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  • Low Cost Personal Loans

    Posted on August 19th, 2010 William No comments

    Here at Twenties Retirement, we advise people to avoid going into debt if at all possible; it's always a lot easier to get in than it is to get out. Unfortunately, it's not always possible. If you must borrow money, what is the best way? Avoid payday loans at all costs; these are modern-day loan sharks  that can charge interest rates of over 500%. While credit card cash advances have high interest rates, they look downright reasonable by comparison. The interest rate on balance transfers tends to be more reasonable; you can often do a balance transfer to a checking account, or do one to a card with no balance and then request a refund for the overpayment. Home equity loans have probably the best interest rate, but you risk losing your home if you cannot make the payments. Short of borrowing against your home, your best bet (assuming you qualify) is a low cost personal loan from your local bank or credit union.  In general, if you have an account with a credit union you should try there first, as they tend to have lower interest rates than banks (although this is not always true). You'll need to show proof of income to qualify for an unsecured personal loan; if this is not possible, you may be able to obtain a secured loan by putting up sufficient collateral. Even if you qualify for an unsecured loan, if you are confident of being able to pay the money back you may wish to consider a secured loan as well if it will give you a better interest rate.

    Note: personal loans are sometimes called signature loans.

    If you prefer to go to a bank (or don't belong to a credit union), Barclays bank is one of the most popular choices. Barclays is a British bank with branches in dozens of countries; they offer instant personal loans to customers who have had an account for at least a year and deposit at least a thousand British pounds (or equivalent) every month. Barclays personal loans are popular due to the speed (within four hours) they are available, as well as the low cost. Be reasonable about what you can expect. Unless you're taking out a student loan, which has its own dangers (for example, student loans cannot be discharged by bankruptcy), you generally won't be able to get a loan that's overly large compared to your current income. Figure out how to do with as little money as possible so that you aren't taking out a lot of debt, and then pay it back as quickly as you can; this will give you more options in the future. Taking out and repaying a loan can actually improve your credit score, as it shows that you can handle borrowed money responsibly; while this in itself is certainly no reason to go around paying interest, if you must borrow money, at least when you repay the loan on time you can get some benefit out of it!

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    1. Personal Loans from Barclays Bank: All About Barclays Personal Loans

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