Consumer Loans FAQs
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Q:
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What is a personal loan?
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A:
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There are two types, secured loans and unsecured loans. No security is required for an unsecured loan, but a secured loan, which is often for a larger amount, will be secured against an asset, such as your house or your car.
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Q:
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Who is eligible for a personal loan?
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A:
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Personal Loans are available to anyone who has a steady source of income. Any individual can obtain a personal loan as long as they are:
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Salaried individuals
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Self-employed professionals
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Self-employed non professionals
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Subject to credit approval
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Q:
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What is the difference between a personal loan & credit card?
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A:
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Unlike loans against a credit card, in a personal loan it is necessary for the borrower to draw out the entire loan and the loan is repaid by way of fixed monthly installments. In the case of a card, the interest is charged based on the amount utilized only.
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Q:
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What can I use the loan for?
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A:
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You can use the loan for any legal purpose including purchase of Time Share, Debt Consolidation, Home Improvements, etc.
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Can I repay my loan early?
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Yes. All Lenders allow early payment and either apply a sliding scale or a rebate in accordance with the Consumer Credit Act.
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What are some reasons I may be turned down for a loan?
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A:
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Often your credit history is why you are turned down for a loan. If you are viewed as a risk, and your report indicates that with prior creditors you consistently made late payments or skipped payments or defaulted on a loan, it will affect your score and may result in your being turned down for the loan.
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Q:
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What does an inquiry for a loan do to my credit report?
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A:
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Each time you apply for a loan with a financial institution, they look at your credit report and that inquiry goes on your report and can negatively affect it if there are too many inquiries within a short period of time.
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Q:
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What is a consolidation loan and how does it work?
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A:
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A consolidation loan allows you to pay off several creditors and pay the balance to one creditor. This simplifies making monthly payments and can possibly reduce interest rates, so you may end up paying less than what you would have paid without the loan.
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Q:
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When should I ask for a co-signer for a loan?
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A:
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A co-signer adds security for the bank or financial institution that provides your loan. A friend or relative can act as a co-signer.
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Use one of our calculators to determine how big of a loan you can receive.
For more information on Personal Finance Options, click here to send us your questions, or contact us at 1-800-946-4178.
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