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7 Important Things to Know About Personal Loans

Posted on | by Julia Peoples | Leave a Comment on 7 Important Things to Know About Personal Loans

Thinking about personal loans can be a stressful situation. Often times, we approach it as though it is a bad thing. It is almost like “here I go again, I need something I cannot afford”. While there are times when that is true, it does not always have to be bad. A personal loan can be a good thing for you and your financial picture. The key is that you must use it properly and for the right things. I am going to help you understand the good and bad ways to use a loan. Personal loans are not something you should fear, but there are some important things to know about personal loans. Keep reading as I dive a little deeper into the top 7 things you should know about personal loans.

What Is A Personal Loan?

Before we can talk about all the things to know about personal loans, it is important that you fully understand a personal loan. A personal loan in its most basic definition is a fixed amount of money that someone lets you borrow. You promise to repay that amount of money plus a little extra every month until the loan is paid. Seems fairly simple, right? Well, there are some details that I brushed past that are important for you to understand. That someone letting you borrow money is a lender and it is typically some type of financial institution. Personal loans go by many names. You may hear it referred to as consumer installment loans or an unsecured loan. These are all still personal loans.

I mentioned plus a little something extra. That is called interest. The amount of interest you pay changes based on the lender and on your credit. We will come back to credit in a bit. The amount you pay back each month remains the same and you pay it back for anywhere between three to five years. This is all determined before you sign the loan contract. There is often a bunch of fine print. Be sure you read all of that.

Are There Different Kinds Of Personal Loans?

I mentioned earlier that a personal loan goes by many different names. There are also many uses for personal loans and some different types of loans. These are also things to know about personal loans when deciding what to do. You can use a personal loan for just about anything you want. A lender asks you the purpose of the loan, but that really is not a factor in your approval.

Personal loans are often used to consolidate debt or to pay off major medical expenses. When you find yourself in an emergency situation and you are short on cash, a personal loan may be the answer for you. It is important to remember that a personal loan is not the long term answer. You have to pay back the loan each month, so it is important to make sure you can afford to pay it back. Today it is much easier to apply for a loan. You can even get personal loan online in a matter of days. There are loans such as payday loans and cash loans bad credit. 

The Thought Of A Personal Loan Scares Me

That is completely understandable. Obtaining a personal loan and adding more debt to your life can be a scary thought. The key is to know everything you can about personal loans. When you truly understand the personal loan process, the thought of it is less scary. Understanding all the things to know about personal loans helps you make an informed decision instead of an emotional one.

Remember that a personal loan can help you improve your financial picture when used properly. If your credit is not that great, it can help you improve your credit score when you make your payments timely. A personal loan can help you consolidate your debt so you can focus on one payment instead of multiple smaller payments. This can help you decrease your total amount of debt faster because you can focus on just one debt. It also helps you mentally by focusing on just one bill to pay instead of attempting to pay many different bills.

Important Things to Know About Personal Loans

If you decide to take out a personal loan, you should definitely explore the entire process to get to know the benefits and the disadvantages. But there are some key things we decided to point out, so you’d know what to pay special attention to.

Important Thing To Know About A Loan #1 – Credit

I know this is a topic that few people ever want to discuss. Even the mention of the word credit concerns people. Credit is definitely an area where the more you know, the better you are. This is one of the top things to know about personal loans. I am going to start with basics when it comes to credit.

Your credit score is a three-digit number that appears on your credit report. There is a difference between your credit score and your credit report. Your credit score is on your credit report. Your credit report shows your credit history. It lists all your debts and it shows your payment history, the good and the bad. Items tend to stay on your credit report for 7 to 10 years. It takes a long time to build your credit, but just a few missed or late payments send it plummeting.

A typical credit score ranges from 350 to 850. Most people have a credit score somewhere between 600 to 750. Good credit falls somewhere between 670 to 800. Anything below 570 falls into the danger zone of bad credit. When you have bad credit, it is much harder to get a good interest rate. You may find it is difficult to be approved for a loan, if you have bad credit. It is still possible to get a loan, but you have to work harder and do more research.

What Do I Do If I Have Bad Credit?

One of the important things to know about personal loans is that your credit is the reason personal loans are commonly denied. You should pull your credit report and look at your credit score once a year. This helps you remain in control of it. You can also check it for errors, so you can address them. If there is an error on your credit report, you must take steps to correct it. If you do not know your credit score, you cannot do anything to improve it. You can reduce the amount of debt that you have.

Lenders look at something called a debt to income ratio. This is the amount of debt that you have compared to the amount of income you have. You need to lower your debt to help improve your credit score. Another thing you need to do is begin to create a positive credit history. You can do this by making sure that you pay all of your bills on time and for the correct amount. Late and missed payments are the leading cause for a poor credit score.

Another factor that hurts your credit score is your income and job history. If you have low income, you should work hard to improve that, or find an additional job until you can improve your credit score. Lenders look at the amount of time you have been working for the same employer as part of your credit history. When you have one employer for a long time that shows them you are stable. When you bounce from job to job in short periods of time, or have periods of no employment, that makes then think you are not stable. This makes them think that you are not a good candidate to pay back a loan.

How to Improve Your Credit Score Without Crying

 Important Thing To Know About A Loan #2 – Income

Since we are talking about employment history, let us talk a little deeper about income. You may not realize just how much that impacts your ability to obtain a loan. Add this to the list of things to know about personal loans. Not only does a lender want you to have stable employment and a good income, but they also want you to prove it to them. Lenders require you to show proof of income for personal loans  if they think they might consider approving you for a loan. The most obvious proof of income is a pay stub, but not everyone has typical employment. There are many people who are self-employed or do contract work or possibly even receive payment in cash. They still need to show proof of employment.

Other ways to show proof of employment are a W2. This is a tax document that shows how much money you have made in the previous year. This, however, may not show the income that you received in cash. You can use a tax return as proof of income. This document shows all of the income that you claim, along with any losses that you claim. You must remember that this document shows only the income you claim. You have made income and you are not reporting it as such, it does not show up on your tax documents. Doing so may also cause you problems later with the Internal Revenue Service (IRS), so I would not recommend you do that.

Lenders may also accept bank statements as proof of how much money is going in and coming out of your bank account. It shows your deposits which could be income. Again, this document only shows money that is deposited into your account. If you have cash or money is being deposited elsewhere, it will not show up on that bank statement.

Important Thing To Know About A Loan #3 – Interest Rates and Fees

Interest rates are an annoying thing that always accompanies a loan you get from a lender. Rates and fees are absolutely things to know about personal loans. They can make a big difference in the amount of money you are paying back each month. I am going to list for you some of the common fees and terms you should look for when it comes to personal loans.

  • Principal amount – this is the actual amount of money you borrow. The lender adds interest on to this amount. Typically, lenders have a maximum amount they lend for a personal loan.
  • Interest rate – this is a percentage of your loan. This is added on top of your principal amount you borrow. They are usually a fixed rate. They can be anywhere from 7 percent to 30 percent depending on your credit.
  • Term length – this is the amount of time you are paying back the loan. They are usually fixed, so unlike credit cards, you pay the same amount each month.
  • Prepayment penalties – this is the amount some lenders charge if you pay back the loan before the end of the term. Remember the lender makes money based on the amount of interest they charge. When you pay off the loan sooner, ultimately you are paying less interest and the lender is making less money. They do not often like that. Be sure to read the fine print to determine if there are any early repayment fees.
  • Additional fees – always read the fine to understand any fees you may pay.  A lender must disclose all fees and penalties in the contract before you sign it. It is, however, up to you to read it. Be sure to look for any origination fees, application fees or service charges.

