At some point in your life, you’ll need more money than you actually have. If you can wait for the reason you need the money, save up for it. If you cannot wait, look for personal installment loans for good credit. Do not take out a loan just to keep living at a certain level. Only take out a loan to meet a genuine emergency need like paying for medical bills for an emergency or for a major purchase like a home. When it comes to personal loans, use it smartly. One example is to consolidate higher-interest debt into a personal installment loan for good credit. Often that means better terms!
When looking for a lender, you need to be very careful and do your research. Make sure you are choosing the best option for you. You can always look for help here, on Loanry! We partnered up with Fiona to bring you reputable lender choices you may qualify for depending on the information you put in below.
How to Get a Personal Loan with Good Credit
Depending on what you want to use it for, you have multiple choices of where to go for your loan. Start at the Small Business Administration (SBA) for a loan for your small business. Their loan guaranty programs ensure most of the US small business installment loans. They favor offering longer repayment plans so you can spread out the payments as your business grows.
If you do not need a large loan like the SBA would make, try banks and credit unions. Banks and credit unions have conservative lending policies. This can turn into a frustrating route. Walt Disney approached 400 banks before one was willing to finance the cartoon “Mickey Mouse.”
For car, boat or home loans or funds for renovation, try banks and credit unions. They make these types of personal installment loans every day. They are your best bet for a loan. You’ll probably need to put up collateral for a home loan or renovation loan, but this will result in personal installment loans for good credit with very low-interest rates.
The Seemingly Never-ending Search
Normally, the process of getting personal installment loans for good credit takes a while. It starts with your research.
- Check interest rates. Wait until the rates drop.
- Contact all three of the main credit reporting agencies. Maintain your good credit rating. If it is not already good, raise it through credit repair before applying.
- Call each bank or credit union or visit their website to research both secured and unsecured loan options.
Meet with each viable lender, if possible. This means to start your search for personal installment loans for good credit locally. Offer a large down payment of at least 20 percent if trying to obtain a home loan. Once you have the loan, work closely with the lender to communicate progress on the loan’s goal.
Short Cut to Your Search
If that entire process sounds long and arduous, you can use a few shortcuts. Here’s the 21st century way to find a lender.
- Check interest rates. Work on getting in better shape with your personal finances before getting a personal loan.
- Use creditry.com to check your credit score. Maintain your good credit rating. If it is not already good, improve your score before applying.
- Use Loanry.com to find a lender for secured and unsecured loan options.
Personal Installment Loan Defined
Typically, for smaller unsecured loans banks try to get the applicant to take out a credit card. This won’t work for larger ticket items like cars, boats or homes. That’s where personal installment loans for good credit come in handy.
A personal installment loan or personal loan refers to a loan extended by a financial institution to an individual that gets paid back in small, monthly payments over a specified period of time. The payments usually combine principal and interest. The loan repayment term may span only a few months, or it stretches out over 30 years.
Unlike a credit card which is a revolving credit loan, a personal installment loan is a one-time loan. The interest rate at which the bank extends the loan consists of the bank’s standard rate combined with the factors of your personal credit history and available collateral. You can also obtain an unsecured personal installment loan for good credit, but these are tougher to get.
You will normally obtain a better interest rate with a secured loan. While mortgages and car loans are generally secured installment loans, smaller loans like that for a home renovation or a micro business loan are usually unsecured.
Co-Signer Personal Loans
Sometimes, you cannot qualify for a personal loan by yourself. This may be because of your age. A high school or college-aged individual will not have the credit rating to obtain a loan. You would need a co-signer with a good credit rating to obtain personal installment loans for good credit whether for a car loan or a student loan.
The Meaning of Defaulting on a Loan
The term default refers to your inability to repay the loan. If you stop making payments or fall behind in them, you default. If you put up collateral for a secured loan, you lose the collateral in the default. A default does not erase the debt even if the collateral was involved. The borrower remains liable for any amount of money the collateral did not cover. The lender can sell the item to recoup the money.
Financial institutions provide many opportunities for you to avoid default. They will try to work with each individual, sometimes restructuring the payment schedule. It is to their advantage to work with the loan recipient. The lender does not want to go through the copious amounts of paperwork needed to repossess a vehicle or foreclose on a home. These practices require court filings, incur legal fees, and may require court appearances. They default a loan as a last resort to recoup as much of the loan monies as necessary.
How to Avoid Default
You can avoid defaulting on a loan. It requires pre-planning.
- Do not take out a loan for more money than you can actually afford to repay.
- Keep at least six months’ worth of payments in a savings account. Has this saved before you take out the loan?
- Make sure you have reliable employment throughout the life of the loan at a pay rate that allows you to meet all of your bills and repay the loan.
Having six payments in a savings account ensures that if you do lose your job or your hours get reduced, you have a half a year cushion to repay the loan. This provides you a breathing room to find a new job.
