You're watching...
SmartCredit.com Consumer Education President John Ulzheimer on the pros and cons of personal loans offered by banks.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
If you're considering a big ticket purchase are looking to pay -- -- credit card debt.
People are saying now that up personal loan from a bank might be the way to get out in the past year these kinds of loans have become more popular.
What should you look out for John Alzheimer is the president consumer education for Smart credit dot com John great to have you on the show.
Are you fan -- -- I am a -- enemies and here's why day summit will use these a stop -- types of -- 500 bucks a thousand bucks just to make it -- the next paycheck.
The alternative is easing something as onerous as a paid -- -- -- -- -- analyzing interest rates we're getting well into the hundreds.
A lot of people use these to convert revolving credit card debt into installment debt much better for your -- reports much better for your credit.
-- -- look something we're using them to pay for weddings shouldn't we just pay for the wedding out of pocket -- we save up and then pay for -- instead of taking out a one of them paying that over.
Six years ten years -- I think it's just flat out silly to finance a wedding in and of itself with any method of payment what a lot of personal -- by.
Look there are some pros and -- SARS and cons of these things -- pros are.
That they are legitimate loans issued by legitimate mainstream went under all Democrats -- are they will go on your credit report your credit shorts has been a huge issue in the news lately is what actually -- -- -- doesn't this does it -- -- get.
Back into the good graces of wonders where you can get more competitive types of loans -- really good.
Interest rates I like at least I want to show viewers what we're talking about here.
So this a personal loans issued by a major bank like discover TD bank Wells Fargo here examples of their products in the market place.
You get a pretty penny here a 100000 bucks the rates range from 6% 21% the terms could be.
They could be one year two years seven years what every -- why other lenders getting into this business do you think.
One word demand.
These were highly in demand up until two years ago and what the credit crunch and a mortgage meltdown.
They essentially work temporarily at -- can you be temporarily -- -- are temporarily extinct.
Now they're making a big time come back because the middle risk and higher risk borrowers looking for a way to borrow money and there alternatives war.
Payday loans title loans pawn loans just as dealers at a Billy real I arrest Chris no forget it it's it's really a different light at the end.
So why would you use -- at what point John Alzheimer go to his bank -- say.
I -- personal lines while John Alzheimer would do it if he absolutely had no other options and how a lot of revolving credit card debt at 29%.
And I needed to convert -- tell less expensive installment debt and that's what I would use this for and really nothing more.
Very any other words there was some -- to get taking these out -- -- -- -- yet be sure governor if you remember we should call the signature loans and the collateral the security for these types of loans was essentially your signature.
There's nothing securing these -- we talked about some of these guys give you a hundred grand a you better have darn good credit if you think you're getting back kind of loan and you better have a decent income to justify -- kind of borrowing power.
The good news about these loans as they -- finite.
You're gonna pay them off within three to five years where credit -- if you look at your statements -- -- -- to tell -- how long it's gonna take the pay them off at the -- -- can be 1520 years.
They're all around eight pretty decent alternative to some of the more on or -- products that have been.
Produced created and heavily marketed over the past 1824 months might be good option for some some small business people out there -- -- like.
-- is so it's great to have you on -- with us my pleasure.
