How To Qualify For A Personal Loan

Need to gut your 1970s-era kitchen? Planning an expensive wedding? Want to consolidate your high-interest-rate credit card debt into a single loan with a lower interest rate? A personal loan can be an important financial tool whenever you face big expenses.

But how exactly do you qualify for a personal loan? It’s all about building a good credit score and earning enough money so that you can pay your loan back on time.

“One of the most important factors in qualifying for a personal loan is your credit score and history,” says Xavier Epps, chief executive officer of Alexandria, Virginia-based XNE Financial Advising, LLC. “These factors help potential lenders decide if they believe you will honor the terms of your loan agreement. If your credit shows that you have a history of not repaying loans, then the potential lender is more likely to believe you won’t repay them.”

What Can You Use A Personal Loan For?

What is a personal loan and how can one benefit you?

People consider personal loans as a manageable way to reach their goals when paying for a big or unplanned expense. For example, maybe you’re planning a large wedding. A low-interest-rate personal loan can help you cover any upfront costs. Or maybe you need to furnish a newly purchased home and you’re feeling a little house poor after closing costs. A personal loan can then provide you the lump sum payment you need to fill your home’s living room and kitchen with new furniture.

You can also apply for a personal loan to pay off high-interest debts, such as credit cards. Say you have €/$10,000 in credit card debt. If you take out a €/$10,000 personal loan, you can immediately pay off that debt. Yes, you’ll have to pay back your €/$10,000 personal loan, but if it comes with a far lower interest rate and timely repayment plan. Therefore, you’ll end up paying less over time.

How Does A Personal Loan Work?

When you take out a personal loan, you’ll receive a single lump-sum payment. You can then spend those dollars however you want.

You have to pay back your loan, though, which you’ll do with regular monthly installments. Each month on your due date, you’ll send in your required payment until you pay off your loan. The terms for personal loans vary, but you might have 3 or 5 years of monthly payments until you pay off what you’ve borrowed.

You won’t just pay back your principal balance, though. Keep in mind that you’ll also have to pay interest. This is how lenders make their money. Your monthly payment is made up of your principal balance and your interest. The amount of interest depends on your interest rate. It’s important, then, to shop around for the personal loan that comes with the lowest interest rate.

It’s also important to consider lending fees. Some lenders charge origination fees – usually a percentage of what you’ve borrowed – when you take out a personal loan. This fee might be in the range of 1 to 5%. If you borrow $5,000, and your lender charges an origination fee of 5%, you’d pay $250. Make sure to do your research when shopping and feel comfortable with any additional fees that lenders may offer.   

What Do You Need To Qualify For A Personal Loan?

Lenders will look at your financial health to determine if you qualify for a personal loan and at what interest rate. Fortunately, qualifying for these loans isn’t overly complicated.

Here’s a quick look at what you’ll need:

A Solid Credit Score

Lenders will pull your three-digit credit score. This number instantly tells them how well you’ve managed your credit and whether you have a history of paying your bills on time. If your credit score is low, lenders know that you have missed payments, high credit card debt or both in your past.

Lenders generally consider a credit score of 740 or higher to be excellent. You don’t need a credit score this high, though, to qualify for a personal loan. Lenders vary, but most want your score to be 640 or higher. This doesn’t mean you can’t qualify for a personal loan if yours is lower, but the lower your score, the higher your interest rate tends to be. And with a higher interest rate, you’ll pay more each month when repaying your loan.

A Solid Payment History

Lenders like lending money to borrowers who have a history of paying their bills on time each month. Because of this, lenders will pull your credit report from one or more of the three national credit bureaus – Experian™, Equifax® and TransUnion® – to look at your payment history.

Your credit reports list your open credit and loan accounts, and your payment history with them. If lenders see several late or missed payments, they’ll hesitate to approve you for a personal loan. And if they do approve you, they’ll charge a higher interest rate to make up for the risk they’re taking on.

Be careful, then, with payments. Late or missed monthly payments remain on your credit report for 7 years.

Nishank Khanna, chief marketing officer with New York City-based Clarify Capital, said that a history of missed payments is one of the most common reasons lenders reject a borrower’s application.

“Someone with black marks on their credit report due to missed payments or a defaulted account is going to have much greater difficulty securing a personal loan than someone with a clean report,” says Khanna. “A person with poor payment history is going to be seen as a higher risk and financial institutions seek to minimize lending risks.”

A High Enough Income

Lenders want to make sure you can afford your new monthly payment. Before approving you for a personal loan, then, they’ll look at how much money you bring in each month. If your monthly income stream is too low, you might struggle to qualify for a large enough personal loan to cover the big expense you are trying to pay.

