Quick Loans: Better to Choose a Personal Loan or Credit Card?

[Oct 28, 2009.]

 

Quick loans of $200 to $1,500--quick now, what is the best source to get one?

In past years, the automatic answer would be to take out a credit card. Because in past years, credit cards were readily available, even for borrowers with imperfect credit.

Nowadays, though, another quick loan option, the online personal loan, has risen up to challenge--and perhaps even overtake the credit card--as the best, fastest choice for individuals looking for quick loans in the range of $200 to $1,500.

Here are a few reasons for the ascendancy of online personal loans as a quick loan choice:

Credit Cards and Credit Card Companies Unpopular and Getting Moreso

It is not an exaggeration to state that the relationship between American consumers and their beloved plastic friends has soured to the point of resembling a financial train wreck.

Read these credit card statistics and weep at least a little bit:

-- Charge-off rates (charge-offs of credit card debt typically occur when no payments are made for six months) have soured to 14 percent at Bank of America, the biggest credit card lender.

-- The average family was carrying $9,840 of credit card debt as of 2007.

-- Bankruptcies are occurring at a 6,000 per day rate, with much of the strain due to credit card bills.

With credit card companies regularly raising interest rates and changing credit limits, a national backlash against credit card companies is firmly underway. New regulations from Congress have reflected this animus towards the credit card companies, and soured this relationship further.

Online Quick Personal Loans: Four Reasons Why They've Become More Popular

As credit cards have become less popular, online quick personal loans have become more popular. Four main benefits have helped online unsecured personal loans to gain traction in the marketplace:

1. Online personal loans are fast, approval can come in as little as 24 hours and the application and other paperwork is pretty simple.

2. Online personal loans can come with fixed rates (according to analysts, credit cards are now going to be all variable interest rate loans).

3. Online personal loans are available for people with bad credit.

4. Online personal loan lenders are not as devastated as the credit card lenders, who are seeing defaults rise to new and record levels on an almost daily basis.

Unsecured Personal Loans in the New Millennium

It may come to pass, if the above trends continue, that online personal loans surpass credit card loans as the unsecured personal loan of choice for people who need money now.

This is not to say that credit cards are dead, but certainly quick online personal loans are offering a viable option for individuals who want to borrow between $200 and $1,500 without a lot of hassle.

 

About Author:

Andrew Freiburghouse is a writer and businessman. He has worked as a magazine reporter, tax preparer, screenwriter, copywriter, and loan officer. He graduated from Santa Clara University in 1999 with a B.A. in English. Andrew was born and raised in the City of Los Angeles.