Today we are going to talk about personal loans that are all purpose loans applied for and approved for people who have different needs.
We are going to use four examples of people who have applied for personal loans in four different USA states – Alabama, South Carolina, North Carolina, and Georgia.
All of these loans were applied for by people who have really bad credit scores. Their predicaments were completely different in regards to why they needed a loan, and their locations, ages, marital statuses, and income levels were completely different. The other thing that wasn’t in common with these personal loans was the amount of money they were trying to borrow.
Sandra who came from to us (our website) from Montgomery, Alabama wanted a personal loan for $4000 so she could replace a broken furnace and heating system in their house, while over in Columbia South Carolina, Michael needed an all purpose loan for reasons that were undisclosed completely, but much of the money was used to pay off emergency debts.
The same thing with Bartholomew in Greensboro, North Carolina, and Betty in Atlanta, Georgia. Bartholomew needed to borrow $2000 just to pay off a few of his payday loans and some other personal debts, and Betty needed to borrow at least $20,000 to cover some medical emergency expenses for a family member. So you can see that some of the reasoning behind why they needed the loans were different, and sometimes self-inflicted, while other times emergency situations sprung upon them like a nasty cat.
We are proud to say that every one of these loan requests was fulfilled right here on our website using our database of private lenders who were willing to help these people with some personal financing at fairly competitive rates. Don’t get me wrong – the interest rates they paid on these loans were not cheap by any stretch of the imagination, but they were also legal in regards to APR.
Of course, the truth is we can’t be 100% sure what each lender charged the borrowers in these cases, because we never did get any feedback from the borrowers in regards to the fee structure and the interest rates that were agreed upon in each lending agreement.
So without any further ado, we will begin discussing each one of these personal loans on an individual basis so you can see why they needed the loan and what their resulting APR (effective annual percentage rate) was on each deal. Please keep in mind that at FUSA we don’t make any money in commissions whatsoever between the borrowers and the lenders. This is a voluntary website whereby people can meet to lend each other money. We are not responsible for the actual lending that takes place or the fee structures, but as we always mention, we like to be told by e-mail if some lenders are practicing shady tactics in regards to trying to charge upfront fees and loan shark rates.
$4000 Personal Loan in Montgomery Alabama for Betty – Furnace Replacement
So first of all we’re going to travel over to Montgomery Alabama where Sandra was in dire need of a furnace replacement in their family home. Betty has five people living in her home, which includes herself, her husband, and her three children - ages 7, 10, and 17. Two boys and two girls.
She wanted to borrow $4000 from a local bank in Montgomery but neither her credit and her husband’s credit ratings were acceptable enough to be approved for financing.
Getting a personal loan was completely out of the question as far as their bank was considered. Even at the Tri-Rivers Federal Credit Union where they held their mortgage, they couldn’t get approved for a $4000 personal loan or line of credit (LOC). When they checked out their FICO scores they could see why there was no way they could get approved. Betty’s credit score was 570, and her husband’s Frank’s score was 610 – both of those scores wouldn’t be conducive to a bank approval.
So Betty used one of our websites to put a quick pre-application form through for her personal loan of $3000-$4000, in an attempt to get approved with a private lender who lived in the nearby area. As a result she was contacted by a lender who lives in Birmingham, Alabama. This particular lender’s terms weren’t that outrageous, but they certainly were charging interest on the note than your conventional banker would . They needed to pay the loan off over the next six months, so this wasn’t a short-term payday loan, or cash advance kind of deal. This was a installment loan which required payments every two weeks for six months – in other words twelve payments and total.
Below is a calculation for her four thousand dollar personal loan from a private lender.
- Principal = $4000
- APR = 14%
- Term Length = 6 months
- Total to be paid back = S4150.77
- Interest on loan = $150.77
- Biweekly payments = $318.42
- Conventional Bank That Refused The Loan = Tri-Rivers Federal Credit Union
$8000 Dollar Personal Loan in Columbia South Carolina For Michael – All Purpose Loan
The next private lender loan we will talk about was for Michael who lives in Columbia South Carolina. This was just an all-purpose loan for $8000 so that Michael could pay off some student loan debt, credit card debt (visa), and the overdraft on his main checking account. This kind of loan is extremely typical as most people are trying to clear up various debts that have accumulated over a period of time.
Just like Betty from Alabama, Michael had a seriously bad credit rating from years of late payments, defaults, and general bad money management practices.
Michael tried to borrow $15,000, then $12,000, then $10,000, then $9000, and finally ended up getting a loan for $8000. $8000 wasn’t quite enough for him to completely pay off all of his debts, but it was pretty darn close. Michael applied online through the FUSA network as well, and found himself being approached by three different lenders who use our database. Two of these lenders were subprime mortgage companies, who wanted a piece of equity on his home, and then the other lender was a private citizen who lent money to individuals for short-term gains.