Important Thing To Know About A Loan #4 – Documents

Lenders require many documents in addition to the proof of income we talked about earlier in this article. These are things to know about personal loans before you apply for a loan. If you understand what documents you may need to provide, you can work to get them together and have them ready. This may shorten the length of time for your waiting period while the lender makes a decision on your loan.

Lenders require documentation such as proof of identity. It is important that the lender knows you are who you are claiming to be. With all the identity theft out there today, they cannot be too careful. This is put in place to protect you and the bank. You often must provide a drivers license or some other form of picture ID. That could be a passport, military ID, or state ID. Please make sure that this identification card is not expired. They do not accept expired documents. The lender may also ask to see your Social Security card. This tends to be an optional document only if they need other supporting documentation to verify your identity.

You want to make this process as easy as possible for the lender. Remember, you are asking them if you can borrow money from them. You should provide them any documentation they need. These documents are in addition to the ones we discussed earlier, such as paystubs, tax returns and bank statements.

Important Thing To Know About A Loan #5 – Defaulting On A Loan

Let us talk about defaulting on a loan for a minute. I do not want to spend much time on this because it is something you should avoid at all costs. However, being in default is one of those things to know about personal loans. Basically, when you default on a loan it means that you are not paying the loan. Lenders differ in their definition of default. Some lenders say it is one missed payment. Other lenders give you a grace period of several months before they say you are in default.

No matter what your lender considers default, you want to avoid it. You should also know that a lender will get its money. It does not matter what that lender has to do. They may turn you over to a collections company. Or, they may sue you. They may take you to court and have your wages garnished, but they get their money.

You should focus on always paying your bills on time. If you are not able to pay your bills, then you should be honest with the lender. Call them and let them know you are having difficulty paying the bill. Most of the time a lender is wiling to work with you. It does not benefit them when you do not pay your bills. If they can set up a different payment plan with you, they will make every effort to do so.

Important Thing To Know About A Loan #6 – Pre-Qualified

Pre-approval and pre-qualified are confusing terms that lenders like to throw around a lot. They are things to know about personal loans, so I want to talk about it a little bit. You probably have received those invitations in the mail from lenders stating that you have been pre-qualified and pre-approved. When a lender says you are pre-qualified, it means they have done a soft hit to your credit. That means that lender has looked at your information, but hasn’t done anything that would impact your credit score. The lender took a quick look at your information and believes that you may qualify for a loan with them. However, this does not guarantee your approval. You can still be denied when you apply for the loan and the lender pulls your full credit report.

A hard pull of your credit report requires your approval because it is a hit to your credit report. The lender is able to see everything on your credit report. At times, you may receive a pre-approval from a mortgage company. This is important when you are trying to buy a home. These often are more of a guarantee of approval. For a personal loan, you do not often get those guarantees.

Important Thing To Know About A Loan #7 – Loans For Bad Credit

Earlier in this post I talked about credit and mentioned that if you have bad credit, you have to work a little harder to get a loan. That is still true. Bad credit does not stop you from getting a loan, but it makes it harder. It is one of those things to know about personal loans. Do your homework and it can save you a lot of money in interest and fees. You know that your interest rate is based primarily on your credit score. Also, you know that you can improve your credit score, but it takes times and consistent effort. You do not have time because you need the loan know.

In these cases, you should look for lenders other than a typical bank. Credit unions often cater to those with less than perfect credit and their interest rates tend to remain reasonable. You can apply for a loan with an online lender. The application turn around time is just a few days. It is fast, but often comes with a higher interest rate. Be cautious not to get sucked into fast cash loans bad credit that you cannot afford. It may be tempting but remember you always have to pay it back per the terms of the agreement. If you are not able to do that, walk away from that loan and find another one that fits for you.

We Can’t Forget Budgeting

Since we are talking about a loan that fits for you, it makes perfect sense to talk about budget. You probably thought you would get through this article without having to talk about a budget, didn’t you? Guess what? It is not going to happen. Creating a budget is important and if you do not have one, you need one. If you have one, you need to follow it. This is one of those important things to know about personal loans.

A budget helps you determine how much of a loan you can afford to pay back. You should start by simply writing down all your expenses in one column and all of your income in another. Add up the expenses and if it is more than your income, you cannot afford to pay back a loan. Not only that, but you should begin to decrease some of those expenses. Maybe you can do that with a consolidation loan, depending on the expenses. Maybe you can remove some of the things you are paying for each month.

For example, do you buy lunch everyday? Maybe you can take your lunch instead of buying it and see how much money that saves you per month. I am willing to bet that small change could save you almost $300. You can make simple changes that make a huge impact on the amount of money you have each month. You may determine that by cutting some costs, you do not even need a loan. But, you cannot do these things until you actually sit down and begin to look at how much money you are spending each month.

Do not look at it as a bad thing. Think about it as you taking control of your money and your life. This is an opportunity for you to be in control instead of your money controlling you. It is a powerful place to be and it feels really good. One of those things to know about personal loans is that you always have to pay it back. It is not free money.

Conclusion

In all this talk about the things to know about personal loans, I did not talk much about your ability to afford the loan. It is incredibly important that you make sure you can afford to pay back the loan before you apply for it. You should not enter into a loan contract lightly. You should take the time to consider if this is the right decision for you. If it is and you can pay it back, go for it. However, if you know you cannot afford to pay back the loan, you should stop here.

In all the things to know about personal loans, it is key to remember that you have to make a monthly payment until the loan is paid. Most often, that first payment is within 30 days of you receiving the money. There is not a grace period. The lender want their money to come back to them quickly. You do not want to negatively impact your credit because you took out a loan that you already know you cannot afford to repay. You should look into other options if a loan is not the right one for you.

Does a Bankruptcy Include a Personal Loan?

Posted on | by Julia Peoples | Leave a Comment on Does a Bankruptcy Include a Personal Loan?

If you are in a position where you are considering bankruptcy, you are already in a bad spot. Filing bankruptcy should be a last resort. You should only consider this when you are completely out of options. You should think of it as the end of the road, or rock bottom. Once you are there, you have to work really hard to get yourself out of it.

Bankruptcy of today is different from in the past. Today not all debts are written off under the bankruptcy umbrella. However, even under the new rules, bankruptcy include a personal loan as a debt that is discharged. Keep reading to find out more information on bankruptcy and how to avoid it.

Let’s Talk About Debt

If you are thinking about bankruptcy, you may not fully understand how debt works. To make good decisions, you need to know all the information. I am going to share some basic information about debt. You may already know this stuff, but hang in there with me. Debt is not always a bad thing.

It must be used properly and in moderation or it becomes a monkey on your back. Debt is the way you make big purchases, like a house, or car. We cannot afford to pay for a house in cash, so we take on debt to buy a house. This means, a lender gives you the money for the house and you sort of become co-owners of it. They are the strong silent type, so as long as you pay them what you promised each month, they leave you alone. However, when you do not pay as promised, they can take back the house.

When you have too much debt, you put yourself in a position where you owe more money than you earn. When this happens, you can no longer pay the bills and you miss payments. The debt piles up higher, your credit score drops and the collection calls start. I got a little ahead of myself there.

You take on debt to borrow money to pay for things you cannot afford outright. When you do that too often, you fall into a cycle of not being able to pay any of your bills. You should work hard to prevent this. If you know how much debt you can afford, you can prevent yourself from drowning in debt.

What Is Bankruptcy?

Nolo, an internet site for legal information and assistance, states bankruptcy is a way to get a “clean financial plate as a fresh start”. Most individuals would file Chapter 7 bankruptcy. This allows the debtor, the person filing bankruptcy, to have certain debts wiped away. Filing bankruptcy is not as easy as it once was. Not everyone qualifies for bankruptcy and not all debts are removed.