Car loan

What is Car Loan?

A car loan (also known as an automobile loan, or auto loan) is a sum of money a consumer borrows in order to purchase a car. Generally speaking a loan is an amount of money that is lent to an individual, a business, or another entity._

car loan
Car loan

According to invest-loans the party that lends the money is known as the lender, while the party borrowing the money is called the borrower. When taking out a loan a borrower agrees to pay back the full amount, as well as any interest (a percentage of the credit amount, usually calculated on an annual basis), by a certain date, typically by making monthly payments.

This is secured against the vehicle you intend to purchase, which means the vehicle serves as collateral for the credit. If you default on your repayments, invest-loans can seize the auto. This is paid off in fixed installments throughout the loan. Much like a mortgage, invest-loans retains ownership over the asset until you make the final payment.

In order to determine what interest rate and term would best suit your needs before you head to the dealership, consider experimenting with an calculator first. –

Interest Rates

Given that the lender has financial control over the car—it’s a secured loan—the debt is deemed a lower risk, which generally translates to a significantly reduced interest rate for the borrower. Interest rates are also fixed, so borrowers are not subjected to the increases that can be associated with unsecured personal loans.

The Terms of Car loan

Invest-loans car loans are fixed at 36, 48, 60, or 120 months. And just like the personal, the shorter the term, the higher the monthly repayment and vice versa. A less-than-average credit history won’t necessarily stand between you and your credit (unlike a personal). It will also have less impact on your interest rate or borrowing amount, which is dictated by the price of the car.

There are a variety of ways to get loans. Before signing up for a dealer credit, it can be worth investigating whether invest-loans can give you a better deal.

Special Considerations

Regardless of whether you choose a personal loan or other, rates and deals vary between institutions. So do your homework and shop around for the best deal. Explore invest-loans lending platforms to find the best combination of interest rates and car loan lengths for an affordable monthly payment.

The Bottom Line

When it comes to buying a new car, many consumers will opt for a dealer-financed car loan because it’s quick and convenient. But in some cases, it can be more effective to obtain a personal loan . To make an informed decision, start by asking yourself these questions:

  • Do I have collateral with which to secure the loan?
  • What interest rate (and associated repayments) can I genuinely afford?
  • Is my credit in good enough shape?

Deciding between the two all comes down to weighing the pros and cons in light of your individual circumstances.

How To Get A Personal Loan

How To Get A Personal Loan? Sometimes you need a loan – perhaps you’re trying to purchase a new car or you need funds to put on a new roof. Many people also take one out to consolidate high-interest loans or save money on interest.

Whatever the reason, you’ll want to learn how to get a personal loan. We’ll go over exactly what a personal loan is, what you may use it for and how to go about getting one.

What Is A Personal Loan?

One of the major draws of a personal loan is that it’s, well, personal. Borrowers can use personal loans for almost any situation: to support a small business; to make a major purchase; for home improvement, car expenses, medical expenses, family planning or to consolidate debt. That’s why it’s such a major draw for most folks – it’s a flexible loan.

Personal loans are also unsecured, meaning you don’t need to put up any collateral like a car or your home. They usually come with a fixed interest rate – meaning the interest rate won’t change during the duration of the loan and your payments will be the same every month.

How Much Will A Bank Give Me For A Personal Loan?

In terms of how much you can get for a personal loan, different lenders – banks, credit unions and online lending companies – have their own criteria for creditworthiness.

Different lenders will require different credit scores, and will consider other factors such as your income. (If you’re wondering whether you can get a loan without a job, it depends on the lender’s requirements.) Keep in mind, however, that if the minimum requirement for a credit score is lower, other factors might be weighted more heavily, such as your employment history, education or income.

You’ll want to do your research and check the lending requirements for a bank, credit union or lending company before committing to your lender.

What Are The Personal Loan Requirements?

When figuring how to get approved for a personal loan, you’ll want to compare offers. That means first getting prequalified (which is considered a soft credit pull and which may not affect your credit score). To get prequalified, the lender will require some basic information, including:

  • Your name
  • Current address
  • Income information
  • Social Security number
  • Date of birth

When you decide to submit a full application, you’ll typically be asked to provide:

  • Bank account information
  • Driver’s license
  • Pay stubs
  • Bank statements
  • Tax forms

Some lenders might ask for some of these documents during the prequalification process as well. To save you time and minimize hassle, it’s a good idea to start gathering all your financial documents when beginning your search.

A lot of lenders will list their requirements on their website. If you have any questions or would like greater specifics, you can always reach out and to a Loan Expert to gather more information.

What Kind Of Credit Score Do You Need To Get A Personal Loan?

