Almost everyone American needs loans in the United States and almost everyone takes a loan. It connects with the development in the United States. An average American has at least one loan for at least 30 years. On average, Americans take 1 large and several medium loans during their lifetime. The mortgage is taken for 25-30 years, the auto loan – for 5-10 years, the phone – for 2-4 years.
A person with any income takes something on credit in America. It doesn’t matter if you make 30 thousand or 150 thousand a year. Most likely, you will not be able to take a large loan due to low income or a low credit score, but if you earn at least $20,000 – 30,000 and your credit score is average 600-700 scores, then you may buy a phone or laptop on credit.
A personal loan is a loan for your personal needs. Why can I take it? When is it beneficial? If, for example, you have huge debts on credit cards, you cannot normally pay them off (and the rates on cards can be 20 and 25% per annum), then it is much more profitable to take a personal loan at a lower interest rate, pay off credit card debts and pay off this loan finally.
At least the interest rate will be much lower. In some cases, people take a personal loan if they need to make a large purchase. I do not know exactly what the interest rates for personal loans are in general on the market, as there are many defining points. It depends on your salary, credit history, credit score, the bank considers each client individually. The same as with mortgage. The bank itself says what amount it is ready to approve you and at what interest.
Americans often get different letters, such as Preapproval letters, including for personal loans. These letters offer loans for 6% per annum, this is an approximate average price. How much money you can borrow also depends on various factors, but this is a good solution for those who are got into credit card debt. Much more profitable than paying the 20-25% on credit cards.
What hapens if you can’t pay off your loan in the USA
Most likely you are being evicted, your property taken away, and worst of all, your credit history drops dramatically. In the event that you are unable to pay for the outstanding loan after the sale of property and the loss of property taken on bail, then the Americans declare bankruptcy. This is an official procedure for filling out paperwork and obtaining bankruptcy status, which deprives you of the right to take out a loan for 7 years and completely resets points from your credit history. In the absence of a credit history, it won’t be approved for any loan.