Often the reasons for personal loans are just that: personal. We can all use a little extra cash now and then, and for some, living in the fallout of the 2008-2009 economic collapse, a little extra cash can be a matter of survival. There is no central database for personal loan statistics, but suffice it to say that more and more people are seeking ways, both conventional and unconventional, to get a little extra something-something in their wallet each month.
The motive for seeking out personal loans for many is debt consolidation. While it may seem like the definition of insanity to borrow more in order to pay less, for many people who find themselves overloaded with high-interest poor credit history card debt, or short on their rent, or over-extended on their car loans, debt consolidation with a lower- interest personal loan is the way to go. Others simply find themselves with an unexpected expense such as a medical emergency, or job cut-back, or some other non-recurring overhead that they just don’t have the funds to pay for in a particular month. We could all use a little economic bailout these days, but unfortunately the opportunities for individuals are not as great as those for big corporations on Wall Street. People seeking their own private stimulus packages have several options in today’s economy.
Banks: If you have a good relationship with your banker you may be able to seek out a small personal loan at a low interest rate. More and more banks are willing to lend minor amounts and you can expect the interest rate to be around 10% with good poor credit history.
Payday Advances: Storefronts offering a monthly advance can be a blessing to those in need of a couple of hundred dollars to get them through the month. Usually you just need to have proof of a job and a checking account. Expect to pay around $40.00 to borrow $250.00. Keep in mind these loans are usually based on a percentage of your pay check and all usually only for a term equal to the time your next paycheck is due.
Peer to Peer Lending: More and more sites are popping up on the web as a way to generate private, or peer-to-peer, personal loans. These sites operate as a model much like popular music-sharing or file-sharing sites. People write in who need to borrow money and connect with people who want to loan money. Needless to say, there is the potential for fraud on both sides with this kind of lending.