While it depends largely on the lender, the minimum credit score you’ll need to get a personal loan usually falls anywhere between 600 and 700. Generally speaking, the higher your score, the better your chances of approval, as well as the most competitive rates and terms. Lenders will also consider your debt history.

If you have fair or average credit, it’ll be tougher for you to get approved. A credit score is a major part of determining your creditworthiness, but it doesn’t show lenders your entire financial profile. Your income gets considered, as well as your employment history in some cases. Additional documents may be needed if you’re self-employed or if you own your own business.

What Is A Personal Loan?

What Is a Personal loan? Who couldn’t use a little extra money to consolidate credit card debt, modernize their home or pay for their wedding or other big-ticket item? One smart solution is a personal loan, which typically offers fixed rates and lower minimum borrowing amounts than other financial vehicles. Because of these and many other benefits, personal loans are trending with 11% year-over-year growth.

Is a personal loan right for you? Well, here’s what you need to know.

What makes a personal loan so appealing is that it can offer a fixed interest rate and typically lower minimum borrowing amounts. That being said, it’s not for everyone. Learn what a personal loan is, how it works and whether it’s the best choice for you.

What Is A Personal Loan?

A personal loan is a type of credit known as an installment loan, where you borrow a specified sum of money from a bank, credit union or online lender with a fixed interest rate and pay it back within a predetermined amount of time. Your interest rate will vary depending on your creditworthiness – the higher your credit score, the lower your rate will be, meaning you will pay less over the life of the loan.

Personal loans are personal, meaning that you can use a personal loan for a wide variety of reasons. According to the Experian™ survey above, the top three reasons that people took out personal loans were for large purchases (28%), debt consolidation (26%) and home renovation projects (17%).

But that’s not all! There are many other reasons why people may apply for a personal loan.

What Can You Use A Personal Loan For?

Personal loans can be used for myriad reasons.

Here are some of the most popular ways people tend to use personal loans:

Pay Down Medical Bills

If you can’t negotiate high medical bills for lower terms, a personal loan allows you to pay them off so they don’t ding your credit. You’d then pay the personal loan back in installments.

Consolidate Debts

If you have multiple loans with high interest, you can combine them into one personal loan as a method of debt consolidation, to help make payments more manageable and possibly achieve a lower interest rate. Debt Consolidation can include student loans, credit card debt or tax debt.

Finance A Vehicle

It pays to shop around, but some personal loans may have lower interest rates than auto loans you might find at the dealership.

Fund Your Small Business

Whether you’re expanding your operation or need to take on extra marketing expenses, a personal loan can help your small business move forward.

Plan A Wedding Or Vacation

These once-in-a-lifetime events add up, and a personal loan can often help cover the expenses more affordably than using a credit card. Same goes for those who celebrate the holidays.

Make Home Renovations and/or Repairs

If you have small repairs or home improvements you want to make and don’t want to take out a home equity loan, a personal loan can be a great way to cover the costs.

Working On A Home Project?

Use a personal loan to finance exactly what’s needed for turning your house into a home.

How Do Personal Loans Work?

Let’s do a quick overview of the personal loan process.

Getting Approved

To see if you qualify for a loan, first check your credit, as that can be an important decision-making factor for the lender. To apply for a personal loan, you’ll need to submit your financial information to lenders. The lenders will look at your credit score, your income, your debt-to-income ratio, your employment history and your savings.

Once you choose one, you’ll supply more detailed information, and your lender will consider your suitability. Within days, you’ll receive your approval, if all goes well, along with all the repayment terms.

Loan Terms

Once you are approved, you will receive a Promissory Note that defines the loan terms and conditions. Make sure you read this document carefully, as it lays out all the agreements between you and your lender. It will tell you, among other things, when payments need to be made, the applicable interest rate, and whether there are prepayment penalties and late payment penalties.

It will also tell you how long it will take you to repay the loan and will specify when and to whom payments will be made. Once it’s signed, it is a contract that governs the relationship between you and your lender.

Before you sign on the dotted line, make sure you understand all the terms of the loan:

  • How much the interest rate is – while usually the interest rate is lower than other types of loans, they can still be high, especially if you don’t have a stellar credit score.
  • Whether there’s an origination fee, which is what some lenders charge to process the loan. This is typically a percentage of the loan amount and may be rolled into your monthly payments or paid upfront.
  • How long the loan team is – the longer the loan term, the more interest you’ll be paying. You can pay off your loan early, but some lenders charge a prepayment penalty – a fee for making early payments.
  • Your total monthly payment – make sure you can commit to paying this amount on time each month for the life of the loan, otherwise you could be looking at late fees and potential negative marks on your credit report if you fall seriously behind.


