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Personal loans of May 2022 in the United States

Apply personal loans in the US from companies verified by our specialists. On 27.05.2022 you have access to 3 loans with a rate of 0% per day. Increase your chances of getting money — fill out a multi-application with a free credit rating check.

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Personal loans of May 2022

What Is a Personal Loan?

Definition and Introduction to Personal Loans

The definition of a personal loan is simple. It's a sum of money you can borrow for different needs without being concerned about the interest rate. On average, they are on the lower side, and of course, that definition doesn't tell the whole story. However, a personal loan can come in multiple different forms. We will discuss the types of loans below and other information you should consider before choosing the best loan.

Loan Purpose, Different Types of Loans

The primary purpose of a personal loan is to aid you in acquiring something you want that you otherwise wouldn't be able to afford. A personal loan can come from various sources, including a bank, credit union, or online lender. The money you lend needs to be repaid over a particular time, usually with a set interest rate. Before signing the loan documents, the timeframe and other loan terms are agreed upon between the lender and borrower.

A personal loan can cover several types of expenses, including such credit usage:

  • Medical costs

  • Vacation/travel

  • General expenses

  • Unforeseen expenses

Since loans have different purposes, they differ vastly from other types of loans, including, for instance, mortgages or student loans.

Some lending companies, especially online lenders, choose to limit how you can use the money borrowed. For instance, they prevent you from covering college tuition since they must use different loan payment terms for these loans.

Example of a Personal Loan

In recent years, personal loans have become a popular form of borrowing because of the lower interest rates and accommodating repayment stipulations. It's vital to understand the loan terms regarding what you will pay. The best way to aid you in understanding the personal loan terms is to give you an example of a personal loan.

Let's presume you want to get a personal loan since your vehicle broke down, and you need to have it fixed straight away. Based on the damages, the repair cost can be as high as $3,000 to $4,000. Let's assume the worst and that your loan would be for $3,000. The annual percentage rate is set at 8%. Your loan needs to be paid off in 36 months so that the payment would be equal to $94 per month. The total interest paid over the 36 months would be $384.33.

If you were to conduct additional research and find one or several lenders with more lucrative rates, you would be able to spend less. For instance, with a fixed interest rate of 5% instead of 8%, you'd be able to save $147.47 in interest.

Matching personal loan rates and repayment terms up against each other is necessary to make the most out of the personal loan option. A simple online loan calculator is your best friend here because you can quickly figure out the most economically beneficial option for you.

What Are the Major Types of Personal Loans?

Personal loans are typically split into two different types: secured and unsecured.

Secured loans

A secured personal loan mandates some collateral, typically your vehicle, house, another high-value item or with cash assets, including a savings account or deposit slip. If you default on the loan, the lender could repossess the collateral. That is a big reason why you should take out a secured loan only after carefully considering the pros and cons of obtaining one. In the event of a default, your credit score and financial standing could take a significant hit due to the loss of the collateral, and if that happens, you may also find it hard to get a loan in the future.

Unsecured loans

An unsecured personal loan mandates no collateral to secure the funds. Banks, credit unions, and online lenders offer secured and unsecured personal loans to eligible borrowers. Banks generally regard the latter as the riskier option when compared to the former because there’s no collateral to claim. Due to that, an unsecured loan may come with higher interest rates and strict loan repayment terms. This brand of a loan necessitates a higher credit score to qualify when compared to a secured loan. The lender needs to be sure of your ability to repay the loan on time. Thanks to removing an added risk of non-repayment, as it can rely on your credit score, it can offer you flexible repayment terms and a considerable loan amount.

Additional Types of Personal Loans

We can further divide personal loans into several other forms, including:

Fixed-Rate Loan

With this sort, you are required to pay fixed monthly payments for the entirety of the loan tenure. This loan brand has a constant interest rate, making it a good option for more risk-averse people.

Variable-Rate Loan

Here, personal loan rates are subject to change. A variable-rate loan is a solid option for debtors who want to pay off their dues in a shorter period, as you would be able to adjust the payments to the new rates easily. In the short-term period, it's also doubtful that the interest rates would unexpectedly soar and make it challenging to keep the payments up.

Debt Consolidation Loans

Debt consolidation loan involves merging all of your current loans into one consolidated loan to reduce your total debt and simplify repaying the loan each month. This kind of loan includes increased flexibility and much more control over your finances, including how much money you spend on your debt each month. Thanks to the advantages mentioned above, the chances of late or missed payments are greatly reduced. That, in turn, improves your credit score over time and makes it easier for you to qualify for new loans in the future.

