Finding the Best Personal Loans in Asheville, NC

Personal loans can help you pay for home improvements, weddings, medical bills, and many other large expenses. Consolidating debt is another reason to seek a loan. If you’re in need of money—for any reason—you can apply for a personal loan. While fewer and fewer banks offer personal loans these days, the local Asheville community can find personal loans at First Bank.¹

If you live in Western North Carolina and need a personal loan, we can help. Our personal loan options vary in features, but all come with competitive rates and flexible terms. The best personal loans in Asheville, NC are customizable, and at First Bank, we work with each potential borrower to customize a loan specific to his or her individual needs.²

Read on to understand the basics of personal loans, what factors are considered by lenders, and which First Bank option is best for you.

Reasons for Obtaining a Personal Loan

Perhaps you need money to pay for a wedding or vacation in the Blue Ridge Mountains, or you’re looking to buy a new roof for your house. Perhaps you have high balances on more than one credit card and want to consolidate the debt. There are a dozen reasons why you might need to borrow money, and this is why personal loans are worth considering.

While you may want to consider using a credit card to pay for smaller loans, such as under $10,000, a personal loan is ideal for higher expenses. Just remember, any time you take out a loan, you will be expected to pay the money back. Depending on the loan amount and how long you have to pay it back, you are likely going to pay interest on that money.

Unsecured vs. Secured Loans

When you apply for a loan, you will find both unsecured and secured loan options. Here is what you should know about them:

  • Secured personal loans—These loans are backed by one or more of your assets. For instance, if you take out a mortgage loan or an auto loan, the house or car will be considered your asset. By agreeing to a secured loan, you are agreeing that if you don’t pay back the money, on an agreed-upon time, the lender can repossess the asset and use it as collateral. The value of the asset must meet or exceed the loan amount.
  • Unsecured personal loans—Since there is no asset tied to the loan offer, lenders are at more risk on these loans. Because of this, unsecured loans tend to involve smaller amounts of money. However, if you have a good credit history and income, this might be the best option for you—and is, certainly, less risky for you as the borrower. An example of an unsecured loan is a student loan.

Types of Unsecured Personal Loans

Secured loans include mortgages, car loans, lot loans, business loans, etc. Unsecured personal loans include some credit cards, peer-to-peer loans (which is money borrowed from someone your know), etc. Unsecured personal loans can be used for any number of reasons.

The types of unsecured personal loans offered by banks in Asheville include the following:

  • Signature loans—These are the most basic loans. The bank offers you the money you need, you agree to pay it back. There is no collateral, just your signature and your word. Often these are fixed-rate installment loans which means a lump-sum is given up-front, with the requirement of a monthly payment. You will pay that monthly amount—for however many months or years you and the lender have agreed to—until the full amount is paid back to the bank.
  • Credit cards—Although credit cards are very common, it’s important to note that the money you spend on your credit card is borrowed money until you pay it back. In this instance, the monthly payment varies depending on how much money you’ve spent, or your balance amount. Often, there is a minimum payment required, if you have a balance.
  • Line of credit—These are approved of in advance and are more similar to credit cards than signature loans. If you have a good credit history, the bank may offer this option to you. Essentially, you are given a line of credit to use when needed. The benefit of this, which is not as standard as a signature loan, is that the money is available for whenever you need it.

Factors Considered When Applying for a Personal Loan

Before you apply for a personal loan, it’s important to know what the lender will be looking at. To obtain a loan from First Bank, or any other lender, you should understand the application process and what the best personal loan lenders consider:

  • Credit score—In order to get the best personal loans, it helps to have strong credit. Lenders will be more likely to accept your application if you have high credit. The higher your credit, the lower the interest rate. If you wish to raise your score, you can open a credit card, pay your bills in a timely manner, and pay off your debt.
  • Debt to income ratio—When lenders offer you a personal loan, they want to ensure that the money will be paid back so they will look at your debt-to-income (DTI) ratio. You can determine this ratio by using a DTI calculator.
  • Repayment history—If applicable, lenders will look at your repayment activity. Any unpaid debts or late payments could affect your eligibility.

The application process for a personal loan is usually very quick. It shouldn’t take more than a week for them to approve or deny.

What If You Have Bad Credit?

Don’t stress. Although it’s going to be more difficult, you can still get a personal loan. Best of all, you can build upon your credit by borrowing and repaying loans, such as through a secured credit card. In these cases, the best personal loans should start small and be secured by cash. Until you increase your credit score, you’ll be paying more than somebody who has good credit, so if you have time to build up your credit before securing a loan, that can help.

