Homeowners typically take out a personal loan from a bank or an online marketplace. There are benefits unique to each. Personal loans give you your money quickly, sometimes within a few days. When you decide to go with a bank or credit union, they will most likely offer you a fixed interest rate, meaning that the interest rate will never go up or down until the end of the agreed upon term. If you go through a bank, you can set up direct deposits and be sure to never miss a payment. Usually, banks offer a long payback time. But be careful, bank loans are filled with fine print and may even penalize you if you pay back your loan before it’s due on paper.
No matter what, when you are shopping around for the best deal, you need to consider the full cost of a loan and be wary of rates, origination fees, closing costs, and other minor charges that are easily overlooked.
Online platforms are similar to banks in many ways. They are an increasingly popular option because of the variety of marketplaces available and their ease of access. Some may offer you up to $35,000 in a matter of days. However, popular platforms like ‘Prosper’ require you to have a good credit score, around 650 or higher. Also, these online platforms usually have a shorter payback period when compared to banks.