Tips to get a personal loan for the holidays

Personal loans customarily gain popularity throughout the holiday season. But this year, an unsecured loan for the holidays could be a little harder to find. Your credit score will make a difference on that account. Low interest rates are good for borrowers but not very exciting for banks, which would rather save and invest than lend cash right now.

Personal loans are difficult to get sometimes

Since banks are borrowing from the Federal Reserve with zero percent interest rates, it may be harder to obtain a personal loan for the holidays. It’s a risk that banks don't want to take when it comes to lending mortgage loans, installment loans or personal loans. They'd rather get a profit from investing the money. A prime example of this is the massive purchase of United States of America Treasury bonds by banks in 2010. Even though banks have been lent $127 billion by the Treasury, banks lent much less than that. In fact, only $68.5 billion was lent. The Fed ends up lending the banks money with almost zero interest just to have cash lent back at a higher rate of interest because of treasury purchases.

Expected unsecured loan search outcome

Banks will only loan personal loans to those with really good credit scores for the holidays due to all this. A good credit rating can get you 12 to 18 percent as an average rate of interest. This is on most personal loans though. But if your credit is less than stellar these days, it does not hurt to start with the financial institution or credit union where you put your cash. An established relationship may increase your probabilities. If that doesn’t work, numerous loan providers offer unsecured loans online. Credit scores that are low can make interest rates go up. Up to 20 percent could be the new interest rate.

Seasonal personal loan not the only choice available to you

Peer-to-peer lending is another option that will give you less of a rate of interest on personal loans. Peer-to-peer lending takes the bank acting as middleman out of the equation. On peer-to-peer lending websites, consumers lend money to each other. Peer-to-peer lending sites can often lead you to lower interest rates. This is because loan providers are biding in order to do this. Loans from $25 to $25,000 are made by loan companies who pick their consumer. Getting a personal unsecured loan for the holiday seasons from a fellow consumer could land a competitive rate of interest without a perfect credit rating.

Info from

Credit Loan

creditloan.com/blog/2010/11/30/personal-loans-may-get-harder-to-come-by/

Forbes

forbes.com/forbes/2010/1220/investing-lending-club-credit-cards-personal-loans-for-fun.html

Subprime Blogger

subprimeblogger.com/2010/12/01/bad-credit-unsecured-personal-loans-gain-in-popularity-as-christmas-shopping-season-approaches/