Top Reasons to Choose a Personal Loan
Personal loans are exactly that – PERSONAL! Members like them because they fill a void where other loans cannot. They can help you over the hump with a medical or car repair bill or make something special, like an unbelievable trip, possible. We also like them for their cost savings; if you shop accordingly, personal loans can be extremely cost-effective. Like any loan, it pays to compare and understand the benefits before making a decision.
How personal loans work:
- The process is easy since no collateral is needed. There are no worries of putting up your belongings to get the loan, so there is less risk for you.
- The documents to complete should be minimal. Less paperwork will keep the turnaround time for the loan fast.
- A low fixed rate will make payments affordable. Your credit history may also help determine your rate. If it’s strong, why not save with a low rate based on your character and repayment history?
- They offer flexible loan amounts. Most institutions offer loan amounts based on need and credit history. Consider what you need the loan for and if the financial institution can approve you for the amount you need.
- There is an end in sight. Compared to costly credit card debt, the term is fixed, so your loan is not extended indefinitely. (Note: Prolific use of credit cards is almost always more expensive and can take years to repay. Personal loans enable you to get out of debt in a reasonable time frame.)
- Fair-minded institutions will offer no pre-payment penalty for early payoff. You will save money and have peace of mind if you want to pay the loan off early. Remember to read the fine print before committing. Watch for added penalties that could add to the cost of the loan.
- For unexpected expenses, they are a prudent choice. They are also safer and far less expensive than payday loans, which can perpetuate a staggering cycle of debt. (Read more about the dangers of payday lending.)
There can be downsides:
- If you default on a personal loan, your credit is damaged.
- Some lenders may not approve the loan if your credit rating is not strong.
- Rates can be higher at some institutions. Compare rates and terms before you sign.
- You still pay interest. Consider a loan against shares or a savings account for the absolute lowest loan rate.
- Your monthly payment may be higher than a credit card’s minimum payment. However, you will almost always pay less in total interest versus extended credit card payments. Try our loan payment calculator to compare the scenarios.
Is it better just to save?
Almost always, if the need for funds is not urgent. If you have adequate savings, there’s no sense obtaining a loan and paying interest. That’s why at ECCU we encourage you to put 10 percent of your paycheck into a savings account. This enables you to build an emergency fund in times of need instead of tapping into a loan.
Why choose ECCU?
We can’t stress this enough: we can design a personal loan around your needs. And with us, you’re not just a credit score or number. Consider these additional benefits:
- Unlike other financial institutions, we offer the loan because we know you sometimes need money quick.
- You can select longer terms of up to 84 months, depending on your credit standing and reason for the loan.
- Rates are competitive in the market. We monitor rates weekly to make sure they stay below the competition – up to two percent less.
- We are flexible with the amount and can lend up to four times your gross monthly income (sometimes more). Loan amounts depend on the strength of your credit and financial situation.
We can also finalize your personal loan in 30 minutes or less. including the time to apply, underwrite, and close the loan. Contact us to see if a personal loan is a good solution for you. Right now, rates are as low as 5.99% APR on our summer loan special through August.