Personal loans are a viable financing option for major expenses, but misconceptions can lead to high fees and interest rates. Learning how they work can save money. Rates for personal loans start around 6% to 8%, much lower than credit card rates of 21.16%. Prequalify online to see your likely rate without affecting your credit score.

Despite having a weak credit score, you can still get a personal loan. Lenders vary in credit requirements, with some accepting subprime scores. Expect a higher interest rate and potential origination fee. The application process is streamlined, and funds can be disbursed quickly, making personal loans a feasible option for various needs.

Reputable online lenders offer competitive rates, but beware of predatory ones promising no-credit-check loans. Stick with established lenders and check reviews. Personal loans can affect your credit score positively if repayments are on time. Consider using a personal loan to consolidate high-interest debt to improve credit utilization ratio and overall score.

Personal loans are flexible for many expenses but have restrictions. Be honest in your loan purpose description to avoid fraud. Most personal loans are unsecured, based on your financial profile. Opting for a secured personal loan may offer better terms but carries the risk of losing collateral if you default. Consider applying with a creditworthy co-signer for better rates.

Before borrowing, compare rates, terms, and fees from multiple lenders. Understanding personal loans can help you make informed financial decisions and achieve your goals responsibly.

Read more at Yahoo Finance: 7 personal loan myths that could cost you money