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10 Common Personal Loans — and Options for When You Can’t Qualify

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Whether you’re looking for more money for a costly home project or just need some cash to tide you over until payday, you have a number of options for getting secured or unsecured loans. You can choose from non-traditional options or traditional lenders like banks and credit unions.

Personal loans vary; although most are fixed-rate loans, not all are low-interest loans and some are only available to consumers with good credit. Here are 10 unsecured personal loan types for you to consider. Check out advantages, disadvantages and typical terms and rates so you can better decide which are the best borrowing options.

1. Peer-to-Peer Loans

Peer-to-peer lending connects borrowers with investors to fund loans. P2P lenders operate exclusively online, so customers can get lower interest rates. Approval for P2P personal loans can depend on debt-to-income ratio, financial history and career experience. Application requirements include proof of income and employment.

Pros

Cons

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Terms and Rates

Lending Club, the largest P2P lender, offers these terms:

Read: Pros and Cons of Peer-to-Peer Lending

2. Bank Loans

Banks are the traditional source of personal loans. If you have an existing relationship with a bank, you might get the best rate and loan there.

Pros

Cons

Terms and Rates

TD Bank offers these terms and rates on an unsecured installment loan:

 3. CashCall

CashCall is an alternative to other unsecured loans for qualified borrowers. You must provide ID, proof of an active bank account and proof of income. These loans are processed through the internet, by phone and by fax. Funds are then wired to a borrower’s checking account.

Pros

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Cons

Terms and Rates

For California residents, CashCall offers the following terms:

 4. Check Into Cash

Check Into Cash offers quick money solutions to customers with bad credit looking for a short-term loan. A payday loan — a type of bridge loan — is used to provide cash in between paychecks and is offered in amounts up to $1,000.

Pros

Cons

Although loan qualifications are more lenient in comparison to other lenders, payday loans are often much smaller. Loan payments are automatically withdrawn from your checking account.

Terms and Rates

For California residents, CashCall offers the following on a $255 payday loan:

Read This First: Why Payday Loans Are Dangerous

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5. Crowdfunding

Chances are you’ve heard of crowdfunded startups, such as the popular Kickstarter, GoFundMe and Indiegogo. These platforms are ideal for raising funds that you don’t have to repay or for using when other loan options are unavailable.

Pros

Cons:

Terms and Rates

Learn: How to Get the Best Personal Loan Rates

6. Debt Consolidation Loan

Another type of personal loan is the debt consolidation loan, which combines all your debts into one monthly payment — ideally, at a lower rate. This type of loan is great for people who can stick to a debt payment plan. Typical uses for debt consolidation loans include credit card or student loan debt.

Pros

Cons

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Terms and Rates

Here’s what an option for student loan consolidation looks like from Wells Fargo: 

7. Installment Loans

Under the general terms of an installment loan, you agree to pay back the loan in monthly payments — plus interest and fees — over a set period of time. Unlike payday loans, installment loans have a longer duration, lower interest rates and are available in much larger amounts.

Pros

Cons

Terms and Rates

Requirements, range of terms, APR and loan amount all depend on credit and customer residence, according to installment loan provider Avant. With installment loans, monthly payments are automatically withdrawn from the borrower’s bank account. 

New Options: With These New Apps, You Can Finance Almost Anything at Checkout

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8. Secured Loans

A secured loan is an option for those with equity in property, vehicles or savings accounts that can be used as collateral for the loan. A secured loan is much easier to obtain than a home equity line of credit, which is a second mortgage.

Pros

Cons

Terms and Rates

Here’s an example of what a secured personal loan from Wells Fargo might look like:

9. Single-Payment Loan

Unlike an installment loan in which you repay the lender in monthly installments, a single-payment loan requires you repay the lender all at once. On a set date, you will have to pay the borrowed amount plus interest and other fees in full.

Pros

Cons

Terms and Rates

Because this option is riskier for the borrower, full repayment will take some strategic planning.

10. Convertible Loan

Also known as convertible notes, these debts convert into equity when a startup raises actual equity. The lender grants a loan of whatever amount, but instead of receiving cash payments, the lender gains a piece of equity in the borrower’s company.

If you’re looking for a loan for personal business matters, you might want to consider this option.

Pros

Cons

Terms and Rates

When convertible notes are evaluated, the following — which can vary depending on agreement terms — are considered:

What to Do If You Can’t Qualify for a Personal Loan

Despite the range of options available, a personal loan might not be the right solution for your situation. If that’s the case, you can consider the following alternative:

Low-Interest or 0% APR Credit Cards

If you have good credit, you might be eligible for a low-interest credit card with no-fee debt consolidation. If you can afford the monthly payments and don’t need to borrow much, low-interest credit cards could be better for your budget. In contrast, if you have to borrow an amount that will take a longer period of time to repay, a personal loan might be better. Some credit cards offer 0% APR introductory periods for as long as 12 to 18 months.

Tips for Paying Off a Personal Loan

Paying off your personal loan should be a top priority. Using automatic payment features can help you pay down debt without the worry of late fees. Also, if you opt to set up multiple monthly payments, you’ll pay less interest and pay off the loan faster.

Up Next: 5-Step Guide to Refinancing Your Personal Loan