The debtor is still responsible for student loan debt, income taxes, and child or domestic support. Before considering filing for bankruptcy, make sure you understand all of your debt to ensure it qualifies. Keep in mind that filing bankruptcy has a negative impact on your credit report and may stay there for seven years.

Are Personal Loans Discharged During Bankruptcy?

Yes, personal loans, including loans from family and friends, are discharged as a result of bankruptcy. During bankruptcy legal obligations are discharged, which means that you are no longer obligated to pay those debts. Bankruptcy include a personal loan, credit cards, and medical bills. This means these debts go away and the debtor does not have to consolidate them into one monthly payment. There are a few catches. The debtor must agree to sell some of your property to pay back the debt. Some property is protected under state laws.

Here is a short list of Debts Included in Bankruptcy including Personal Loans

  • Credit cards
  • Unsecured Loans like Personal loans
  • Car repossessions or Title Loans
  • Bills for Medical Expenses
  • Foreclosures
  • Legal problems and judgments
  • Outstanding rent payment
  • Utility Bills

Please note that you should also talk to a bankruptcy attorney to discuss other debts that may fall into the above list and other implications of a bankruptcy.

Is Filing Bankruptcy A Good Idea?

There is not one good answer that works for everyone. It depends on your situation. Bankruptcy should always be a last resort when you have no other options.

Smart Money Tips!

You need to consider if you are willing to have something on your credit report for seven years that will seriously impact everything you want to do. Also consider if you are willing to sell all your assets, except the ones that you really need. You may think, “well, I don’t have any real assets to lose.” That may be true.

Perhaps your credit score is already in a bad place and it cannot go down too much further. When you are faced with no other options and you feel yourself drowning in debt, possibly this is the right move. You know bankruptcy include a personal loan and potentially other debts, so it may be right for you.

Do I Have Other Options?

There are definitely other options you should consider before bankruptcy. One of the first things you should consider is consolidating your debt to a lower interest. When you do this, you are getting personal loans for bad credit to pay off all of your debts. This way you have only one payment per month. You pay off all of your single debts and focus on just this one.

It may not impact your credit score at all, or impact it minimally. You may face higher interest rates, but it might be worth it to you in the long run. Getting personal cash loans may be a viable option for you. Perhaps you can borrow money from a family member, or friend. You may want to consider borrowing a loan from your own 401k. These all may be better alternatives to considering bankruptcy include a personal loan.

Can I Negotiate To Lower My Debt?

If a personal loan is not for you or you cannot get personal loan online, you may want to consider negotiating your bills instead. You probably have a decent amount of bills each month. How do you know if you are getting the best deal? Research, my friend, research. You have to advocate for yourself. Let’s face it, businesses are out to make money. After all, that is why they are in business.

They are not going to determine if you can get a better deal and save money. You have to do that for yourself. Once you do all the research to see if there are better plans or rates available, you have to call each company, or credit card to negotiate a better deal. This takes time, but it can save you hundreds of dollars per month. In the end, it may not save you from facing a bankruptcy include a personal loan and other debts, but it just might.

The last thing lenders really want is for you to default on what you owe them. They do not even want you to file for bankruptcy because they probably will not get any money that way. If you are honest and up front with them, they may be willing to negotiate with you to create payments you can afford, so they can get most of their money.

If I File Bankruptcy, Then What?

You decide to file bankruptcy, so now what? There are some things that you need to know that you probably do not. Bankruptcy is going to cost you. You already know it is going to take time and it is going to be a hit to your credit. You also know that you may have to give up some assets. It is also going to cost you money. You need a lawyer to handle the process. The more complex your situation is, the more you have to pay the lawyer.

On top of the lawyer, you will have court costs and other fees. Funny isn’t it? You are working hard to get out of debt by paying out more money that you have already said you do not have. If you decide to go through the process, you should constantly monitor your credit report. Not only will it be a black mark for seven to ten years, but some of the information may be wrong. If it is wrong, you need to dispute it to have it removed. Remember, while bankruptcy include a personal loan, it may not include all of your debts.

What Happens To My Credit?

You know that filing bankruptcy impacts your credit, but let’s talk about just how much. Your credit score can decrease by about 160 to 220 points. That is significant. If you have good credit before bankruptcy, it will be poor by the end of it all. That type of decrease makes it really challenging to obtain new credit, such as a credit card, car or house. At the time when you are considering bankruptcy, you may think that you need to take care of the immediate problem.

You may not think of the long range implications. But, ten years is a long time and so many things can change. Be aware that making a bankruptcy decision impacts every decision you make for the next ten years. It may seem like the answer now, especially when bankruptcy include a personal loan and most other debts. However, it may not always be the best answer.

Can I Repair My Credit?

I told you the bad news, so now I want to brighten things up a bit. All is not lost as you can repair your credit. It takes hard consistent work, but it is possible. When you plan on a bankruptcy include a personal loan and other debts, you should already start thinking about fixing your credit. It is an uphill battle, for sure. However, many people have faced bankruptcy and were able to turn it around. You can, too. You just have to be focused on that goal.

Start by having a positive payment history. Any bills that you keep after bankruptcy, you should pay them in full and on time. You could get a credit card, even if it has a low limit, and begin to build some positive credit again. When you use the credit card, plan to pay it off each month in an effort to build positive credit again.

What Kind Of Loans Can I Get After Bankruptcy?

When you are working to build credit after bankruptcy, you should be careful. You do not want to end up in the same place you were before filing bankruptcy. You also do not want to take out any kind of loan that puts unreasonable repayment expectations on you.

Loans such as paydays loans may not be in your best interest. Payday loans must be paid back within two weeks. You must pay them in full. You may want to consider short term loans that you are able to repay. Typically, these are loans for small amounts and they must be paid back in a short time frame, such as a couple of weeks. Before you consider taking on this type of loan after bankruptcy, be sure you can repay it on time. Keep in mind the purpose is to repair your credit.

You can look for the best loan for you here, on Loanry. The best part of shopping online for a loan isn’t just that you don’t have to go anywhere, it’s also goes extremely quickly. You can get offers from lenders within next few minutes and see what your options are.

A Little Bit About Budgeting

It is never too late to learn how to budget your finances. The sooner you create a budget for yourself, the better able you are to control debt. If you do not control your debt, it will control you. There are some key points to remember when it comes to budgeting. First, you must know your income and all your expenses. You have to write it down. Do not guess because you will forget something. Then, you must organize it all and put it into categories. Then, you rank the importance of each expense. When taking these actions, you must be critical.

Let me give you an example:

Food is important and it should be ranked high. However, eating out is not important and should be ranked low. There are many more affordable ways to eat than eating out. When creating a budget for food, you should call it groceries. Then, you should consider the most affordable way to buy your groceries. This may seem like a tedious task, but once it is done, you will not have to recreate it all over again. You will most likely have to tweak it, but not redo it. In this technological world, there are many budget websites to help you.

Secured vs Unsecured Loans

When you are looking to use a loan to improve credit after bankruptcy include a personal loan and other debts, you may need to consider a secured loan. An unsecured personal loan is one that does not have any type of collateral attached to it. This is risky for the lender because if you default, they lender typically loses most of its money. A secured loan is one that has collateral attached to it. If you default on a secured loan, the lender can take your collateral as their own. This happens most often with cars and houses. You use the car or house as collateral and if you default, the lender takes them.

You could also consider having a co-signer on any type of loan for which you apply. A co-signer is agreeing that you will pay the loan. If you do not pay the loan, your co-signer must pay the loan for you. If neither of you pay the loan, it impacts credit for both of you. This also gives the bank more security that you will pay your loan on time.