Protecting Both Sides
While it may seem that the default process protects the banks and credit unions, consumer protections exist, too. These extend from consumer credit fraud protections to OLA guidelines for advertising. These protections coupled with the insurance provided by the FDIC protects consumers from unscrupulous lenders.
Loanry.com makes it really easy to find a lender who offers personal installment loans for good credit. Think of Loanry as a loan mall. Just like going to the mall to shop for jeans, you can go to Loanry to shop for a loan. It provides a safer route for you to find a loan. First, we only allow established, honest financial lenders in our mall. Second, we offer a single application for you to submit to initially hone down the list of personal installment loan lenders. Third, we provide you an extended knowledge base so you can make the best-informed decision when taking out a loan.
Loanry does not extend personal installment loans for good credit. Loanry simply indexes available honest lenders of many types. Some offer credit cards, some offer personal loans, some offer medical loans and there’s much more. If you find both purveyors of secured and unsecured loans.
Loanry is what the finance industry refers to as an online loan finder. The finder conducts the lender search for you and NEVER for a fee. This saves you time and you benefit from the finders’ existing knowledge of and relationship with the lender or through it’s third party participating partners.
Our initial form and all of our website’s practices follow OLA guidelines. We merely help you find a vetted potential lender whose minimum requirements you fulfill. If the lender decides they want to work with you may need to complete more than contact information by completing their full form.
Tips for Getting Personal Installment Loans for Good Credit
Even with great credit, you want to obtain a loan with amazing terms. You can help yourself qualify for the best interest rate and other loan terms possible by following these tips.
- Ask the financial institution for an interview with the loan officer. This provides you with an opportunity to prove your creditworthiness.
- Submit your last five years of tax returns as proof of your income.
- Give them a detailed job history to show your continued gainful employment.
- Provide a list and documentation of your most valuable assets.
- Provide a list of your unsecured debts. This could be a copy of your credit report or it could be a list you made.
- Bring copies of your bank statements for all accounts.
- Provide information and amounts of any alimony or child support you receive.
- Provide information and amounts of any other monthly payments or dividends you earn or receive.
When You Need the Money Fast
Some loans you can obtain really quickly. These are normally developed for those with bad credit though. Despite your good credit, you’ll be stuck with the interest rate at which these are offered. The benefit to them is that financial lenders use online applications and provide a response in mere hours. Some short term loan lenders will transfer money into your bank account the following day or later that week. If you need the money immediately, this provides it, but you’ll pay a higher interest rate, incur higher fees, and have limited flexibility on the re-payment terms.
Effects of Personal Installment Loans on Your Credit
Obtaining a personal installment loan online can help or hurt you. It depends on the circumstance.
How It Helps
If you do not have an existing credit history, you can build one by taking out an installment loan. This lets you build a positive credit history so long as you make timely payments.
You can use it to diversify your debt. Paying off these loans quickly with timely payments. This can help boost your credit score.
While dipping into savings carries zero interest, a personal loan saves you money over using a credit card. This lets you pay down the amount due more quickly.
If you make all the payments in a timely manner, you improve your payment history. Since you’ll have a payment schedule, this lets you show off your ability to plan ahead and budget.
How It Hurts
Let’s say you do miss some payments, or you are late. It goes on your record. Your credit history reflects it.
Any time you apply for any type of credit, it creates a credit inquiry on your account. Regardless of approval status, the inquiry lowers your credit score.
You will increase your debt level, even if it is your only loan. The exception to this is taking out a debt consolidation loan. This replaces your many loans and credit cards with a single loan. That still can hurt you if you close the revolving accounts once they’re paid off and if you had a number of loans.
One of the things credit reporting agencies use to calculate your credit score is the ratio of your total available credit to your debt. If you have five credit cards, for example, with a maximum available credit of $5,000 that are maxed out, but you take out a consolidation loan for $5,000 and pay them all off, then close them, you hurt your credit. That is because you went from having a potential debt of $5,000 between five entities to a debt of $10,000 very briefly between six sources to owing $5,000 to one source. By closing your credit cards, you erased your available credit and tanked your ratio.
So What Is a Good Credit Score?
Those with average or low credit scores may not understand quite how high a credit score needs to be to qualify as “good.” A good score equals 800 or better. Some lenders will still provide a low-interest rate to individuals with a score of 740 or better.
With a little extra work, like the bank interview and additional documentation, you can earn just as good of an interest rate with a score between 670 to 739. That area becomes the tipping point at which lenders look at supporting documentation to determine your creditworthiness.
You can still obtain a loan with a score of 669 or less but you will get a subprime interest rate. That means a high interest rate.
The lower your score dips, the harder it will be to even obtain a loan. You will end up likely resorting to payday loans or very short-term personal loans with exceeding high-interest rates. Legally, in the US, the interest rate could climb as high as 25 percent for prime applicants and much more for low credit sub-prime applicants. Would you rather take your time and save up the money or borrow it and pay it all back plus one-quarter of it on top of that?