This private lender lives in Charleston South Carolina and lends money to individuals throughout the State. You couldn’t really qualify this lender as a loan shark, because his rates are actually lower than your typical payday loan or cash advance company. He charges $18 for every $100 borrowed if the loan is only for one month or less. He charges $21 for every $100 borrowed if the loan is for two months or more. Fairly reasonable if you consider what your bricks and mortar banks are charging these days if they decide to even give you a loan. Below you can see the actual effective APR on Michael’s loan for $8000. Keep in mind that Michael cashed some shares in from his E-Trade account at the end of the month in order to pay this loan off.
- Principal Loan = $8000
- Fee Per $100 Borrowed = $18
- Length of Term = 28 days
- Total Paid Back to Lender: $9440
- Total Fees Paid to Lender: $1440
- Total Effective APR on Loan: 234%
- Conventional Bank That Refused The Loan = First Citizen’s Bank
$2000 Personal Loan in Greensboro North Carolina For Bart – Pay Off Payday Loans
Meanwhile over in Greensboro, North Carolina Bartholomew was trying to get a small personal loan for $2000, which he planned to pay back in 14 days after he got paid from his employer. The problem was that he couldn’t find any lenders in all of the state of North Carolina that would lend more than $1500 to him at a time, and this includes even if he was a repeat customer.
This is an expensive APR on this particular loan. Bartholomew wants to pay all the money back in one lump sum in two weeks time and wanted to pay the smallest amount of money in fees and charges. He was specific enough to mention that he wanted a no teletrack payday loan and a no faxing payday loan. He wanted to be approved with lightning efficiency and a hassle-free online process. In fact, he wanted a 100% online approval and funding of the note.
This is a very normal request these days online, as so many people need to borrow more than $1500 but there isn’t really any companies that can do that legally. I mean sure, there are loan sharks and some pawnshops that were willing to give him some money if he had some kind of collateral and equipment, coins, or basic valuables, but none that would lend him $2000 as a signature type loan.
He had no choice but to utilize a payday lender in Greensboro for the full amount of $1000, and borrow the other thousand dollars from his employer as an advance on his upcoming paychecks. This is something you really don’t want to do unless you are forced to. In this particular case Bartholomew was going to be paying a higher interest rate on his new loan which was almost just as bad as his combined interest rates on his other payday loans. He really wasn’t going to gain that much in the process except for maybe slowing down the collections phone calls from the existing payday loan companies in his area. If anything, it was just a brief interlude and break from the collection agencies. His only real way out of this mess was to find some cheap money with an interest rate lower than 5% to 6%, and the only kind of consumer level credit that gets that low is a HELOC (home equity line of credit). And here in lies the rub – Bartholomew doesn’t own a property (well he didn’t own anything like that at the time of his online application).
Below is a calculation for 14 day term on the payday loan of $1000, and just for giggles we will do the same calculation for 14 day term loan at $2000. Fee per $100 borrowed equals $30
- Principal Payday Loan = $2000
- Loan Term Length = 14 days
- Fee Per $100 Borrowed = $30
- Total Paid Back to Lender: $2600
- Total Fees Paid to Lender: $600
- Total Effective APR on Loan: 780%
- Conventional Bank That Refused The Loan = Wells Fargo
$20,000 Dollar Personal Loan in Atlanta Georgia For Sandra – Medical Emergency
Our last private loan was a personal loan for Sandra for $20,000 in Atlanta Georgia. The lender who provided Sandra with the money was another older woman who lived in Augusta Georgia. The lady in Augusta requested an interest rate of 14% on the $20,000, and she wanted the money pay back completely within three years. We can do that calculation for you below as well. The lender had experience with the costs associated with a medical emergency, and she really didn’t have the resources to pay off 20 grand in a short period of time. Sandra has a job as a nursing assistant (ironic don’t you think) and makes pretty decent money working full-time hours in Atlanta.
As you can well imagine the lender and Augusta wanted some really solid proof of earnings, employment, identification, and the purpose of the loan. There was some hoops for Sandra to jump through before she could get the loan, but in the end she did manage to scrape together the necessary documentation so she could get approval. The medical emergency was for a quick cancer removing surgery on her husband’s testicles. He had already had some operations for testicular cancer in the past, but his insurance money had tapped out at the top and he needed this extra cash to get another portion cut out. Not a good thing by any stretch.
So the purpose of Sandra’s personal loan from another private lender in the same State, we are going to calculate the payments she ended up making over the next three years. You can see all of his data below.
- Principal Loan = $20,000
- Interest Rate = 14%
- Loan Term Length = 36 months (three years)
- Total Amount to be paid = $24,315.86
- Total amount of interest = $4,315.86
- Payments per month = $666.19
- Conventional Bank That Refused The Loan = Capital City Bank and Trust Company
This wraps up this discussion and journal on our four applicants and borrowers from Alabama, North Carolina, South Carolina, and Georgia. We are once again, happy to see all of these people using our site to make their pre-applications, and to see that they found some willing lenders who played fair ball. We will continue to document more of these loans going forward into 2012. We are happy that you found this to be an interesting read – or perhaps something you can certainly relate with.