There are a number of different reasons why a person would seek one of the guaranteed personal loans that are available on the market. For some of us, it is a matter of wanting to start a business and having one of these loans is certainly going to go a long way in helping us to stock our shelves or to pay our bills while we are working on becoming profitable. It may also be necessary for us to consolidate a lot of smaller bills with one of these guaranteed personal loans so that we can make our monthly payments easier. If we have missed several credit card payments, even if it did not get to the point where it affected our credit score, our interest rate can rise dramatically. Guaranteed personal loans will typically have a lower interest rate than this, benefiting us in a number of different ways.
The difference between guaranteed personal loans and unsecured personal loans is that you are going to give a guarantee to the bank that you will repay the loan by putting up collateral. One of the most common types of these loans is a second mortgage or home equity line of credit. The reason why these are so popular is because the interest rate is typically tied directly into the prime rate. Although the amount of interest that you will be paying for one of these loans will fluctuate as the prime rate fluctuates, it is typically much lower than what you’re going to be paying to a credit card company or even through a traditional bank loan. If you have equity in your home, this is certainly something that you should look into.
Guaranteeing a personal loan can also help us if we have less than perfect credit. Although bad credit is always going to disqualify you from going through some of the normal lending institutions, there may be some out there which will lend you the money if you put up something to guarantee it. Although you will typically be paying a little bit more as far as interest is concerned and perhaps even some loan fees, it can certainly help you to get what you need without having to worry about where the money is going to be coming from.
There are several different ways that you can secure one of these loans. Typically, you would be going into a lending institution in order to sign papers and see what they have to offer you. With the age of the Internet, however, it is now possible to apply for and be accepted for one of these loans electronically. Make sure if you go this route that you look at all of the fine print that is available and double-check everything before you actually complete the online form. Knowing this will ensure that you are not signing away something that you had not intended or that there are no loan fees that are hiding underneath the surface.