Personal loans are versatile financial tools that help millions of Americans address various monetary needs throughout their lives. These loans provide borrowers with a lump sum of money that they repay over time through fixed monthly payments. Here at City Finance, our loans range from 4 months to 14 months.
Personal loans offer flexibility that other financing options often lack, making them suitable for debt consolidation, home improvements, medical expenses, or unexpected financial emergencies.
The personal loan market includes several distinct categories, each designed to meet specific borrowing needs and risk profiles. Choosing the right type requires careful consideration of factors such as credit score, income stability, collateral availability, and intended use of funds. Understanding the different types of personal loans available helps borrowers make informed decisions that align with their financial circumstances and goals.
Secured vs. Unsecured Personal Loans
Secured personal loans require borrowers to pledge collateral, such as a savings account, certificate of deposit, or other valuable assets, to guarantee repayment. Lenders hold legal claim to this collateral until the borrower fulfills their repayment obligations completely. These loans typically offer lower interest rates because the collateral reduces the lender’s risk of financial loss.
Unsecured personal loans do not require collateral, making them accessible to borrowers who lack significant assets or prefer not to risk their property. Lenders evaluate these applications based primarily on credit history, income, and debt-to-income ratio. Interest rates for unsecured loans tend to be higher than secured options because lenders assume greater risk without collateral protection.
For many, the flexibility and freedom of an unsecured personal loan are highly appealing. At City Finance, we specialize in providing straightforward unsecured personal loans that allow you to achieve your financial goals without putting your valuable property on the line.
Fixed vs. Variable Rate Personal Loans
Fixed-rate personal loans maintain the same interest rate throughout the entire repayment period, ensuring consistent monthly payments that borrowers can budget for reliably. This stability protects borrowers from interest rate fluctuations in the broader financial market. Most personal loans feature fixed rates, providing predictability that helps with long-term financial planning.
Variable-rate personal loans have interest rates that fluctuate based on market conditions and benchmark rates such as the prime rate. These loans may start with lower initial rates than fixed-rate options, but monthly payments can increase or decrease over time. Economic conditions and Federal Reserve policy decisions directly impact these rates.
Fixed-rate loans suit borrowers who prioritize payment predictability and budget stability. Variable-rate loans may appeal to those willing to accept rate risk in exchange for potentially lower initial costs. City Finance uses a fixed rate model based on the amount you borrow, also set by the state of Texas.
Credit-Builder Loans
Credit-builder loans help individuals establish or improve their credit history through structured repayment programs. Financial institutions report payment activity to credit bureaus throughout the loan term, allowing borrowers to build positive credit history. For example, City Finance reports to the credit bureau Experian.
Credit-builder loans particularly benefit individuals with limited credit history, those recovering from financial difficulties, or people seeking to improve their credit scores before major purchases. Personal loans typically feature lower qualification requirements than traditional personal loans. Taking out a personal loan can be an excellent way for these individuals to build credit.
Emergency Loans
Emergency loans provide rapid access to funds during unexpected financial crises such as medical emergencies, urgent home repairs, or sudden income loss. These loans prioritize speed of approval and funding over extensive underwriting processes. Many lenders offer same-day or next-day funding for qualified applicants.
At City Finance, we provide competitive and fair rates for all our personal loans, making our loan company in Texarkana a go-to source for financing.
Visit City Finance for Your Personal Loan Needs
City Finance understands that every borrower faces unique financial circumstances requiring personalized lending solutions. Our experienced loan specialists work directly with applicants to identify the most suitable personal loan options based on individual needs and qualifications. Our company’s comprehensive approach considers both immediate borrowing requirements and long-term financial goals.
Professional guidance from knowledgeable lending professionals can significantly improve loan selection and terms. City Finance’s commitment to customer service ensures borrowers receive clear explanations of available options and honest assessments of their qualification prospects.