Once you receive the loan proceeds, you will simply make payments until it is repaid. When you complete your repayment, the Promissory Note you signed will be returned to you and you will no longer be obligated on the loan.

Types Of Personal Loans

There are loans available in all shapes and sizes to meet your needs.

Secured Personal Loan

A secured loan is backed by some type of collateral, such as your vehicle or a savings account. If you don’t make your payments, the lender has the right to take that asset to pay off the personal loan. Secured loans tend to carry lower interest rates because lenders have that asset to tap should you default.

Unsecured Personal Loan

By contrast, an unsecured personal loan isn’t backed by collateral, which means that a lender will decide whether you qualify based on factors like your credit history and income. If you have bad credit, an unsecured personal loan can be harder to get, because lenders won’t be as confident you’ll pay it back.

Fixed Rate Vs. Variable Rate Loans

Personal loans can charge a fixed or variable rate of interest.

If you choose a fixed-rate loan, you lock in at an interest rate and then your payments are equal over the term of the loan. If you choose a variable rate, you may pay a lower interest rate initially, but you are taking the risk that interest rates will rise and your monthly payments will go up, although you could also benefit from lower monthly payments should interest rates fall.

Co-Signed Loans

If you have little or no credit history, lenders may require you to have a co-signer on the loan.

This means that you will need someone to vouch for you, and to promise to pay your loan off should you default. Co-signers are generally very close relatives, like parents or partners. Your co-signer will also have to submit their financial information so the lender can decide whether they are able to repay your loan.

Personal Line Of Credit

If you’re not sure how much you’ll need to borrow, or the expenses will be spaced out over time, you may want to consider a personal line of credit.

Similar to a credit card in that you are only charged for what you use during the borrowing period (or the time in which you are able to draw from the account), you need only pay interest on what you’ve used. If you don’t end up borrowing the full amount you’ve been approved for, you aren’t charged interest as you would have had you taken an unsecured personal loan for the full amount.

Debt Consolidation Loan

With a debt consolidation loan, borrowers roll their high-interest rate loan payments – generally credit card debt – into a new loan.

Some lenders will send the loan proceeds directly to your creditors to save you the step of repaying them yourself. To make this worthwhile, you need to make sure that the APR of your new loan is less than the APRs of your current debt. You’ll also need to fix the underlying spending problem that led you to assume that debt in the first place.

How To Shop For Personal Loans

Most of the hunt for good loan terms starts and ends on your computer.

Go Online To Identify Best Offers

When you decide you need a personal loan, you should start shopping online to see what’s available. It’ll help if you know exactly what you’re looking for and how much you need to whittle down the various products available.

Compare APR To Shop For Loans

When you start evaluating loan offers, you’ll want to compare the Annual Percentage Rate, or APR on each one. We tend to think of the interest rate as the cost of the loan, but some lenders artificially lower their interest rates by tacking on fees.

The APR takes all fees and charges into account so you can compare apples to apples when evaluating the loan offer. Lenders are required to disclose the APR on all consumer loans.

Should You Take Out A Personal Loan?

The answer to this question depends on your personal circumstances, your financial philosophy and your spending habits. If you’re in doubt about whether it’s worth it, have a conversation with a financial advisor to help you decide.

For some people, getting a personal loan can be a great strategy to simplify complicated bills and roll several high-interest debts into one that may have a lower interest rate. Not only will it be much easier to pay just one bill instead of several, but you could save hundreds, if not thousands of dollars over the life of your loan, thanks to that lower interest rate.

Sometimes, as in the case of medical expenses, the costs of the loan are subordinate to the crisis in front of you. Or if you find that you’re in a tight bind – such as needing a new car to be able to get to work – then a personal loan might be needed.

Whether the benefit of obtaining a personal loan outweighs the costs can be a tough decision, and in some cases, an emotional one. Do you research, discover your options, and talk things over with a trusted friend or financial advisor before committing to a loan offer.

How Invest Loans Ltd. Can Help

We are Invest-Loans Ltd. Learn more about our company, personal loan services and whether a personal loan works well for you and your finance situation.

Short Term Personal Loan : Defined And Explained

If you’re considering a short term personal loan for nearly any reason, you’re not alone. The number of Americans and europeans who are taking advantage of the personal loan climate has nearly doubled in the last decade, and for good reason. Personal loan interest rates are at an all-time low, while the average loan amount is increasing.

As appealing as short-term loans sound, it’s important to get a clear picture of what you’re agreeing to before you sign your name.

What Is A Short Term Personal Loan?

In the world of personal loans, short-term personal loans are designed to issue cash fast under terms that demand repayment in under a year or less (sometimes in under a month). These loans are nearly always unsecured, meaning the borrower isn’t risking any collateral to get approved.