Cosigner Loans, Joint Loans

Joint loans are best fit for individuals that previously failed to qualify for a personal loan by themselves. If a person doesn't have sufficient income or fails to meet other personal loan requirements, it might happen. If you have a cosigner on loan with you, you may be eligible for this personal loan.

How to Apply for a Personal Loan?

First and foremost, you will have to carry out independent research before seeking loan approval. You will have to read the reviews and testimonials of existing borrowers, which can be easily obtained online. You can use our personal loan calculator to study loan details.

When you finally settle on an online lender, follow the steps detailed below.

  1. Find the most satisfying interest rate possible. It's always a wise move to get around hard credit history checks. Carefully read the requirements and determine if you qualify before applying.

  2. Apply. Keep your social security number at the ready. You might be required to submit specific additional documentation, including a tax return.

  3. Wait for loan approval. The timeframe for receiving a response might vary based on the lender. The expected waits are usually between two hours and two business days.

  4. Receive your personal loan funds. Funds transfer usually takes one business day. If your personal loan is approved, the lender will transfer money into your bank account.

What Are the Main Requirements for Getting a Personal Loan?

Different lenders have varying conditions set for credit approval, but more than a few standard components exist. The first is your credit score, which the banks use to gauge lending risk. Understandably, your lender doesn't want to take a chance on someone with a low credit score and risk defaulting on the loan.

Before you find a suitable loan term from a reputable lender, it's essential to familiarize yourself with the most popular stipulations that you will be expected to meet. Knowing what documents to keep at hand will help ease the stress of applying for a personal loan and will fasten the approval process.

Most Common Requirements

Good Credit Score, Responsible Credit History

As mentioned, it's one of the most vital components of getting approved for a loan. A minimal credit score of 300 ensures high enough lending potential, but most lenders set the bar much higher: you will have to have a credit score of above 600 to gain personal loan approval.

Sufficient Income

Loan amounts affect requirements for income in a significant way. The more you borrow, the higher income you need to have. Usually, lenders require a base income of $40,000 a year to obtain a personal loan. You will be requested to present evidence of this amount before approval to avoid fraud and other unlawful activity risks.

Good Debt to Income Ratio

DTI (debt to income ratio) is estimated using a formula that factors the debt and total gross monthly earnings. The higher the percentage is, the lower your risk of default. The required ratio is usually above 35%, but it can be higher depending on the lender.


Occasionally, a lending company will oblige you to have certain forms of collateral to obtain a loan. Cash deposits, a home, or a vehicle can be collateral. If you fall back on your monthly payments or default on a loan, the lender will have the right to repossess the collateral.

Most Common Documentation Needed for Personal Loans

Your lender might ask you to provide documentation that will affirm your ability to pay off your personal loan. The most common documents lenders need to check to lend you money are here.

  • Application. The lender will use the document you submit during the loan application process to verify your eligibility.

  • Proof of identity and residency. Your lender will require two sets of valid identification. You can submit different types of documents for each.

  • Proof of earnings. Most lenders want to see confirmation of income from your employer and your bank account.

Ways to Get a Personal Loan

Thanks to advancements in technology and banking platforms, it is now easier than ever for you to get a loan. You can apply for loans via Finanso® and receive approval the same day.

There are, however, a few things that you need to do before applying for a loan. They include:

  • Reviewing your credit score;

  • Increasing your score to meet the best credit score benefits;

  • Deciding how much money you need to borrow;

  • Undergoing the pre-qualification process to find the most competitive rates.

With that out of the way, you are free to take the most reasonable way to get a loan. Follow the steps described above to get started by applying.

How to Repay a Personal Loan Debt

Depending on the loan amount and rate, a personal loan is repaid over a previously agreed period, typically from 12 to 60 months. The interest rate is a key that affects the repayment terms, so it is important to understand your borrowing costs in advance.

Usually, a loan is paid back in fixed monthly installments. The lender automatically debits those installments, so there's no risk of late payment charges or interest penalties if there's enough money in your bank account. Many lending companies go as far as to offer discounts for auto-debit. Even though this option seems like the most convenient one, there exist other ways of covering a loan: for example, through sending a cheque or even through cash payment directly to the lender. It would be best to discuss the means of payment in detail before you finalize the loan agreement.

In the long run, loan repayment might become a tedious task, but it's entirely possible to pay it back smartly. Below, you will find several routes to repay your personal loan debt.

  • Quick repayment of a loan with a higher interest rate. If you already have existing loans with higher interest rates, it might be wise to repay them earlier than lower-interest ones.

  • Early payoff. You must carefully examine the loan agreement and decide if an early repayment or early payoff is the best strategy.