That Budget Thing Again

The Best Way to Create an Emergency Fund: Money 911

It always comes back to your budget.It is important that you save money. I know it often seems impossible, but save a little bit of money with each paycheck. If you do not touch it, you will be surprised at how quickly it adds up. You can have that money for emergencies and protect yourself from considering bankruptcy include a personal loan. When you have some money saved in the bank, it can save you from a lot of stress. It is never too late to create a budget. Taking care of yourself includes securing your finances. You can take control of them today.

Conclusion

This posting has focused heavily on bankruptcy include a personal loan and other debts. It is not just about bankruptcy. It is also about securing your finances and preventing bankruptcy. No one makes that decision lightly. You should consider the short term and long term implications of filing bankruptcy. When you arm yourself with knowledge, you can save yourself a lot of headache.

How to Get a Personal Loan Without Hurting Your Credit

Posted on | by Brandy Woodfolk | Leave a Comment on How to Get a Personal Loan Without Hurting Your Credit

After you have spent some time working on your credit and finally see some improvement, the last thing you want is to mess it up again. Sadly, your much better credit score will not prevent an unexpected expense from popping up. Suddenly, you need money that you do not have. Now you need to find a loan but you do not want it to undo all of your hard work. Is it possible to get a personal loan without hurting your credit?

In truth, a personal loan can only do one of three things: improve your credit, hurt your credit, or not touch it at all. If you get a loan and make your payments on time, it will improve your credit score. If you do not pay on time, it will hurt your credit. However, there are some loan companies that will not check your credit or report your payment history. If you want to get a personal loan without hurting your credit, this information can help.

Get a Loan With No Credit Check

There are, indeed, loan companies that do not even check your credit to approve you, but most require collateral or charge high-interest rates- or both. For instance, neither title loan companies nor payday loan companies always check your credit, but both may require collateral and can charge high-interest rates. While you can get a loan without a credit check, you need to carefully consider the consequences that go with it. The following are some loan types that do not require credit checks.

Personal Loan from Family or Friends

Some people have loved ones that can help them out when they need it. If you do, this might be the best option for you since it might be the simplest one and it will not affect your credit. However, money can tear relationships apart, so if you do borrow from a loved one, pay them back as soon as possible.

Credit Card Cash Advance

Most credit cards offer the ability to get a cash advance from your available credit. As the credit is already available to you, there is no need for a credit check. The trade-off is that there are usually fees for the withdrawal as well as high-interest rates. Before you go with this option, find out how much a cash advance from your card will cost you.

Payday Loans

Payday loans are extremely easy to attain. Pretty much anyone with a regular income and an active checking account can get approved. Since the borrower is putting up collateral, there might be no credit check is required. However, they come with high interest rates so if you cannot pay the full loan and interest on your loan, this is not a good option.

Title Loans

Title loans are similar to payday loans. They require collateral instead of checking your credit. If you have a regular income and a vehicle that has enough value, you can usually get approved. Also similar to payday loans is that title loans have high-interest rates- really high-interest rates. If you choose a title loan and you cannot pay it off that first payment, you are in for an expensive cycle.

Some Unsecured Personal Loans Online

You can also shop personal loans online, but if you get a hard inquiry it can affect your credit. By using the correct search terms, i.e. “no credit check”, you will likely find a list of lenders that you can apply with. Some people find it much easier to get a personal loan online than in person.

How Does A Personal Loan Effect Your Credit?

Other Secured Loans

A secured loan is simply a loan that is connected to collateral, making both title loans and payday loans fit this category. Fortunately, there are some other secured loans available that are a bit less drastic. For instance, your bank or credit union might approve a loan using your savings account as collateral. Some banks will also use your car title as collateral, but the interest rates are generally much lower than with a title loan company.

Bank Statement Loans

One of my new favorite topics is bank statement loans. For years, freelancers, self- employed people, or others with unconventional and irregular income, such as tips, have been pretty much out of luck when it comes to getting a loan with a decent interest rate. In fact, we have been stuck going for title loans- at least I have. Most lenders do not want to approve a loan for someone that does not have a steady income.

Then, a wise person noticed this market gap and jumped on it. Someone realized that just because a person does not have an hourly rate of pay, it does not mean that person cannot afford a loan. And so bank statement loans were born. A bank statement loan is a pretty simple concept. Instead of checking credit and asking for check stubs, the lender will ask for 12 – 24 months worth of bank statements. Your ability to repay the loan is based on deposits and any other bank activity they factor in.

Most often, this term is used for mortgages but that is not the only type of bank statement loan available. Freelancers, the self- employed, servers, and contractors finally have a fair shot. And these loans are a perfect choice for someone with bad credit.

A Previous Lender

If you have borrowed from a lending institution in the recent past, there is a chance that you could get another loan based on your repayment of the first one. This may not always be the case, though. A quick phone call to that lender can tell you whether or not they would run your credit again.

Where to Get a Loan?

When it comes to getting a personal loan, you have many options. As mentioned above, your bank or credit union is always a possibility. Remember though to always compare their interest rates to others. It is not necessary to pay really high interest just because you bank with them. Also, most cities have at least a few lending institutions around. You can call them or drive around and speak to them in person.

In my humble opinion, the easiest way to find a personal loan without hurting your credit is by finding an installment loan online. It is much easier to locate lenders that match specific criteria, i.e. “no credit check”, online. You can also start the application with multiple lenders at once, decreasing the amount of work you have to do. Using a platform like Loanry is helpful to find a trustworthy lender that might match your needs. As an added benefit to online loan shopping- and a favorite of mine- you can apply from your couch in your pajamas with bedhead and no one will ever know.

The Next Step

If you cannot find any credit check loan, you might try looking for one that can approve you based on a soft inquiry. Each company that runs your credit either makes a soft inquiry or a hard inquiry. Do you know those pre-approvals for loans and credit cards that show up in your mailbox? You are pre-approved based on a soft inquiry. It is basically a surface credit check. These do not count against you because no one needs permission to run them. Otherwise, you probably would not have any of those pre-approvals.

A hard inquiry is quite different. At some point, you have likely signed a document for a job, a loan, or something else that asked for your permission to run a credit check and background check. These are for that company to do a hard inquiry, which is a hit to your credit. This is when they dive deep and dig up all the juicy details of who you owe, how much you have owed it, and for how long.

Do understand, though, that this type of hit on your credit is nowhere near as bad as an unpaid account, and it will not stay on your report as long. It might bring your score down a few points but it probably will not be a big enough impact to alter an approval decision. It merely states that someone has looked into your credit lately. And if that hard inquiry can get you a loan with a low interest rate and great terms, it is worth the temporary hit on your credit.

You will likely find that most unsecured loans will run a hard inquiry, but a few might approve you based on the results of a soft inquiry. By asking questions and reading the fine print before applying, you should have no trouble distinguishing between those that perform hard inquiries and those that do not.

Which Way Should I Go?

The direction you take should depend on the answer to the following question: What is your purpose for the loan? Do you need the loan to pay for something, or is it just for building or fixing your credit? All loans are not created equally, so treating them equally can be a costly mistake. Some loans are better suited for credit building than others, and some are better suited for bill paying.

Being clear on your purpose will help you choose your path. For instance, if your purpose is to build your credit, a loan from family or a friend is not going to help- unless, of course, they own a financial institution that reports to the credit bureaus. Otherwise, you are out of luck. Additionally, most payday loan and title loan companies do not report to the credit bureaus- unless you do not pay them. In order to discourage opting not to pay, they will report non-payment. So title loans and payday loans are not a tool for building credit, but they can destroy it if you are not careful.

At the same time, if you need money for a bill, a secured loan is probably going to be counterproductive, especially if you need to put up the same amount of collateral as the loan you are receiving. So, again, the purpose of the loan should guide you through the decision process.