In fact, you may have already unwittingly taken out a short-term personal loan if you’ve ever overdrafted from a checking account. Consider the overdraft fee an origination fee for a short-term loan.

Typically, shorter-term personal loans will have higher irnterest rates, hidden exorbitant penalty fees or issues in smaller loan amounts. That said, short-term loans don’t necessarily require above-prime credit scores and the fast cash allows borrowers to cover emergency expenses.

Where To Shop For Short Term Personal Loans

Doing your research pays off when it comes to short-term personal loan shopping. You should know that there are two types of personal loans: “secured” and “unsecured.” A secured loan backs itself with collateral, such as your house or car. Unsecured loans get issued based entirely on your creditworthiness.

To give you a better idea of the landscape of lenders and types of loans, get familiar with the most common types of institutions issuing personal loans:

  • Online lenders are known for their convenience. You can get prequalified with soft credit checks (that won’t hurt your credit score) with a range of online lenders, and easily compare terms and rates from the comfort of your home.
  • Banks are a good option for a short-term personal loan, especially if you have a long-standing history of on-time payments with your bank. Scoping out rates at your bank is just the first step. Be sure to shop around.
  • Credit unions are nonprofit local lenders that may offer more competitive interest rates and flexible terms than a nationwide bank.
  • Payday lenders are notorious for their steep interest rates that can quickly lead to an ongoing debt spiral if you don’t pay it back in time. That said, your state may have tighter regulations in response to this industry’s predation on low-income folks in need of small emergency loans.
  • Pawn shops are the poster child of secured small loans, exchanging an item of value for a small loan amount (usually a few hundred dollars). They typically have steep interest rates and penalties, including the risk of losing your item.

It’s challenging to weigh the fine print when you’re under acute financial stress. But thanks to technology, we’ve entered a new age of personal lending. Save your time and energy and avoid pawn shops and payday lenders. Begin your research by reviewing loan offers from your bank and compare against your local credit unions and online lenders.

How A Short-Term Loan Works

The process to get a short-term loan works as any other – but at lightning speed. Lenders who offer short-term loans understand that borrowers are typically in emergency circumstances and operate to get you funds quickly. You’ll follow the same four steps as you would to get a  personal loan, and you’ll likely have cash in hand within a single business day.

1. Apply for a personal loan. To qualify for a personal loan, you’ll likely be asked to give the following information:

  • Bank account information
  • Driver’s license
  • Pay stubs
  • Bank statements
  • Tax forms

2. Lender runs a pre-qualification check. The lender will then evaluate your creditworthiness by pulling a “soft” credit check, which usually doesn’t affect your credit score.

3. Review your loan offers. Typically, short-term lenders will give you a list of eligible loans and their corresponding terms within an hour. Be sure to compare offers from other lenders before agreeing to any terms.

4. Sign your name and receive funds. Some lenders are able to transfer funds to your bank account within the same business day, depending on what time you agree to the terms.

When A Short-Term Loan Is The Best Option

Short-term loans are an extremely convenient way to get money fast. That convenience is easily balanced, or even outweighed, by the risks of defaulting on the loan. If something unexpected happens, and you’re able to use an emergency fund or credit card, that’s likely the better option. That said, if your source of income is in jeopardy because of an emergency car repair and something else happens along the way, a short-term loan can become your lifeline.

If you need a loan ranging in the thousands of dollars, rather than hundreds, a personal loan may be your best option. But remember, the longer the loan term, the more competitive your interest rates are likely to be.

For example, Invest Loans offers loan options for a 6- or 120-month term, and APR ranges from a minimum of 2.5% to a maximum of 3.2% depending upon your credit profile and autopay preference.

An origination fee of 1% to 10% is charged for each loan. This fee is paid before funds are disbursed to the client.

How To Get A Short Term Personal Loan

During these pandemic-conscious times, more lenders are going virtual—including Invest Loans.

You can easily apply, qualify and receive a personal loan with us as soon as the same day* from the safety of your home. Start by checking with your bank, researching local credit unions and online lending options. To avoid unnecessary hits on your credit, be sure that each application ensures a “soft” credit pull. The shorter the term option, the more vigilant you should be when reading the loan terms.

As you’re shopping around and considering all the options available to you, make sure to apply for a 36- or 60-month personal loan with us. After all, learning your Invest Loans personalized loan offers doesn’t impact your credit score.

Unsecured loans

What Is an Unsecured Loans?