  • Consolidating debt. Instead of making several monthly payments with varied rates, you can always choose debt consolidation. A lender will merge all of your existing loans into one, and you will then have to make one monthly payment. Consolidation would lower interest rates and reduce your loan payment burden.

Those three methods of repaying debt don't necessarily cover every situation, as each loan is different. Remember that you can always hire a financial counselor to assist you in determining which repayment method is best for your needs.

Pros and Cons of Personal Loans

Like every other financial tool, personal loans come with pros and cons. It's essential to do some research about them before committing to any. Below are the biggest pros and cons.


  1. Flexibility. Unlike some other types of loans, personal loans don't necessarily have to be used for a particular intent. You can utilize the funds for any purpose you want without following strict guidelines. For instance, a secure loan is often used to cover medical expenses.

  2. Low rates, considerable loan amount. Personal loans present more financially lucrative interest rates when contrasted with credit cards, and borrowers can also use them to obtain a much more significant loan amount.

  3. Collateral is not required. Many loans mandate collateral, whereas unsecured personal loans don't. If you default on your loan, there is no risk of losing your car, home, or other valuables.

  4. Easy to manage. Thanks to the opportunity to consolidate debt, you can make your debt much more manageable. Switching to a single once-in-a-month payment with lower interest can make it much easier to pay off your debt.


  1. Elevated rates for bad credit. Debtors with subpar credit scores can frequently find that personal loans are a relatively expensive option.

  2. Fees can be overwhelming. Personal loans often have steep penalties and fees, including late fees, prepayment fees, etc. They can add up.

  3. Personal loans can worsen your financial standing. The relative ease and availability of the loans may encourage unhealthy economic habits. You may end up taking on more debt than you need to.

Legal Regulation of the Personal Loans Market in the USA

When discussing legal regulations and laws that influence the personal loans industry in the USA, it's pivotal to understand that every borrower needs to educate themselves as to what may affect them. Below, you will find several laws that require examination by those planning on taking out loans.

  • The Fair Credit Reporting Act

  • The Truth in Lending Act

  • The Equal Credit Opportunity Act

  • The Fair Debt Collection Practices Act

  • The Credit Repair Organizations Act

Any lender violating the above acts may be found guilty and face severe fines. It's best to confer with a legal consultant specializing in personal loans if you want to pursue legal action against any company.

The Real Cost of a Personal Loan

Many components affect the real cost of a loan. Actual loan costs can vary crucially based on the following fees:

  1. Interest. There are two types of APRs: one's variable and the other is fixed. The former swings up and down depending on the current prime rate. The real cost of a loan can be severely affected by an interest rate change in either direction. That's why loans with variable rates are considered more expensive on average than fixed-rate loans.

  2. Loan origination fee. It's a one-off expenditure covering the company's expenses when applying for a loan. Typically, your origination fee is somewhere between 0.5% to 5%. It's better to avoid personal loans with an origination fee because even as low as 2% on $20,000 of funds can adversely impact your financial status.

  3. Late fee. You receive this fee when you cannot cover the scheduled payment in full before the due date. Being timely is generally the borrower's responsibility, so failing to pay on time can add at least $25 to the cost of your loan.

  4. Prepayment penalty. Your lender usually doesn't want you to reimburse your loan early. This fee can increase the real cost of a loan. Always make sure to carefully inspect the fine print to ensure that your lender isn't going to penalize you for paying off your loan early. Talk to them to discuss the terms or ask a consultant to see if there is any room to save money by not including this clause.

Every single one of the fees mentioned above can negatively impact the real cost of a loan. The best way to avoid these fees is to pay close attention to the loan agreement, especially the offered interest rate.


What are the easiest loans to get approved for?

While some online lenders are looking for you to be a “top-tier borrower” with a nearly perfect credit score, most are willing to look beyond certain shortcomings and offer you lucrative conditions for a personal loan. This type of loan is the easiest to gain approval for, and it also has pretty flexible repayment terms.

What is the easiest personal loan to get?

The easiest personal loan to gain approval for is a secured loan. Borrowers can use a secured personal loan to cover many expenses, including essential bills or unforeseen emergencies. While collateral is required to secure a loan, the requirements to qualify are relatively relaxed.

How much is a 50000-personal loan?

A 50000-personal loan is a loan of $50,000 (50,000 USD). Usually, this type of loan comes with a 5% interest rate and a 12-year repayment period. That would mean that your monthly payment would be roughly $463. The total of 144 payments during the life of the loan would cost $66,592, and the total interest you’ll pay would amount to $16,592.