July 22

Personal Loans Again a Favorite among Big Banks


It’s good news! Big banks are lending again. While banks like Wells Fargo, TD Bank and Discover Financial Services have announced their comeback with interesting offers, speculations are rife if others like Banks of America and JPMorgan Chase will come up with similar offers in near future. Meanwhile borrowers can have good time with some really good offers from well-known lenders of the country.

According to a report published in a leading online journal, banks are again making at attempt to lure the consumers with low-interest unsecured personal loans. As they see a significant growth in the profit margin of loan amount they have advanced under the category in the last year, their jubilance can well be understood.

Big lenders now seem to have shed their inhibitions regarding approval of such loan requests. As the borrowers have now become more disciplined in their financial responsibilities, banks have no problem in making personal loans without the need of collateral, the report has concluded.

One more reason is being attributed to the increasing interest of banks in personal loans. Home equity loans have become less attractive these days owing to the consistently falling home values. Once a favorite source of financing, home equity loans are not finding enough takers due to rising interest rates and tightening lending standards. This is the summary of a report published by the credit bureau Equifax.

A personal loan can be used effectively in consolidating all outstanding debts with one monthly payment. As it is becoming more and more difficult to tap home equity for a secured loan, consumers have no option other than to rely on unsecured personal loans in order to consolidate debts associated with the use of credit cards.

The interest rates on some credit cards can go as high as 25 percent as compared to 15 percent of a typical unsecured personal loan. This is what driving consumers to go for an unsecured personal loan in case they are denied for a secured loan that usually comes at 6-10 percent.


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