On the other hand, if you do have a terrific credit score, this becomes your bargaining chip. You can negotiate for the best terms. You will have your pick of lenders.
Common Reasons to Borrow Money
A multitude of reasons exists to borrow money. Some of the most common reasons to obtain a personal installment loan for good credit include:
- fixing a car with a repair loan,
- buying a new home,
- buying a boat,
- opening a new business,
- remodeling or renovating your home,
- debt consolidation,
- student loans,
- wedding financing,
- vacation funding,
- medical loans.
Each of these common major purchases requires a significant monetary investment. Most people do not have hundreds of thousands of dollars saved to purchase a home and a car or to launch a business. They turn to banks or financial institutions to borrow the money via personal installment loans for good credit.
Few people have the money saved up to buy a house outright. They make a down payment of about ten percent of the total cost and take out a loan to make the remainder of the purchase payment. They then repay the cost of the loan, also called the mortgage, to the bank who holds the loan.
Another commonplace type of loan is car loans. These smaller loans for $10,000 to $20,000 allow a person to purchase a vehicle and pay the bank the monthly payments. It takes the risk off of the car lot owner by moving the financing to the bank. This provides the most common reason to obtain a personal installment loan for good credit.
Boat loans require a similar outlay of money as car loans, sometimes more depending on the size of the boat. The boat broker may partner with a financing company or you might go to your own bank for the loan.
Small Business Loans
Many businesses require equipment, supplies, and office space to start. The loans usually cover marketing collateral, too, such as business cards, letterheads, signage and advertising. There’s also hiring a consultant to draft a business plan and marketing plan. You really need the business plan to get a large loan though, so it’s common to either write the initial plan yourself or put the consultant fee on your credit card. The business plan includes sections on your expertise in the business field, competitive challenges, financial forecasts, and operating results and a line item budget of how you’ll use your loan.
Remodeling and Renovating Loans
These loans provide funding for you to renovate or remodel your house. This could refer to redoing the interior or to adding a room or wing to the home. These normally require collateral.
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These loans allow you to consolidate all of your debts under one loan. The lender provides you the money to pay all the other extensions of credit and you do so leaving only one loan. You can pay any type of debt using these loans – credit card, medical debts, other personal loans, student loans, etc. The result is you only have one loan and one payment to make each month. This is another very popular reason to turn to personal installment loans for good credit.
You might not have thought of student loans as personal installment loans, but they are. While in school, whether a vocational school or college, you receive a loan. The repayment is normally deferred until you leave school. You will have a short grace period then begin repayment.
These loans can feature a fixed interest rate or a variable interest rate. Interest accrues after the grace period ends. This can increase monthly payments.
Yes, you can obtain a loan to pay for your wedding. It is advisable to save as much money for this big event as possible and only take out a loan for what you really need. You need a really good credit history to qualify for this type of loan. You can find some event halls and event spaces that finance rental.
Although it is better to save the money up for vacation sometimes things happen, and you have to use your savings for an emergency. Then you need the vacation even more so. When that happens, you can obtain a loan to get going. These can be secured or unsecured loans. As a secured loan, you use your home’s equity to obtain an affordable interest rate. Unsecured vacation loans carry high-interest rates though. This does normally cost less than using your credit card.
You can obtain a personal installment loan for good credit for a medical emergency. You will end up paying the medical costs plus the loan interest, but it will let you spread out repayment. It does ensure that you will have money for treatment.
Loanry connects people in need of capital with an array of available lenders. Whether you need an auto loan, personal loan, student loan, or another form of loans, we’ll help you find a trusted lender who may offer the kind of loan you’re looking for. We also provide free tips and money tools, so you can learn about the pros and cons of using a quick cash loan, traditional-term business loans, or find out if it’s a good idea to pursue an emergency car repair loan or refinance those student loans. Loanry provides financial access and education so you can make the right choice for you.
Visit Loanry today to find a lender who may provide the best fit for you. Our service may help you find a lender that offers the loans you need at an interest rate you can afford. We do not lend you the money. We introduce you to financial institutions that can. Get a personal loan online by using Loanry finder service. Enjoy personal loan shopping from home 24/7.
Carlie Lawson writes about business and finance, specializing in entertainment, cryptocurrency and FOREX coverage. She wrote weekly entertainment business and finance articles for JollyJo.tv, Keysian and Movitly for a combined seven years. A former newspaper journalist, she now owns Powell Lawson Creatives, a PR firm, and Powell Lawson Consulting, a business continuity and hazards planning consultancy. She earned BAs in Journalism and Film & Video Studies from the University of Oklahoma. She also earned her Master of Regional & City Planning at OU. Her passion lies in helping people make money while reducing risk.