What’s a Personal Loan? Why They’re So Beneficial

An envelope filled with $100 bills, symbolizing what a personal loan is

As you likely know, life gets expensive fast. Whether you need money for sudden expenses or ones that have weighed on your mind for a while, you can get relief from these costs through obtaining a personal loan.

But how does getting a personal loan work? What are the benefits of personal loans? Forward FundingTM has the answers to all your questions.

What Is a Personal Loan?

A personal loan is an arrangement between a borrower and a lender. If you need a personal loan, you must find a lender willing to loan you money. You then agree to their terms. Once that’s done, you get your money.

The next step of how a personal loan works involves making installment payments, meaning paying back a small portion of the original loan amount plus additional expenses toward loan-related interest.

Benefits of Personal Loans

Deciding to apply for a personal loan is a major decision. Before taking this step, wanting to know what makes personal loans beneficial is understandable.

Versatility

A barrier to entry when seeking a loan is dealing with strict loan types. Some loans can only go towards a home.

Choosing one expense to pay isn’t always easy or even possible. Thankfully, the funding obtained from personal loans can pay for a wealth of expenses.

Common personal loan uses include:

  • Emergency expenses
  • Debt consolidation
  • Home renovation projects
  • Education-related costs
  • Vehicle repairs
  • Medical expenses
  • Weddings
  • Buying big-ticket items (appliances, furniture, etc)
  • Funerals

Collateral Rarely Required

Sometimes, life’s challenges can seem unrelenting. Because of that, someone seeking a loan may not have much left to use as collateral.

Collateral is something of value that a lender takes possession of temporarily as a borrower repays their new loan. If a lender defaults (stops paying) on their loan, the lender has the right to keep a borrower’s collateral.

Fortunately, a benefit of personal loans is that most don’t require collateral. That means you don’t have to risk anything of value. Forward FundingTM can help ensure you find only personal loan options with no collateral required.

Fixed Rates Often Available

Rates are crucial factors for anyone learning what a personal loan is. A loan’s interest rate determines the amount of your repayment installments. The higher the interest rate, the more money it costs to pay off your personal loan.

Thankfully, a personal loan often offers fixed rates. Fixed rates stay the same. If you obtain a personal loan with a fixed rate, you don’t have to worry about fluctuating loan payment amounts.

A Lump Sum Payment

Another personal loan benefit is that they’re typically available in a lump sum payment. An annuity is another type of loan in which you receive funds over time in set intervals. Do you need a sizable payment all at once? Lump sum payments are the way to go.

Potential Credit Score Improvement

Initially, loans won’t positively impact your credit. Credit scores affect your ability to qualify for a loan, finance a home, and more. Fortunately, someone can increase their credit score in many ways. One method is making on-time loan payments.

Frequently Asked Questions (FAQs) About Personal Loans

Someone realizing the benefits of a personal loan by using it to pay bills on their table

When researching what a personal loan is, you may come up with additional questions. Here are the answers to questions Forward FundingTM often receives about personal loans.

1. How Long Does the Personal Loan Approval Process Take?

You can rest assured that Forward FundingTM works to process loan applications and secure your funds quickly. Some of our customers get access to their funds in as little as 24 hours.

2. Is Forward FundingTM Legit?

Yes, absolutely! Forward FundingTM is a lender accredited by the Better Business Bureau and Consumer Affairs. We also use SSL secure encryption technology for superior safety with all client-related information.

3. How Does Forward FundingTM Work?

Our company uses a fast and simple process to help those seeking financial assistance. First, check your rate and answer a few quick questions. Next, we’ll explain what plans are available to you. After choosing your plan, we’ll get your funds deposited right away.

Find a Personal Loan That’s Right for You

Personal loans can be confusing. We hope that we helped you understand what a personal loan is. Find a wealth of attractive personal loan options by contacting Forward FundingTM. We’re here to assist you. Let us help you understand available loan offers. Forward FundingTM can also guide you through applying for a loan or any other related questions or concerns you have. Check your rate today to get started!

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