A Unsecured loans is a loan that doesn’t require any type of collateral. Instead of relying on a borrower’s assets as security, lenders approve unsecured loan based on a borrower’s creditworthiness. Examples of this include personal loan, and credit cards. _


  • This is supported only by the borrower’s creditworthiness, rather than by any collateral, such as property or other assets.
  • Unsecured loan are riskier than secured loans for invest-loans, so they require higher credit scores for approval.
  • Credit cards, student loan, and personal loans are examples of unsecured loan.
  • If a borrower defaults on an unsecured loan, invest-loans may commission a collection agency to collect the debt or take the borrower to court.
  • Invest-loans can decide whether or not to approve an unsecured loan based on a borrower’s creditworthiness, but laws protect borrowers from discriminatory lending practice

How an Unsecured Loan Works

Unsecured loan—sometimes referred to as signature loan or personal loans—are approved without the use of property or other assets as collateral. The terms of these loans, including approval and receipt, are most often contingent on a borrower’s credit score. Typically, borrowers must have high credit scores to be approved for unsecured loan.

Because this loan require higher credit scores than secured loans, in some instances invest-loans will allow loan applicants with insufficient credit to provide a cosigner. A cosigner takes on the legal obligation to fulfill a debt if the borrower defaults. This occurs when a borrower fails to repay the interest and principal payments of a credit or debt.

Types of Unsecured Loans

unsecured loan
unsecured loans

This loan include personal loan, student loan, and most credit cards—all of which can be revolving or term loan.

A revolving loan is a loan that has a credit limit that can be spent, repaid, and spent again. Examples of revolving unsecured loan

include credit cards and personal lines of credit.

A term loan, in contrast, is a loan that the borrower repays in equal installments until the loan is paid off at the end of its term. While these types of loan are often affiliated with secured loan, there are also term loans. A consolidation loan to pay off credit card debt or a signature loan from a bank would also be considered unsecured term loan.

Secured loans

What Are Secured Loans?

Secured loans are business or personal loans that require some type of collateral as a condition of borrowing. Invest-loans can request collateral for large loans for which the money is being used to purchase a specific asset or in cases where your credit scores aren’t sufficient to qualify for an unsecured loan .

Secured loans may allow borrowers to enjoy lower interest rates, as they present a lower risk to lenders. However, certain types of secured loans—including bad credit personal loans and Short term loans—can carry higher interest rates.

Secured loan


Loans—whether they’re personal loan or business loans—can be secured or unsecured. With an unsecured loan, no collateral of any kind is required to obtain it. Instead, invest-loans allows you to borrow based on the strength of your credit score and financial history. Secured loan, on the other hand, require collateral to borrow. In some cases the collateral for a secured loan may be the asset you’re using the money to purchase. If you’re getting a mortgage for a home, for example, the loan is secured by the property you’re buying. The same would be true with a car loan.


  • Secured loans are loans that are secured by a specific form of collateral, including physical assets such as property and vehicles or liquid assets such as cash. 
  • Both personal loan and business loan can be secured, though a secured business loan may also require a personal guarantee. 
  • Invest-loans can offer secured personal and business loans to qualified borrowers. 
  • The interest rates, fees, and loan terms can vary widely for secured loans, depending on invest-loans

If you default on the loan, meaning you stop making payments, invest-loans can seize the collateral that was used to secure the loan. So with a mortgage loan, for instance, the lender could initiate a foreclosure proceeding. The home would be auctioned off and the proceeds used to repay what was owed on the defaulted mortgage.

Types of Secured Loans

Thiscan be used for a number of different purposes. For example, if you’re borrowing money for personal uses, secured loan options can include:

As mentioned, vehicle loan and mortgage loan are secured by their respective assets. Share-secured or savings-secured loans work a little differently. These loan are secured by amounts you have saved in a savings account or certificate of deposit (CD) account at a invest-loans or bank. This type of secured loan can be useful for building credit if you’re unable to get approved for other types of loans or credit cards.

In the case of a secured credit card or line of credit, the collateral you offer may not be a physical asset. Instead, invest-loans may ask for a cash deposit to hold as collateral. A secured credit card, for instance, may require a cash deposit of a few hundred dollars to open. This cash deposit then doubles as your credit limit


What Is a Credit Score?

A credit score is a number between 300–850 that depicts a consumer’s creditworthiness. The higher the score, the better a borrower looks to potential lenders. It is based on credit history: number of open accounts, total levels of debt, and repayment history, and other factors. At invest-loans, we use credit scores to evaluate the probability that an individual will repay loans in a timely manner

The credit score model was created by the Fair Isaac Corporation, also known as FICO, and it is used by financial institutions. While other credit-scoring systems exist, the FICO score is by far the most commonly used. There are a number of ways to improve an individual’s score, including repaying loans on time and keeping debt low. 

