Guide to New York Personal Loans
New York personal loans are becoming a common last resort for New Yorkers who are drowning in debt and other financial obligations. In an unstable job market with a heavy 8 percent unemployment rate, residents are moving forward with taking on personal loans as a means of debt consolidation or to pay off larger bills.
Types of Personal Loans in New York
Financial institutions may offer a variety of loan types that cater to specific borrower needs. However, there are two basic types of New York personal loans that offer polar pros and cons.
Secured personal loans:
In order to qualify for secured personal loans, borrowers are required to supply some form of collateral. Since the collateral presents less of a risk to lenders, secured personal loan rates tend to be lower.
While the appeal of lower interest rates are tempting, borrowers who opt for this kind of loan are encouraged to carefully assess whether repayment is truly feasible, as collateral will be lost in the event of default.
Unsecured personal loans:
Unlike secured loans, unsecured personal loans do not require collateral. However, personal loan rates are significantly higher and borrower’s creditworthiness plays a major factor in finding lower interest rates.
Borrowers should determine how differences in personal loan rates will affect monthly payments, in order to budget correctly and keep from sinking further into debt.
Is a New York Personal Loans Right for You?
Borrowers should tread lightly when it comes to personal loans, as they can easily add to growing financial troubles rather than repair them. To understand whether personal loans can be the solution to your financial predicament, you’ll need to explore the three C’s of personal loans– character, capacity and credit.
Personal habits (character): Evaluating your priorities can determine how successful you’ll be at handling a personal loan. Do you think in the long-term or short-term? Are you a chronic spender? Can you say no to weekend outings if your budget requires you to do so?
Fiscal limitations (capacity): Chances are that if you’re considering a personal loan, you’re fairly knee-deep in debt. After you’ve used the loan to pay for other obligations, can you afford to repay it? How secure is your existing job, and do you have a plan B should you face unemployment?
Financial track record (Credit): Recognizing where your credit is and how it got there can help assess whether personal loans are really the best option for you. Have you always had a problem with paying your bills on time? What will you do differently this time to ensure that you keep abreast of your financial obligations?