How Do No Hard Credit Check Loans Work?

Commit to Repaying Your Loan

Finally, there is one very important step to getting a personal loan without hurting your credit. Are you ready for some outstanding advice? If you really do not want a loan to hurt your credit, here is what you need to do: pay it back on time. That’s it, you just need to do what you agreed to when you got the loan. If you repay it on time it can do no damage because you held up your end of the agreement. And as backwards as it may sound, the first step in repaying a loan is only borrowing what you can afford to repay. Otherwise, you are asking for trouble.

While making every single payment on time should be the goal, it is not a perfect world, so you need a plan. The saying, “When you fail to plan, you plan to fail,” is extraordinarily accurate in the world of finance. Without a plan, you will likely end up in an uncomfortable amount of debt, and that is not somewhere you want to be.

I have heard people say that planning is a waste of time because plans always change. As a homeschooling mother of four from kindergarten to high school, I am well- versed in how quickly and easily plans can change. I actually cannot think of a single school day in the last twelve years that something did not change. Yet if I try to start our day without a plan, I am lost before I start.

Keep in Mind That Plans Will Change

They are fluid, not concrete, and that is okay. You do not need them set in stone- you simply need a map to guide you in the right direction. In the case of repaying the loan, making a plan is really simple. You need only to know when payments are due, how much is due for each payment, where exactly the money will come from to pay that payment, and how you will make the payment, i.e. automatic debit or cash in person.

Once you have your basic information, repaying your debt comes down to committing to the plan. Write the date in your planner or add it to your Google calendar so you will be reminded every month. If you need to, have a friend or family member ask you every month if you have made your payment yet to keep you accountable.

Also, acknowledge the fact that we humans have a “reward center” in our brains. If you attach a task you do not love to a reward, you are much more likely to complete the task. Give yourself a small reward after each payment, or a large reward once you have paid it off. It can be as simple as taking a bubble bath or as elaborate as an island vacation. Choose a reward that: 1. You can afford without taking out another loan, and 2. That will actually motivate you. The actual reward you choose is completely up to you.

If the worst occurs and you absolutely cannot make a payment, face the situation head on. Call your lender and explain your situation. Unless you are late for many payments, they will likely work with you instead of immediately reporting a missed payment. They really get nothing out of reporting you. They would much rather get their money back, even if it takes a little longer than planned. Speak to them as soon as you know you cannot make the payment. The earlier you explain, the better.

Conclusion

Your credit can affect your entire life. It can dictate where you live, where you work, what you drive, and more. If you find it necessary to get a loan, or you just want to build your credit, you need to be careful with it. The goal is to get a personal loan without hurting your credit. If you know that you cannot repay it, do not risk it if it can be avoided. If it cannot be avoided, do everything you can to pay every payment on time. This may require working overtime or getting a second job, but it is worth it to protect your credit. Be vigilant in your choices and diligent in your planning so that this experience can improve your credit instead of hurting it.

How to Get Pre-qualified for a Personal Loan?

Posted on | by Julia Peoples | Leave a Comment on How to Get Pre-qualified for a Personal Loan?

Everyone comes to a point in their lives when he or she needs a loan. It is impossible to own things without having to borrow money in some way. That may be a mortgage for a house, a loan for a car, or credit cards. These are all basically loans. I know finances can be a difficult subject. Often times, people do not want to talk about money. However, you cannot hide from it. The more you understand about loans and finances, the better you are. Once you know all the information, consumer loan options are not the scary. Keep reading to become more informed about loans and getting pre-qualified for a personal loan.

What Are Personal Loans?

If you think you are interested in obtaining one, it is important first to understand how personal loans work. You probably have a basic understanding, but when it comes to obtaining a loan, the more information you have, the better. Let us start with the basic information. A personal loan is when a lender allows you to borrow money. You then agree to repay the loan with regular, scheduled monthly payments for a set amount of time. The length of time is typically anywhere from three to five years. You are given the money in one lump sum. Most of the time, it is deposited directly into your bank account. Personal loans can be secured or unsecured. Sometimes, you can be pre-qualified for a personal loan.

There are typically fees associated with personal loans. The fees that you might see are an application fee, an origination fee, and an early termination fee. There also may be administrative fees and late fees. Be sure to read the fine print of any documents you sign. The loan documents outline all the fee associated with your loan. Of all the fees, the one you should avoid is an early termination fee. This fee is applied if you choose to pay off your loan early. Not all lenders add on this fee, but some do, so be aware. Lenders make money on a loan when they collect interest from you. If you pay off the loan early, the lender will losses all the money they would get from your interest.

How Can I Get Pre-Qualified?

Now you want to know how to get pre-qualified for a personal loan. I am sure that you would like some magical answer that makes everything simpler. I do not have one for you. The best thing you can do for yourself when it comes to getting pre-qualified for a personal loan is take care of your credit score. Keep your credit score in good shape and you will not have any lending worries. That is honestly the best thing you can do for yourself. You do that by pulling your credit report on a regular basis. You should do it once a year to check for errors. This also allows you to see your credit score, so you know where it is.

Pay your bills on time and in full. Whatever the amount is that you owe, pay it and pay it on time. Reduce the amount of debt that you have. Make sure your debt to income ratio is not off the charts. I know these tips are not setting the world on fire. But, these tried and true ways are the best way to protect your credit score. You can also get some stability in your life, if you do not have it. Do not bounce around from address to address. Make sure you have some stability in your job. I know many millennials try not to stay in one job for a long period of time, but that can hurt your credit.

Pre-qualification Steps for a Personal Loan

Getting prequalified is not a difficult process. Lenders do different things, but here’s are common practice. 

Step 1. Find one or more lenders. You can find a lender here.

Step 2. Give the lender some basic information, which may include contact info and other information

Step 3. Make sure it’s a soft inquiry. The lender can perform a soft credit inquiry (sometimes they will want to do a hard inquiry and this will effect your credit score). Then you can decide if you want the loan.

Why Should I Get Pre-Qualified?

Now you know the terminology, you may be asking yourself why should I get pre-qualified for a personal loan? Well, there are a few good reasons why you should considered getting pre-qualified. One of the obvious ones is that it can help you understand what options are available to you. While it is not a guarantee, it can give you some direction as to which loans you may qualify. This can all happen without any impact to your credit score. As we become more technologically advanced, the tools lenders use to pre-qualify someone are becoming more spot on.

This means that you can have a little more faith in the pre-qualification you receive. As with any potential loan, be sure to read the fine print. You should always know what you are getting yourself into. Be sure that you understand all of the information contained in the contract. You do not want to put yourself in a worse financial position by obtaining a loan that has loop holes. You also do not want to get a loan that you cannot afford to pay back.

What Is The Difference Between Pre-Approved and Pre-Qualified? 

Difference of being Pre-Approved vs. Pre-Qualified for a Personal Loan?

You have probably heard the terms pre-approved and pre-qualified and wonder what in the world is the difference. Well, there is not always a difference. Depending on the lender, some of them use the two terms interchangeably and they mean the same thing. You should make sure that you understand what the lender means by either of those terms if the lender is using them. Do not just think you know, make sure you know. You do not want to go into any loan process with assumptions about how it will work. Ask questions and get the answers you need before you sign a contract.

Typically, either term can mean that a lender has done a soft hit to your credit and done a cursory look at what is on there. One of the major differences between and soft hit and a hard pull is the details that the lender can see. When they have done a soft hit to your credit, it does not impact your credit score and they cannot see all the details that are listed on it. When they do a hard pull of your credit report, they must have your permission and it could impact your credit score slightly. More importantly, they lender can see all the details of the items that are listed on your credit report.

