Personal Loans

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If you need a personal loan to pay for large or unexpected expenses, you may be able to borrow as much as $30,000 with a BFCU personal loan and enjoy a low fixed interest rate. A personal loan is a financial tool that can help you reach your goals in an affordable way. 

While you could use a credit card to handle larger expenses, there are several advantages to taking out a personal loan. With a credit card, there's no defined end date when your debt is 100% paid off and you can stop making monthly payments. With a credit card, you'll ideally pay off the balance each month and not accrue interest. Many consumers carry a balance on their credit cards, however. 

Credit card interest may be much higher than the interest rate on a personal loan if you have good credit. Plus, the credit limit on a credit card may be much smaller than the amount of money you need to borrow. 

Some personal loans require the borrower to pay additional fees, other than interest. There may be an origination fee, which is a percentage of the total loan amount, and a prepayment penalty, which requires the borrower to pay interest on the debt, even if they pay off the loan early. 

BFCU does not charge additional fees. If you shop several loan providers, pay close attention to the fees. With BFCU, there are no prepayment penalties. If you have the means to pay off your personal loan early, you can save money on future interest by doing so. 

How a Personal Loan Can Help You

You can use funds from a personal loan for nearly anything. Many people use a personal loan to fund a large project or pay off multiple debts. Here are some of the most common reasons people take out a personal loan with BFCU:

• Debt Consolidation

• Unexpected Expenses

• Moving

• Wedding

• Vacation

• Medical Bills

• Funeral Expenses

Alternative to High-Interest Payday Loans

Payday loans are convenient and easy to get. You don't need to have good credit; just a steady job and the willingness to pay very high interest rates and fees to gain access to the money. 

Payday loans are technically illegal in Massachusetts, but some lenders find ways around the laws that protect consumers here. With a payday loan, you must pay back the amount you borrow plus fees and interest within 14 days of receiving the funds. The high cost and short term of a payday loan make it a less-than-ideal solution for people who need quick access to funds.

Which Factors Affect My Personal Loan Amount?

You can borrow as much as $30,000 with a BFCU personal loan, depending on your credit history, credit score, current debt levels and income. 

While each lender sets its requirements and limits for personal loans, in general, you'll need good credit to gain access to this type of financing. Credit-challenged applicants may be limited to smaller loans with shorter terms. 

Your income level and employment history help lenders understand whether you may be able to easily pay back the loan as promised. Lenders usually look at your gross annual income, as well as your current debt payments to calculate your debt-to-income (DTI) ratio. Your DTI is your total monthly debt payments divided by your total gross income. Lenders like to see a DTI of less than 36%¹. A BFCU loan officer can help you understand your DTI and how it affects your ability to secure a personal loan. 

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