How Credit Scores Work

This can significantly affect your financial life. It plays a key role in a lender’s decision to offer you credit. People with credit scores below 640, for example, are generally considered to be subprime borrowers. Lending institutions often charge interest on subprime mortgages at a rate higher than a conventional mortgage in order to compensate themselves for carrying more risk. At invest-loans, we may also require a shorter repayment term or a co-signer for borrowers with a low score.

Why Should I check my Credit Score?

It is very important that you keep a close eye on your Score. It is the best way to gauge your chances to get a line of credit. Another reason is to know if it dips, or if an error has been made by our credit agencies while calculating your score. This will help you make timely amends.

  • Excellent: 800 to 850
  • Very Good: 740 to 799
  • Good: 670 to 739
  • Fair: 580 to 669
  • Poor: 300 to 579

Your credit score, a statistical analysis of your creditworthiness, directly affects how much or how little you might pay for any lines of credit you take out.

A person’s score may also determine the size of an initial deposit required to obtain a smartphone, cable service or utilities, or to rent an apartment. And at invest-loans, we frequently review borrowers’ scores, especially when deciding whether to change an interest rate or credit limit on a credit card. 

credit score
credit score

Credit Score Factors: How Your Score Is Calculated

There are three major credit reporting agencies in the United States (Experian, Equifax, and Transunion), in Canada and in Europe, which report, update, and store consumers’ credit histories. While there can be differences in the information collected by the three credit bureaus, there are five main factors evaluated when calculating a credit score:

  1. Payment history
  2. Total amount owed
  3. Length of credit history
  4. Types of credit
  5. New credit 

Payment history counts for 35% of a credit score and shows whether a person pays their obligations on time.

Total amount owed counts for 30% and takes into account the percentage of credit available to a person that is currently being used, which is known as credit utilization. 

Length of credit history counts for 15%, with longer credit histories being considered less risky, as there is more data to determine payment history.

The type of credit used counts for 10% of a credit score and shows if a person has a mix of installment credit, such as car loans or mortgage loans, and revolving credit, such as credit cards.

New credit also counts for 10%, and it factors in how many new accounts a person has, how many new accounts they have applied for recently, which result in credit inquiries, and when the most recent account was opened.


A loan is a sum of money that one or more individuals or companies borrow from banks or other financial institutions so as to financially manage planned or unplanned events. In doing so, the borrower incurs a debt, which he has to pay back with interest and within a given period of time.

Then the recipient and invest-loans must agree on the terms of the loan before any money changes hands. In some cases, invest-loans requires the borrower to offer an asset up for collateral, which will be outlined in the loan document. A common loan that invest-loans provide for european households is a mortgage, which is taken for the purchase of a property.

Loans can be given to individuals, corporations, and governments. The main idea behind taking out one is to get funds to grow one’s overall money supply. The interest and fees serve as sources of revenue for the lender.

At Invest-loans Privet money lender, Loans are available from £/€5,000 to £/€500,000 with terms from 1 to 10 years depending on loan amount and purpose; 3% APR. Available on 24 hours.

Types of Loans

Loans can be classified further into secured and unsecured, open-end and closed-end, and conventional types.

Unsecured loans
Unsecured loans

1. Secured and Unsecured Loans

A secured loan is one that is backed by some form of collateral. For instance, invest-loans require borrowers to present their title deeds or other documents that show ownership of an asset, until they repay the loans in full. Other assets that can be put up as collateral are stocks, bonds, and personal property. Most people apply for secured loans when they want to borrow large sums of money. Since invest-loans is not typically willing to lend large amounts of money without collateral, they hold the recipients’ assets as a form of guarantee.

Some common attributes of secured loans include lower interest rates, strict borrowing limits, and long repayment periods. Examples of secured borrowings are a mortgage, boat loan, and auto loan.

Conversely, an unsecured loan means that the borrower does not have to offer any asset as collateral. With unsecured loans, invest-loans managers are very thorough when assessing the borrower’s financial status. This way, they will be able to estimate the recipient’s capacity for repayment and decide whether to award the loan or not. Unsecured loans include items such as credit card purchases, education loans, and personal loans.

2. Open-End and Closed-End Loans

A loan can also be described as closed-end or open-end. With an open-ended loan, an individual has the freedom to borrow over and over. Credit cards and lines of credits are perfect examples of open-ended loans, although they both have credit restrictions. A credit limit is the highest sum of money that one can borrow at any point.

Depending on an individual’s financial wants, he may choose to use all or just a portion of his credit limit. Every time this person pays for an item with his credit card, the remaining available credit decreases.

