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Can You Use a Personal Loan To Buy a House

Technically, you can, but a personal loan isn’t a great option for purchasing a home or making a down payment in most cases. Instead, you’ll generally be much better off with a traditional mortgage.

Can You Use a Personal Loan To Buy a Car?

Yes, it is possible to buy a car with a personal loan. However, because personal loan interest rates tend to be higher than auto loan rates, buying a car with a personal loan is not always an ideal solution. More often than not, a traditional auto loan will be the far better option. Learn more.

What Are The Pros & Cons of Taking Out a Personal Loan?

From building credit to consolidating debt, personal loans can be financially advantageous. However, they can also lead to more debt and can negatively affect your credit score if you aren’t careful.

Can I Get a Personal Loan With Bad Credit?

Although it's possible to get a personal loan with bad credit, people with bad credit should expect to pay a higher interest rate and fees to get the loan. Credit unions have more flexible lending requirements than banks, making it easier to get approved for a personal loan even with bad credit.

What Credit Score Do You Need To Get a Personal Loan?

Of all the factors determining your ability to borrow, credit score is one of the most important. While there's no specific minimum credit score needed for a personal loan, you will get a better interest rate with a higher score.

How Much Personal Loan Can I Get?

Personal loans come in a wide range of amounts, from $1,000 up to $100,00. However, those are extremes. Most lenders offer personal loans somewhere in the middle. The dollar amount of your personal loan will depend on several factors including your income and credit score.

Can You Refinance a Personal Loan?

Yes, you can. Whether you’re looking to lower your monthly payment, get a lower interest rate, or reduce your loan term, refinancing your personal loan could be a good option. However, you’ll likely pay some fees, which may include a prepayment fee on your original loan. Note that CU SoCal does not charge prepayment fees on any loans.

How Long Does It Take To Get a Personal Loan?

Getting approved for a personal loan depends on several factors, such as the lender's requirements, your credit score, and the application process. In some cases, you might be approved for your personal loan the same day you apply; in others, it could take as long as a week.

Do You Need To Have Collateral To Get A Personal Loan?

There are two types of personal loans, unsecured and secured. An unsecured loan doesn’t require the borrower to pledge any collateral to secure the loan. A secured personal loan requires an item of value (such as a car or house) or a savings account be pledged as collateral to “secure” the account. 

Are Personal Loans Tax Deductible?

Money borrowed through a loan is not income, and therefore not taxable or tax deductible. So, for the most part, the interest paid on personal loans is not tax deductible. However, there are certain scenarios that allow for personal loan interest to be deducted on your taxes (e.g., business expenses, taxable investments, etc.).

Do Personal Loans Build Credit?

A personal loan will indeed affect your credit, but whether a personal loan will improve your credit score or not depends on your ability to meet your monthly payments and eventually pay off the debt in full. As long as you make your monthly payments on time, and in full, that personal loan will help build your credit score. However, making late payments or stopping payments altogether will harm your credit score, whether for your personal loan or on other debt that you have.

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Credit Union of Southern California (CU SoCal) is a leading financial institution empowering those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County to reach their goals and build strong financial futures. CU SoCal provides access to convenient money management services and offers competitive rates and flexible terms on auto loans, mortgages, and VISA credit cards—turning wishing and waiting into achieving and doing.


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