Personal Line of Credit or Personal Loan

Anonymous · ‎07-20-2016

Hi,

I've been researching about line of credits and personal loans. I know with the LOC, you can get cash advances when needed and pay it back. Personal loans, you get the entire amount up front and then pay it back installments, is this correct?

I'm not sure which option is better for ME. Can you share with me what has worked for you and why just so I can have something to glean from? Thank you!

Anonymous · ‎07-20-2016

Yes that's correct PLOC (line of credit) you are given a lump sum and you take what you need and you only get hit by interest rate for the amount you take out, like almost credit card cash advance but rather the full amount is cash advance. Personal loan you take the full and as soon as papers are all signed the interest starts for the full amount.

Depending on what you need or your situation.

Anonymous · ‎07-20-2016

Thank you. I want to use the funds to renovate my backyard without dipping into our savings or sinking funds.

Anonymous · ‎07-20-2016

My PLOC reports like a credit card, so utilization counts in scoring like one.

A personal loan will report as a installment, won't calculate into utilization but into DTI.

I took out a FHA Title 1 loan for my home improvements, rate was much lower than a LOC or loan. The only bank I could find to do this was Admirals Bank. With a 701 mid-score, on a 5 year, I was looking at 5.25%. Under $7.5k and its unsecured, over that it's secured by your home, no appraisal or anything like that. Easy process, they've been great to work with. Just another option.

Anonymous · ‎07-20-2016

@Anonymous wrote:
My PLOC reports like a credit card, so utilization counts in scoring like one.

A personal loan will report as a installment, won't calculate into utilization but into DTI.

I took out a FHA Title 1 loan for my home improvements, rate was much lower than a LOC or loan. The only bank I could find to do this was Admirals Bank. With a 701 mid-score, on a 5 year, I was looking at 5.25%. Under $7.5k and its unsecured, over that it's secured by your home, no appraisal or anything like that. Easy process, they've been great to work with. Just another option.

Thank you! That really helps. I will look into that as well! I got approved for a PLOC at Keybank. The interest rate is 8.99 which seems a bit high for me.

Anonymous · ‎07-20-2016

Also,

Check into your local credit union, they may offer rate on a personal loan from 5.99 to about 17.99 depending on where your credit is. Also something to take into consideration. Good Luck!!

@Anonymous wrote:
@Anonymous wrote:
My PLOC reports like a credit card, so utilization counts in scoring like one.

A personal loan will report as a installment, won't calculate into utilization but into DTI.

I took out a FHA Title 1 loan for my home improvements, rate was much lower than a LOC or loan. The only bank I could find to do this was Admirals Bank. With a 701 mid-score, on a 5 year, I was looking at 5.25%. Under $7.5k and its unsecured, over that it's secured by your home, no appraisal or anything like that. Easy process, they've been great to work with. Just another option.
Thank you! That really helps. I will look into that as well! I got approved for a PLOC at Keybank. The interest rate is 8.99 which seems a bit high for me.

ttleigh · ‎07-21-2016

If you have savings but just don't want to use it look into a savings secured loan. I have one through my credit union and the interest rate is about 1.5%. The hold the original loan amount in a cd for the term of the loan.

kroberts67 · ‎07-22-2016

I've done it all, and what I would do is look at the interest rate. Thru my CU, they will give me personal loans, plus a have a LOC with them. A loan you will pay back each month but a LOC is there whenever you need it and is very easy to use... if you're a person who might spend knowing it's there in the back of your mind... and spend too much, then you might go for the loan instead. I really love the LOC, as it's always there in an emergency. In the end it comes down to the rate.

FICO: EQ 814 | TU 847 | EX ? (Started in the low 500's... you can do it!)

Amex BCE $25000, Amex AP $20000, SFFCU Visa $15000 + LOC $5000, USAA Amex $6000, USAA MC $7000, Cap1 $9500, Freedom $12000, Slate $500, Barclays "RIP" SM $11500, USBank Cash+ $12500, Citi Diamond $11200, Citi Double Cash $12000, Care Credit $13500k.
My Credit Repair Journey

JLK93 · ‎07-22-2016

@Anonymous wrote:
My PLOC reports like a credit card, so utilization counts in scoring like one.

A personal loan will report as a installment, won't calculate into utilization but into DTI.

I took out a FHA Title 1 loan for my home improvements, rate was much lower than a LOC or loan. The only bank I could find to do this was Admirals Bank. With a 701 mid-score, on a 5 year, I was looking at 5.25%. Under $7.5k and its unsecured, over that it's secured by your home, no appraisal or anything like that. Easy process, they've been great to work with. Just another option.

With what CU, or bank, dos your PLOC report like a credit card?

Anonymous · ‎07-23-2016

I have two PLOCs, one with BECU and one with RBC Bank. According to CCT they both report as

Type: unknown
Terms: revolving

The limit and balances for both accounts count towards my utilization, same as a credit card would.