Pros and Cons of Personal Loans

 

Pros and Cons of Personal Loans

Pros

Depending on the lender, borrowers can potentially receive funds for personal loans in as little as one business day.

Personal loans can help borrowers consolidate high-interest credit card debt and pay it off faster at a lower interest rate.

Personal loans are delivered as a lump sum.

Personal loans are typically unsecured, so the borrower doesn’t have to use collateral.

Cons

Depending on the lender, borrowers may have to pay origination fees, or even prepayment fees.

A personal loan may have a higher APR than other options, such as a 0% credit card or a home equity loan, depending on creditworthiness and other factors.

Personal loans may be difficult for consumers with fair credit or below to obtain.