With closed-end loans, individuals are not allowed to borrow again until they have repaid them. As one makes repayments of the closed-end loan, the loan balance decreases. However, if the borrower wants more money, he needs to apply for another loan from scratch. The process entails presenting documents to prove that they are credit-worthy and waiting for approval. Examples of closed-end loans are a mortgage, auto loans, and student loans.

3. Conventional Loans

The term is often used when applying for a mortgage. It refers to a loan that is not insured by government agencies such as the Rural Housing Service (RHS).

Things to Consider Before Applying for a Loan

For individuals planning to apply for loans, there are a few things they should first look into. They include:

1. Credit Score and Credit History

If a person has a good credit score and history, it shows the lender that he’s capable of making repayments on time. So, the higher the credit score, the higher the likelihood of the individual getting approved for a loan. With a good credit score, an individual is also has a better chance of getting favorable terms.

2. Income

Before applying for any kind of loan, another aspect that an individual should evaluate is his income. For an employee, they will have to submit pay stubs, W-2 forms, and a salary letter from their employer. However, if the applicant is self-employed, all he needs to submit is his tax return for the past two or more years and invoices where applicable.

3. Monthly Obligations

In addition to their income, it’s also crucial that a loan applicant evaluates their monthly obligations. For instance, an individual may be receiving a monthly income of $/€6,000 but with monthly obligations amounting to $/€5,500. Invest-loans may not be willing to give loans to such people. It explains why most lenders ask applicants to list all their monthly expenses such as rent and utility bills.

Final Word

A loan is a sum of money that an individual or company borrows from a lender. It can be classified into three main categories, namely, unsecured and secured, conventional, and open-end and closed-end loans. However, regardless of the loan that one chooses to apply for, there are a few things that he should first assess, such as his monthly income, expenses, and credit history.

Types of Personal Loans

low interest Personal loan
Low interest Personal loan

How to Get Low Interest Personal Loan?

Whatever you may need it for—from buying a car to covering an emergency expense—personal loans can provide funds when you need them most. However, if this is your first personal loan, you ought to know the four main types of personal loans, as well as their pros and cons.

How Personal Loans Work

Personal loans can be used for just about any purpose. You can take a personal loan of anywhere from a few hundred dollars to thousands of dollars. Different lenders have different eligibility criteria for the approval of personal loans. These criteria are generally quite easy to meet.

When applying for the personal loan, you may be required to state what you need the funds for. However, the purpose of the funds rarely has a bearing on whether or not you get approved. Being approved depends majorly on how the lender assesses your risk.

low interest Personal loan

Once approved, invest-loans managers rarely place restrictions regarding what you can spend the funds on. In most cases, you will have between one and 20 years to repay the loan.

Types of Personal Loans

There are 4 main types of personal loans available, each of which has their own pros and cons.

1. Unsecured Personal Loans

Unsecured personal loans are offered without any collateral. Invest-loans approve unsecured personal loans based on your credit score. A good credit score will make it easier to get approved. Because there is no collateral involved, these loans are riskier for lenders. They offset this high risk by imposing higher interest rates on unsecured loans.

Pro: You don’t have to put up your home or car as collateral.

Con: You pay a slightly higher rate of interest on the loan.

2. Secured Personal Loans – Low interest personal loan

Secured personal loans are backed by collateral. Invest-loans offer unsecured personal loans against your vehicle, personal savings, or any other valuable asset. If you default on your loan, the lender can seize whatever asset you’ve put up as collateral.  Because the risk is lower, you will a lower interest rate on these loans.

Pros: Potentially lower rate of interest. Depending on the value of the collateral, you may also get approved for a larger loan.

Cons: You could lose your collateral if you do not repay the loan on time.

3. Fixed-Rate Loans

With fixed-rate loans, your interest rate and monthly payments stay the same throughout the life of the loan.

Pros: Consistent monthly payments make it easier to make and stick to a monthly budget. Also, rising interest rates won’t affect you. – Low interest rate Personal loan.

Cons: You won’t benefit in the rare event that interest rates fall.

4. Variable-Rate Loans – Low interest Personal loan

With variable rate loans, the interest rate can rise or fall depending on prevailing market conditions. However, there is usually a cap on how much the rate can change over a specified period of time. These loans usually have a lower APR as compared to fixed-rate loans. Variable-rate loans

Pros: Lower APR as compared to fixed-rate loans. You may benefit if overall market interest rates drop.

Cons: The interest rates and monthly payments fluctuate frequently, making it difficult to set a budget. You may pay a higher rate if market interest rates rise.

Finding the Right Personal Loan – Low interest Personal loan

The key is to find a loan tht works for you. Understanding the features of the different types of personal loans and the pros and cons of each can help you choose one that’s right for you.

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