Personal Loans
Personal Loans
A personal loan is money you borrow from KeySavings Bank with a set repayment period and consistent monthly payments. Most personal loans are unsecured so you won’t have to put down collateral to borrow the money.
Loan amounts vary widely, from around $1,000 to $50,000 or more, and interest rates vary depending on the underwriting of you application. Borrowers typically get between one and seven years to repay the money.
Personal Line of Credit
An unsecured personal line of credit is a revolving credit account which allows you to draw funds up to a limit. It’s similar to a personal credit card because it allows you to borrow funds as needed, without having to take the full amount in one lump-sum payment. They’re useful for long-term projects with variable costs or for borrowers with irregular income streams.
Due to the variety of repayment structures in the market, borrowers should be wary of the unique terms associated with their loan. The majority of personal lines of credit will function like a credit card, as outlined above. However, other repayment terms exist, and may have cumbersome provisions associated with them. We’ve identified some less common forms of repayment below:
Draw and repayment periods: In some instances, personal lines of credit can feature separate draw and repayment periods; allowing the borrower to withdraw funds during the draw period, while requiring them to make monthly payments during the repayment period.
Balloon payment: A personal line of credit may require payment of the entire balance at the end of the term, otherwise known as a balloon payment. Balloon payments come with the added need to refinance if the borrower is unable to repay the full amount.
- Borrow only the money you need
- Interest incurred only on funds borrowed
- Flexible repayment options
- Constant access to funds
- Lower average APR than credit cards
- Unsecured credit lines risk no collateral
- Option to provide collateral for lower interest rates (secured loan)
- Few restrictions on use
- Ideal for long-term projects where the final costs are variable
- Ideal for meeting temporary cash shortfalls
- May draw up to 100% of credit limit without restrictions
