Secured personal loans tend to be more beneficial than other types of loans because they generally offer better interest rates, better terms of repayment and lower fees, according to Bankrate.com. Secured loans can offer more favorable terms to the borrower because they are insured by some type of collateral. The best repayment terms for personal loans are fixed rate instead of variable rate.Continue Reading
In contrast to secured loans, explains Bankrate, unsecured personal loans are not insured by any type of collateral and, consequently, they typically have a much higher interest rates. Borrowers should know their credit score and shop around to find the most beneficial circumstances for securing a loan. It is also important to be aware of the specific repayment terms upfront and to know whether the loan is paid out in one lump sum or in timed installments, notes Bankrate.
Other options for securing a personal loan include credit cards with a zero percent interest rate and websites that offer peer-to-peer lending, reports BusinessInsider.com. Peer-to-peer sites allow users to apply for a loan online and have other users on the site contribute loan funds to the requester. Interest rates on these types of loans may vary, depending on the borrower's personal credit history.Learn more about Credit & Lending