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What is an Unsecured Personal Loan

One of the easiest and least painful ways to borrow cash quickly to cover your expenses is through an unsecured personal loan. Whether you’re looking to buy a pricey appliance, pay off a medical bill, or consolidate credit card debt, here are the basics about unsecured personal loans in San Antonio, TX

Differences from traditional bank loans

A traditional bank loan will typically require a credit check and some form of down payment or collateral. An unsecured personal loan requires neither. The amount of cash the lender is willing to offer is determined by the lender based off the borrower’s income. Approval time can also be lengthy when borrowing from a bank.

Differences from payday loans

A payday or title loan generally provides quick approval, but it also has a shorter term with higher interest and payments that may be more difficult for the borrower to meet.  While payday loans do not require credit checks, they also do not report to credit agencies. A lender offering a personal loan will still report to credit agencies, despite not checking the borrower’s credit. This is actually a good thing, as it can help build or re-establish credit. Unsecured personal loans also provide a longer term with lower interest rates.

What you need to prepare

To apply, you’ll need to be 18 years of age or older with a valid driver’s license or ID, social security number, and proof of residence and income.

How you pay it back

Unsecured personal loans are paid back in equal monthly installments over an agreed-upon amount of time. A portion of the amount borrowed (principal) plus a portion of the lender’s fee (interest) is included in each monthly payment. The borrower must make full payments, and they must make them on time. Once the final payment is made, nothing further is required from the borrower, and they are free to apply for loans in the future if they wish.

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