Another thing to keep in mind is just because you have pre-qualified for a loan does not mean you will be approved for that loan. The lender still reserves the right to deny your loan. Make sure you read and understand all of the fine print before you sign any contracts. While it is nice to be pre-qualified for a personal loan, you do not have to be for approval.

If I Am Pre-Qualified, Can I Get A Lower Interest Rate?

So, you may be asking what does getting pre-qualified for a personal loan do for me? The truth is getting pre-qualified for a personal loan in and of itself may not get your a lower interest rate. However, your good credit score that got you pre-qualified for a personal loan may help you get a lower interest rate. Hopefully, you know by now that the lower your interest rate, the less money you pay back for your loan.

You want to get the lowest interest rate that you possibly can. I have mentioned it a few times, but knowing what is on your credit report goes a long way to helping you. Once you know what is there, you can work to do a few things. You can get rid of anything that is incorrect. Working hard to pay off some of your debt and decrease your debt to income ratio is another solution. You can also be prepared to explain the questionable items on your credit report. Sometimes, if you can provide an adequate answer to a lender about something that is on your credit report, that is helpful for you to get a better rate.

What Does My Credit Score Have To Do With Being Pre-Qualified?

Your credit score has everything to do with it. Credit score is one of the major things a lender will use to determine if you should be approved. Your credit score is a history of your payments, what you owe, and how long you have had a credit history. Missed and late payments are the most common reasons for a low credit score. It only takes a few of those before your credit score plummets. The good news is there are steps you can take to improve your credit score.

You credit score can dictate getting or not getting many things in your life, a house, a car, even a job. You want to protect your credit as much as you can. If something does happen and your credit is negatively impacted, there are some things you can do to improve it. The first thing you should do is credit shop. You want to look at your credit report to look for any errors. You should always make sure the negative items that are reported are actually yours. If not, you should dispute them and have them removed.

Make sure you pay all your bills on time. Avoid late and missed payments for they always decrease your credit score. You should also work hard to pay down the debt that you have. Decreasing the amount of debt that you have on your credit report is one of your top priority. You also want to decrease your debt to income ratio to increase your chances of getting approved for a loan. Decreasing your debt can help you get pre-qualified for a personal loan.

Can I Get A Personal Loan With Bad Credit?

Yes, even with bad credit, you can still get a loan. However, it may be a little more difficult to get approved for a loan. First, you should know what your credit score is, so you know where you stand with lenders. When you do not have the best credit, you should shop around for the best loan for you. You could use a loan checker to search the top loan for which you qualify. Another thing you should know about bad credit is that usually means a higher interest rate.

Lenders see those with bad credit as a risk. Sometimes, a lender will not want to give you an unsecured loan and they want you to have collateral. When you have collateral, you are providing some type of property as a promise that you will pay back the loan. If you default on the loan, the property becomes the ownership of the lender. You can also get a co-signer, if your credit is bad. A co-signer promises that you will pay back the loan. If you do not, your co-signer is responsible for paying the loan.

Are There Different Types of Lender?

There are many different types of lenders. The most common lender that has been around forever is a typical bank. There are also credit unions. They are similar to banks, but they tend to be less rigid. Plus, they are more willing to loan money to someone that has bad credit. They are more like a neighborhood bank and want to help people get back on their feet.

Then there are online lenders. It is possible to get a personal loan online with bad credit.  There are some other types of more non-traditional lenders available, also. Also, consider peer to peer lending. There are organizations that are set up online where individuals or investors can loan money to you. Everything goes through the organization. The investor gives the money to the organization and you pay the money back through the organization. Typically, the interest rates are lower than you might find at a traditional bank. They do look at your credit but small marks are not as important to these types of lenders. You can also borrow money from your family and friends. Most of the time, they will let you borrow money with little to no interest.

You can use a third party to set up a loan agreement, so that it all remains legal. You can even borrow money from yourself. If you have a business that is making money, or vice versa and it is your business that needs the money. You can lend yourself the money and pay yourself back with regular payments. The best thing about these types of loans is that you do not need to be pre-qualified for a personal loan.

Are Online Lenders Safe?

Typically, online lenders are safe and you can feel confident when borrowing money from them. However, there are always people looking to scam others, so you need to aware and research any online lender you are considering. The benefits to an online lender is the application form is shorter and the approval time takes much less time. You can typically get an answer in 24 hours. Here on Loanry, you can find reputable lenders and consider applying for a loan with them.You can even put in your information in the form below, and get offers from lenders who would potentially lend you money within seconds.

If you are approved, the money is in your account within 24 hours of approval. Traditional lenders have a lot more paperwork for you to fill out. They always want you to go into the branch and talk to them in person. Online lenders require much less documentation, as well. Many times, online lenders send you letters stating you are pre-qualified for a personal loan. When considering an online lender, you must understand that your interest rate is probably going to be a little higher than if you went to a traditional bank.

What Should I Look For In A Lender?

You know you want to get a personal loan. You would even like to be pre-qualified for a personal loan. But, now you are trying to determine which is the right lender for you. There are some things in which you should look to determine if a lender is right for you. You want to make sure that whichever lender you choose, they give you the money you need.

If you are approved for a loan, but it is for $5,000 than what you need, it is not going to do you much good. You need to find a reliable company that has the backing to give you the money you seek. You need a lender that is flexible. Sometimes, traditional banks are a little too rigid. However, credit unions and online lenders are a little more flexible to whom they will lend money. Lending institutions are governed by federal laws.

Do not take a lender who is going to break the rules!

You do not want a lender that is going to break the rules. However, you do want one that can work with you. You want a lender that has excellent customer service and can be responsive to your needs. You want a lender that is approachable and you can ask any question you have. Someone that will sit and explain the entire loan and processing to you. You do not want to have the fine print hidden.

But take one that is upfront with the details of the loan

You want them to be upfront with the details of the loan. A lender with a solid reputation. You want to feel like you can trust the lender. The last thing you want is to borrow money from a lender that seems to have shady business practices. Doing a little bit of research about the lender goes a long way to help you get the best loan from the best company that will meet your needs.

What Can I Do To Improve My Chances Of Getting A Personal Loan?

https://www.loanry.com/blog/improve-your-chances-of-getting-a-personal-loan/

The answer is quite simple, although you may not like it. It should not come as a surprise to you, as I have said before. You need to reduce your current debt and increase your credit score. You need to work hard to repair any damage that you have done to your credit score. It is not always easy. Plus, it takes consistent and hard work. It is possible to improve your credit score. You need to take a look at your credit report and understand what is on there. Look at your late or missed payments. Is that information correct?

If it is not, you need to fix it. Making any corrections you can to the information on your credit report will help you drastically. If you cannot make corrections because all of the information is correct, you can try to contact the lender. Sometimes, if you make good on any late payments, or accounts that are in default, the lender will remove the late payments from your credit report. You must work to pay down your debt and reduce your debt to income ratio. While these things may seem tedious, they all will go a long way to help improve your credit score. This improvement does not happen overnight. It takes consistent effort on your part. But, it is possible to see improvement.

If you begin to correct all of these items, you begin to see your credit score increase. While your credit score increases, the possibility of a lower interest rate increases.

How Can I Use A Personal Loan?

There are many reasons why you might need a personal loan. In reality, you can use a personal loan for anything of your choice. The bank deposits the money directly in your bank account or gives you a check. Even though a personal loan can be used for just about anything, the lender always asks what you intend to do with the loan. There are some typical reasons why people apply for personal loans. A personal loan can be used to consolidate debt. This helps you combine all of your debts, including credit cards, into one payment per month. The keeps your payment each month the same because it is a fixed rate.

