If you have looked into personal loans of any kind, you have most likely noticed that personal loan interest rates can be a bit higher than those offered for mortgages, home equity loans, or even auto loans.

Depending upon the type of loan that you want, the loan amount that you are shooting for, and the current credit standing that you enjoy, there are a great many options available through the endless online sources available to you.

Your process will best be served by first doing a personal inventory on your end to determine what you can afford and how you will best utilize the funds should your application be approved.

Personal loan interest rates on unsecured types of financing will be higher than average, even for those with impeccable credit histories and supreme credit scores. This is because the bank or lender has no material thing to repossess should you default on your loan, and this causes a greater risk that their money will not be collected.

Higher rate couples are vulnerable

The higher interest rate couples with the fact that the first half of the loan payment period goes almost strictly toward the interest and not the principle of the loan in order to ensure that, if you should default on the loan, the lender has nearly recouped their investment at a much earlier time.

Instant personal loans are another monster altogether, as these unsecured, short term loans will require no credit check whatsoever. As such, the personal loan interest rates on cash advance and payday loans can topple 25%, and that is if you find a generous lender.

You will most likely be asked to repay the loan with all fees and interest payments within two weeks of the loan taking effect, with extension options that can be rather costly but convenient in a bind. With these types of loans, it is a good idea to visit only in the case of an emergency.

A secured loan is cheaper for you

If you are looking for a secured personal loan, you will most likely find a better personal loan interest rate attached to it than you will with the unsecured type, depending upon your credit standings at the time of the loan application.

Often, a paid off vehicle with a good amount of bluebook value still within it can secure a small personal loan, though few banks or lenders will do this on a car with damage or high miles. A secured loan in the form of home equity is a better deal yet, as this can be the easiest to repay in the long run.

You can begin by tallying up all of your bills and expenses for each month and determining what type of payment you can afford on a personal loan without squeezing your budget too tightly.

The lender that you choose will want to know this information as well, so having it all figured out will only benefit your case at application time. Remember to save your social security number for that lender you choose in the end rather than offering it to each bank you speak with.