Learn about secured and unsecured personal loans from TVFCU and how they may be right for you!
Hello and welcome back to the blog here at TVFCU! Here, we like to make the process of interacting with your financial institution as easy as we can. To continue that effort, today we wanted to talk about personal loans and why TVFCU is a great choice for obtaining one!
What is a Personal Loan?
A personal loan is money borrowed from a lender that can be used for just about any purpose, like making a large purchase or covering the cost of a major expense. That brings us to why choose TVFCU for your personal loan. Well, we have some of the best rates, check them out!
Types of Personal Loans
There are several types of personal loans you can attain from financial institutions. However, they fall into two major buckets (there are others but these will be our focus today) - secured and unsecured. We touched briefly on secured loans before, but we’ll dive into a little more detail here.
Unsecured Personal Loans
Unsecured personal loans make up the majority of personal loans nationwide. Since they are unsecured, that means you don’t need any collateral to qualify for the loan. With an unsecured personal loan, you’ll receive a lump sum of cash, then repay the loan over time with a fixed monthly repayment timeline.
The benefits of these loans are pretty apparent. You don’t need to have collateral to qualify for receiving the loan, and you know your exact repayment amount and timeline. Additionally, the loan could be approved quicker because the step of evaluating assets is eliminated.
Secured Personal Loans
That brings us to secured loans, which we touched on briefly in our recent mortgage blog post. However, if you missed that, let’s recap that information. A secured personal loan requires you to put up collateral to qualify. You would use an asset, like a vehicle, boat or home as collateral rather than cash. If you fail to repay or fall behind, the lender may be able to seize the assets you listed as collateral.
Secured personal loans do have benefits, though. Since you are also taking on some risk by putting up an asset for collateral that the lender would approve, the amount of money you can get from them tends to be larger. Also, you may be able to get a lower interest rate and/or a longer repayment period, reducing the total amount you pay in comparison. You can potentially also qualify for tax deductions for interest paid on certain loans, like mortgages (remember, mortgages are a type of secured personal loan).
Get in Touch!
Acquiring a personal loan can lead to a few questions. Get in touch with us at TVFCU, we’d be happy to help! And remember, here at Tonawanda Valley Federal Credit Union we have some of the best rates! You can follow along with our blog where we’ll share posts like this one here and more going forward. You can give us a call at 585-343-5627 or 800-722-8224, or by reaching out via our contact form.