What You Should Look for in the Best Personal Loans in Asheville

Although lenders will be the ones approving your loan, not all loans are created equal. In order to determine if a personal loan is right for you—and what you should be looking for in a bank’s loan—here is what you should pay attention to:

  • Calculate your finances—Know how much you really need before you send your application.
  • Loans with low interest—The lower the interest rate, the better. More interest means more money that you have to pay back to the lender. At the same time, if you choose to take out small personal loans, as opposed to larger ones, you won’t have to be pay as much in interest.
  • Terms and conditions—Don’t accept a loan before looking at the details of the loan offer and that includes terms and conditions. You should know the interest rates, as well as late fees associated with your loan. Late fees may also be called monthly finance charges in the contract and are usually set as a percentage.
  • Contact the lender—Once you choose which personal loan is best, make sure you contact the lender and learn everything you can about the loan including interest, how that loan might impact your credit score, etc. You want to choose a reputable lender to work with like First Bank who is dedicated to helping customers in Buncombe County and throughout Western North Carolina.

Understanding Personal Loan Rates

No matter what type of loan you take out—personal, business, or student—your loan will likely include interest and a repayment term, both of which will be determined at the outset.

Variable vs. Fixed Interest Rates

When interest is included in a loan, it will either be set as a fixed rate or variable rate. It is hard to determine which is better, but here are the differences:

  • Variable interest rate—On this type of rate, the interest varies as the market interest rates change. The market can rise or fall, and therefore your payments change along with it. It is hard to determine where the market is heading, so this is often an unpredictable number.
  • Fixed interest rate—A fixed rate is determined up-front and doesn’t change for the duration of the loan. If you have been approved for a fixed rate, you can use a loan calculator to determine how much you will end up paying in the long-run. For example, if you get approved for a $10,000 loan to be paid back in four years with a 5% interest rate per year, then you will end up paying a total of $11,054.

What Is a Loan Prepayment Penalty?

You may want to pay off a loan as soon as possible, especially if you have the funds available. However, if you pay off a loan before the end of the agreed upon term, you could be expected to pay a loan prepayment fee. If so, this will be included in your loan contract, which is another reason why you should read the terms and conditions before signing.

What Are the Best Personal Loan Rates?

Lender rates are typically measured in terms of an annual percentage rate (APR). This percentage accounts for the total cost of borrowing money including, if applicable, certain upfront fees.

To better understand APR, it’s important to know about annual percentage yields (APY) as well. If you open a bank account, such as a savings account, you can earn interest on the money saved. When you’re paying interest, a low annual percentage rate is best, but if you’re the one earning interest, then a higher annual percentage yield is ideal.

If you have good credit, which typically consists of 670 to 739, or if you have excellent credit that is 740 or higher, you will likely receive the best personal loan rates from lenders.

Who Has the Best Personal Loans in Asheville, North Carolina?

First Bank offers some of the best personal loan rates in the Blue Ridge area, including home equity lines of credit, mortgage loans, business and professional loans, and more. What makes our loans some of the best personal loans in Asheville is that they ensure that our customers’ needs are met.

Here are First Bank’s best personal loan offers, which can be used for short-term personal loans, if needed:²

  • Personal Line of Credit—This option provides instant power to borrow money simply by writing a check and requesting cash. A personal line of credit may or may not require collateral to secure.
  • Home Equity Line of Credit (HELOC)—Take out a loan using your accrued home equity as collateral. First Bank HELOC options are flexible and have low interest rates.
  • Auto Loans—If you’re in the market for a new car and need an auto loan, First Bank can make it possible. Our auto loans have competitive rates, and you can access your funds in as little as 24 hours.
  • Boat and RV Loans—With our fixed rate boat and RV loans, you are a step closer to your next adventure. We offer competitive rates, flexible terms, and no prepayment penalty.
  • Platinum Credit Card with Rewards—A First Bank credit card is another way of making purchases now and paying for them later under no annual fees, competitive rates, and a rewards program for registered cards.³

You can learn more about our personal loan or credit options online. Remember, we offer customizable personal loan offers. We work diligently with our customers to ensure that your financial needs are met. If you are starting a small business, you might even consider our small business loans or small business loans for women in Asheville.

If you think a personal loan or credit option is best for you, please contact us by filling out the form or visit the nearest Asheville branch to you. First Bank has various locations across Western North Carolina, including a branch in the downtown Asheville area.

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Sources:

Investopedia: https://www.investopedia.com/terms/c/collateral.asp

The Balance: https://www.thebalance.com/installment-loans-315559

Good Calculators: https://goodcalculators.com/debt-to-income-dti-ratio-calculator/

Bankrate.com: https://www.bankrate.com/calculators/mortgages/loan-calculator.aspx

Experian: https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-is-a-good-credit-score/

First Bank: https://localfirstbank.com/content/small-business-loans-for-women-asheville-nc

¹Member FDIC

²Loans subject to credit approval. Equal Housing Lender. NMLS #474504.

³Requires free enrollment in each program. Rewards are based upon qualifying purchases as defined in the terms of each program. Click for additional information.