Question : How does the personal loan from banks such as Bank of America or Citibank work?
I just received an offer to apply for a personal loan for up to 35,000 with Bank of America and for up to 5,000 with citibank. I actually need no more than 7,500. The interest rate is between 9,97 and 27,88 based on credit worthyness. I will like to know how it works. I'm hesitating between that and applying for a credit card. My credit score is fair (650). A friend advised me to go for the loan because it's a guaranteed fixed interest. But since I've never done it b4 I will appreciate some more advice. Thanks Much.
- asked by BeBeAdY
All Answers:
Answer #1
Loans and credit card are quite similar. Itreally depends on your credit history and youremployment status. No company will give you moneyif you don't have a job. Loans and credit cardinterest can be fixed or variable. This issomething that you need to talk to the bank about. Don't apply for a credit card if the interest isnot fixed. The only difference is that a loanwill require you to pay off at a certain amount oftime. This is how the bank calculates yourmonthly payments. As for credit cards, you canpay off anytime you want but you'll need to makeminimum payments. Since you are only makingminimum payments, you can end up never paying offthis debt. However, you can negotiate on theinterest rate in the future if your credit historyimproves.
- answered by Mrs Apple
Answer #2
Go for the personal loan because it gives you inaddition to the fixed interest rate a specifiedamount of time to pay off your debt. Credit cards,as we all know will only require minimum paymentand it can take you as long as 20 years to get outof a 7,500 credit card debt. And also, with thecredit card if you only pay the minimum, your cardwill stay maxed out for a long period of time andthat wouldn't be good for your credit score. Withthe loan you pay a fixed price every month for2,3,4 or 5 years and that's it. But b4 you do anyof that, make sure that you are braced to make allfuture payments on time, b'coz taking the moneyright now is the easiest part of all. So look intoyour finances, your job and any alternatives incase some things don't work as you plan. Draw aplan B and if possible a plan C before you goasking for money. Good luck
- answered by Diva
| 