Another common reason for a personal loan is to pay for an emergency. It can be a medical emergency, or some other emergency that causes an unexpected expense requiring money fast. You can also use a personal loan to purchase a vehicle. This helps you purchase a car without having to pay for it all at one time. You may also use the money to make improvements to your house that ultimately increase the value of your house. You could use the money to pay for a wedding. Regardless of your reason for getting one, you can always get pre-qualified for a personal loan.

Conclusion

So, now you are pretty certain that you understand the details of being pre-qualified for a personal loan. Now, it is for you to decide if a personal loan is right for you. Just because you can get one, does not mean that you should. You need to make sure that getting a personal loan will help to improve your financial position. Do not put yourself in a worse place financially. You must ask yourself if you can afford to pay back the loan. Yes, it is nice to get a large sum of money directly deposited into your bank account. Remember, you have to pay back that money.

You have to pay it back with regular monthly payments. If you cannot afford those regular monthly payments, then you should not get a loan. Before taking on more debt, you should take a hard look at your current debt situation. You should understand your debt to income ratio and work hard to improve it. Do not forget that you are the only one that can decide if a personal loan is right for you. You need to understand your situation and if you can pay back the loan.

Should You Use A Personal Loan for An Emergency?

Posted on | by Myra H | Leave a Comment on Should You Use A Personal Loan for An Emergency?

Emergencies are no respecters of person. Even the richest or the most socially prominent people get blindsided with something out of the left field. Back in the day, people put aside a percentage of their paycheck to meet an emergency. Unfortunately, those days are long gone. Those suffering under an emergency may only have recourse to get a personal loan for an emergency.

What Constitutes An Emergency?

Your Car is Dead

You’re at work one day delivering food. Suddenly, your car stops dead in the road. The rods have been shot through your engine. Unfortunately, there’s no money for a new car. Until you can save it up for a new one or get an emergency repair loan to fix it, you’re going to be hoofing it. This sounds like an emergency to us. May we suggest a personal loan for an emergency?

Heart Attack

You’re awakened in the middle of the night in agony. Your chest feels like an electric current is making its way around the chest cavity. This isn’t a bit like you’ve heard a heart attack feels like, but you’re pretty sure that’s what’s happening. You quietly dress, pack essentials, and call for an ambulance.

Yep, it’s a heart attack. You’re in the hospital for a week. They’ve put a stent in your heart and are keeping an eye on you to make sure your body doesn’t reject it. This means you won’t have a paycheck that week, which means you can’t pay your rent or your bills. This is definitely an emergency, the may require an emergency personal installment loan. You can even get this kind of personal loan online.

You’ve been Evicted

A computer glitch at work scheduled you for two days, but you’re a full-time employee. Even your second job won’t be enough added to those two days to pay the rent and your bills. You’ve never been evicted before, but you’re afraid you might be this time. If the landlord won’t go for a payment plan, it would be a good idea to get a personal loan for an emergency.

No more Health Insurance

Your store was bought out by someone who inexplicably canceled everyone’s health insurance except for the managers. You need special medications to make sure your pregnancy doesn’t miscarry. Without insurance, you can’t afford the medicine. You miscarry the baby. Now you need money with which to buy your asthma inhalers that the insurance formerly covered. Emergency personal installment loans for the win, Alex.

Burning House

You’ve been on vacation for two weeks out of state. You come back home, pull in the drive, and notice something isn’t right. Didn’t there used to be a house here? What’s that pile of debris doing there? Why didn’t someone alert you that your house burned to the ground while you were gone?

Aside from the shock, which is staggering, you have to find a place to live, buy new clothes, get all your paperwork re-established, and start all over again. This definitely sounds like an emergency.

New Office

You’ve been assigned to open a new office in Baltimore. The office you work in now is located in Chicago. You’ll need to pack up, hire a moving company, figure out how to move the dog, and eat everything in the fridge and freezer. A house in Baltimore isn’t just going to materialize; you’ll need to go find one. You’ll need an emergency loan to pay for all of this.

Mother in Hospital

Your mother is in hospital for what her doctors assure you is the last time. You book a flight to her home and pack up. You’ll have to deal with the doctors, the funeral home, cemetery, and all the myriad things involved with death. All this while dealing with a broken heart. There’s no telling how long this will take, so you take a break from work.

The snag to that is that you’ll need to pay the rent and your bills during the time you’re taking care of your mother’s estate. This is the perfect time for a personal loan for an emergency

After years of working, playing, and just living life, your knees have declared bankruptcy. The god of knees is displeased with you. You can no longer work, taking a walk with your granddaughter is a thing of the past, you can’t work out, and life seems suddenly depressing. While you look online for something to do that will bring in a paycheck, you check out emergency personal loans up to 10k or more to cover the basics until you get a paycheck.

Everyone’s idea of an emergency is different. By definition, emergencies are unplanned, often devastating occurrences for which solutions are not readily available. Doesn’t it seem as if they always cost a lot of money? So let’s change our definition to one which simply requires a personal loan for an emergency to turn it into a blessing. Let’s talk about these emergency cash loans and how you might obtain one online.

What Are Emergency Cash Loans?

A mortgage is a loan for a house. You get an auto loan to buy a car. Student loans are another category altogether. A personal loan for an emergency isn’t anchored by anything. You sign the papers, receive your money, and do with it what you will.

Today’s financial industry has changed with the changing times. With peer to peer lending and lending clubs gaining so much ground, the financial industry has had to up its game. Even the big boys, meaning the banking industry and credit unions, offer emergency personal installment loans when you need cash immediately with terms that may match their competing brethren.

Is Your Credit Sterling?

If your credit is sterling, you can apply to one of these personal loans on their websites. Emergency cash loans could be in your checking account by at least the end of the business day or first thing the following day.

Even if your credit is bad or could use a little help, the personal loan for an emergency industry has developed offers just for you. All you need is a good track record on your job, and you’re in. Bad credit doesn’t mean you’re a bad person, just that your finances have undergone some unfortunate changes. Emergency loan stores will work with you to find the loan that’s right for your circumstances.

To get a personal loan online for an emergency, be prepared to have your credit history scrutinized. Lenders need to know that you have a history of repaying loans. If your job is in good standing, and you have a good track record of credit, then you shouldn’t encounter any problems.

Benefits Of Personal Loans

Now that you know what personal loan for an emergency is, you should know their advantages for you:

  • They’re personal. You can do with them what you will-open a home business, take a splashy vacation, buy a new wardrobe since your diet has been successful, buy a new car, consolidate your credit card debt, etc.
  • They’re quick. Sign the papers, and it’s often only hours before the money is in your account.
  • You won’t need a bank. Banks can often feel stuffy and forbidding. Emergency personal installment loans stores feel friendly, smiling, and definitely not stuffy.
  • The repayment amount is fixed, the interest rate is fixed, and the repayment time for the loan is up to you (from two years to five.)
  • You can borrow what you need and then some just for a cushion, from $500 up to $100,000.
  • You’ll have a lower interest rate than you would be using credit cards.

Types Of Personal Loan For An Emergency

There are many ways to get personal loan online or emergency cash loans:

  • Home equity. This type of personal loan for an emergency uses the equity in your house as collateral. You get a lump sum in your account to use as you will.
  • Home equity line of credit. This is a revolving amount you take out as you need it, and uses your home equity as collateral.
  • Military payday loan. Available only to the military and secured by your next paycheck.
  • Credit card advance. Monies advanced to you by your credit card company.
  • No credit or bad credit personal loan. If your credit is less than perfect, you can get one of these secured by your signature.
  • Emergency cash loans. Get personal loan online is often how these are done, secured by your signature.

