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Thread: (unsecured) loans

  1. #1
    Veteran Member jennahoff's Avatar
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    Default (unsecured) loans

    Sorry, not quite sure where to post this but basically I am about 6,000 in credit card debt. My only other monthly expenses are my car insurance (car is finally paid off !!!) internet/cell/tv bill(combo).
    Im moving out(or would like) next month. Currently at home (ugh) but need to get back out my own again.
    I want to take out a loan and pay off my credit card debt which is on 3 different credit cards. Currently I try to switch the balances around to the lowest APR's when there are promotions.

    Basically I wanna pay off the cards with the loan and then use the rest of the loan for a new apt.
    My credit is excellent, im not sure if this helps or not but I have a score of 845.

    Ive never taken out a personal loan before so i just wondered if anyone knew exactly how they worked and how much your monthly payments are when you take out a loan. I figure if im taking out 6 to pay off my debt i could add on another 2,000 for apt costs. (first, last, security).

    It all seems overwhelming. I dont really know where to start. I see alot of things online for personal loans but I am wary on who to trust.
    I might go to my bank tmorrow, ive been with them about 15 years.

    Any info would be greatly appreciated.
    ~jenna~

  2. #2
    Banned Melonie's Avatar
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    Default Re: loans

    Dropping back to basics, the type of loan you are talking about is a 'signature' loan a.k.a. a promissory note ... which is not secured by any sort of collateral other than your signature. This is considered to be a comparatively high risk loan type ... and will have an interest rate to match. However, while that interest rate may in fact be a few points lower than a credit card interest rate ( i.e. 10% signature loan versus 12% credit card ), it won't be anywhere near as low as the interest rate on a loan secured by collateral ( i.e. home equity based loan ).

    When applying for such a loan, under new regulatory guidelines the prospective lender is going to want to see the usual personal data and credit history / rating. The prospective lender is also going to want to check on your income source and see some sort of income verification documents ... typically the last couple of years worth of your tax returns in the absence of paycheck stubs.

    Undoubtedly the best place to seek a signature loan is a credit union as opposed to a commercial bank. The main reason for this is that commercial banks must hold 'reserves against future losses' which are proportional to the risk as well as the recoverability of any new loans they make. Thus when banks have limited reserves, they would much rather use say $10,000 in reserve money to back a $100,000 home mortgage or back $60,000 worth of new auto loans versus $30,000 in unsecured loans. Credit unions fall under a different regulator and typically aren't facing a problem with limited reserves ( although a few definitely are @!)

  3. #3
    Veteran Member jennahoff's Avatar
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    Default Re: (unsecured) loans

    **woo hoo ** my sister offered to loan me the money.
    I never would of asked but Im glad she offered. She knows Im good for it.
    Ahh what a relief.. thanks for the info though melonie.
    ~jenna~

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