Personal Loans Are Legally Binding

You may be caught on the fence about whether you should get an unsecured personal loan or a home equity loan


You may be caught on the fence about whether you should get an unsecured personal loan or a home equity loan. If you are looking to obtain some cash for a home repair, vacation or even pay off debt, you can get the money you need via an unsecured personal loan.

Home equity loans offer strong tax advantages, but there are some reasons you may want to consider a personal unsecured loan instead. First of all, if you get an unsecured personal loan, you’ll gain access to your funds instantly. Once you’ve applied for the loan, it’s typically just a few hours before the money is deposited into your checking account.

Second, with personal loans, you can get small amounts - in some cases, as little as $100.

The third reason you should consider a personal loan over a home equity loan is that there are no closing costs.

An unsecured personal loan will be your best option if you’re not a homeowner, and you are looking to borrow cash fast. Home equity loans can take weeks - and sometimes you just can’t afford to wait.

Once you have obtained your personal loan, you can use it however you like. One of the more popular reasons people get personal loans is to consolidate debt. You can combine your high interest credit cards into one easy monthly payment, at a reduced rate. Since you’ll have a lower interest rate, you’ll save money.

But bear in mind that an unsecured personal loan is just that - unsecured. This means there’s no collateral requirement. But since the loans are considered high risk by lenders, there are often strict repayment requirements.

If you default on a personal loan, you will see a significant drop in your credit. This begins when the loan is 30 days past due. An even greater drop in your credit will take place after the loan is 60 and then 90 days overdue. The debt will then likely be turned over to a collections agency. If you don’t respond to the agency’s attempts to collect, you’ll see your credit score drop to an all-time low. This is true, regardless of the size of the loan.

There are also penalties if you are late or if you miss a payment. You could even find yourself with a court order which means the judge could order your wages to be garnished.

Remember: A loan contract is legally binding. If you don’t hold up your end of the deal, the legal system can enforce regulation to make sure the lender gets paid.

Company Contact Information
America One Unsecured
1-800-457-6785

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