In the previous article, we covered the basics of what personal loans are and what are the main reasons why people consider taking out a personal loan. You can read about it here.
This article will give you more information about personal loans and their amounts so that you can decide whether it is something for you.
Personal loans are for a fixed amount
The amount for a personal loan ranges between $1 000 to $50 000, depending on your income, lender, your credit score and your other debt. The better your credit score, the more money you can borrow.
Important to know – many banks put a cap on the amount you can borrow. Even if your credit score is high, still you might only be able to borrow $10 000 or $15 000 if this is your lender’s policy.
Another important point is that you cannot borrow from the loan again and again like you can with the revolving credit card credit or some types of mortgages. When you make payments for your loan, you reduce the loan’s balance, but this does not open more available credit that you might be willing to take. Once the loan is paid off, your account will be closed. Should you want to borrow again, you will need to apply for a new loan.