’t succeed to get a rate lower that 9.25%.
But still it is better to shop around when choosing a provider of the unsecured personal loans because different lenders suggest different terms and rates. Consumers may find helpful websites over the Internet in order to find out which lender suggests the lowest rate.