If you are interested in getting a personal loan, Loanry can make the loan shopping process a bit easier, by connecting you with reputable lenders.

To Qualify Or Not To Qualify

Emergency personal installment loans are called that due to the installment payments each month to repay the loan. If your credit is in good standing, you have a job, and your debts aren’t overwhelming, chances are good you’ll qualify for a personal loan online. If your credit isn’t good, you’ll pay more in interest, and you won’t be able to borrow as much.

Repaying emergency cash loans only goes on your credit report if the lender reports the payments each month. Consolidating your credit card debt (if you used your credit cards to pay for an emergency) decreases the use of your credit. It’s better to pay installments on a personal loan for an emergency. You won’t be repaying credit card interest rates, and your credit score will improve.

If you’re afraid you won’t be able to repay the personal loan for an emergency on time each month, it’s better not to take it out. You don’t want to mess up your credit that way. It would be easier to borrow the money from family or friends.

Banks And Credit Unions

When people need a loan, they automatically think “bank.” Generally speaking, most people don’t know what a credit union is. Banks and credit unions are both public entities bound by federal regulations and offering the same products. Only their administration is different.

Banks

Banks are for-profit entities, owned by shareholders. They like to boast of their low fees and interest rates added to their excellent customer service. They generally have branches everywhere as well as being online. It isn’t difficult to find a bank branch somewhere offering what you need.

Credit Unions

Credit unions are not-for-profit entities, owned by their members, also known as account holders. They also offer low fees and interest rates, so shop around. Credit unions are beginning to open branches in every neighborhood as well as being online. Both have enough apps to get you through whatever you need to be done. As an example, you can take a picture of a check, and it’s deposited into your account. No need to fight traffic to make a deposit.

It’s not difficult to join a credit union. If you or someone you love or if you have friends in a certain industry, church, school, or government job, then you can ask to be sponsored for membership. If you have none of the above, ask at a credit union for the requirements of membership. You might just qualify.

When it comes to loans, credit unions seem to have the advantage. Since they don’t have to generate profits for their shareholders, they can charge lower fees and interest rates. Even in their checking and savings accounts, they don’t charge handling fees, so getting loans should be simple.

It really comes down to you and your needs. If you want the convenience of online banking, nearby branches, and you don’t mind higher interest rates, then go with a bank. If the interest rates bother you, then go with a credit union. Basically, fees and interest rates are the most important differences between banks and credit unions.

Loans: Secured Or Unsecured?

Difference Between Secured and Unsecured Personal Loans

Unsecured personal loans, or loans that have no collateral, are easier for most people to handle. They won’t lose their car or house if they can’t repay the loan. If they go bankrupt, unsecured emergency personal loans are easily set aside.

Putting up your house, your car, your art collection, or something else of value, then you stand to lose more if you default on the loan. On the other hand, it’s easier to qualify due to the collateral. If the loan is to pay bills right after you lost your job, the collateral will look more attractive to a lender. Based on the collateral’s value, you should get more money and at a better interest rate.

Depending on the nature of the emergency for which you need a loan, think carefully before putting up something you can’t really afford to lose if you have to default on the loan.

Credit Card Advance Or Personal Loan

One of the sources of emergency loans is credit card advances. They have an advantage over personal loans in that the balance can be paid off every month. The interest rates may be higher, but you can get around that by paying the balance each month. Credit cards are for those who don’t need a large infusion of cash, but could use some in a hurry.

Personal loans, on the other hand, enjoy a fixed interest rate for the life of the loan. You can borrow as much as you need if your credit is good. You get between two and five years to repay the loan. Personal loans are for those who need a large amount of money ASAP.

The Nitty-Gritty Of A Personal Loan For An Emergency

Okay, you know what an emergency is, what emergency personal loans are, you know their benefits, and you know the different types of loans. What’s going to happen when you apply online or stop by a personal loan office? You’ll fill out the paperwork first. Then you’ll need to clearly understand why you’re seeking a personal loan for an emergency. You’ll need to bring at least the last four, preferably six to eight, paycheck stubs with you. Bringing with you a bank statement for the last three months would be a good idea. The personal loan officer will pull your credit report.

Together, you will devise a statement of your expenses. The loan officer needs to know that you’ll have enough money left over after expenses to repay your loan. It’s called income to debt ratio. You’ll need a clear idea of how much money you need to borrow before you and the loan officer get down to the nitty-gritty.

Now that the financial work and the paperwork are done, you have to wait. You’ll hear within hours if the emergency cash loan will happen. You could have your money within 24 hours.

What To Look For In Seeking A Personal Loan Lender

We live in an age of fraud and scams. Unfortunately, when people are in dire need of money, they’ll snap at a legitimate-sounding offer. Only later do they find their identity has been stolen, or they’ve been fleeced of money they not only didn’t have, but desperately needed. Here are a few things to beware of:

Payment fees

Lenders do have fees , but usually tied to the loan. They might say it’s an application fee, but don’t fall for it. Legitimate lenders don’t charge advance fees of any type.

Personal loans can come with fees, including:

  1. Application fees.
  2. Late payment fees.
  3. Origination fees.
  4. Prepayment fees.
Wiring money

Why would you wire a lender money he’s supposed to be lending you? If anyone asks you to wire money to them, they’re very likely frauds. Don’t do it.

Copycats

If you receive an “invitation” to borrow from a company, call its headquarters to make sure it’s a real company. Some scams set up a website and even brick and mortar premises that sound like a famous lender. This lulls you into believing they’re real. Double check first.

Personal information

Never ever give anyone your social security number, birth date, banking information or anything else personal. Double check to make sure the “lender” is legitimate. Most lenders don’t ask for personal information until you’re doing the paperwork together.

Guarantees

If any “lender” approaches you with guaranteed loan offers, keep on walking. No lender guarantees anything until the credit check, job and income information have been evaluated.

Padding

Interest rates on a personal loan are based on credit rating, income, and ability to repay the loan. If a “lender” raises the interest rate by even one percentage point, you’ll be repaying more and for a longer period of time. The “lender” is padding his own account at your expense.

So what?


Life happens. Your house is destroyed by fire or storm, your car dies, you have to move across the country, and/or you can’t pay for your medications due to your insurance being canceled. We get it. Emergency loans were devised for when life happens to you.

Personal loans take many forms. They look like home equity loans, credit card cash advances, military loans, and loans for an emergency. There’s even a loan for those with bad or no credit. The financial industry is working hard to keep up with the times. Therefore, you can ask for a loan and receive reasonable terms from just about anybody in the industry.

Conclusion

Personal loans have many advantages. They’re quick, you can ask for as much money as you need, and you can take as long as you need to repay the loan. You can get them from a bank or a credit union. We understand how people might not want to chance a personal loan store or find a lender online. As we said, you can get a personal loan just about anywhere.

There’s just one thing you need to remember when you decide if a personal loan is right for you. There are millions of listings online that say personal loans. What you don’t know is that among all those millions of listings are companies that don’t lend. They talk to you to get a picture of your reasons for a loan and how much you need. Then they steer you toward the loan companies that may match your needs.

You won’t have to scroll through every one of those millions of sites looking for what you need. These people do the work for you. Read carefully in order to distinguish them from personal loan lenders. Let them help you find an emergency lender with your name on it today.

Personal Installment Loans for Good Credit: Better Terms!

Posted on | by Carlie Lawson | Leave a Comment on Personal Installment Loans for Good Credit: Better Terms!

Personal Installment Loans for Good Credit

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.

  1. Check interest rates. Wait until the rates drop.
  2. 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.
  3. 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.

  1. Check interest rates. Work on getting in better shape with your personal finances before getting a personal loan.
  2. Use creditry.com to check your credit score. Maintain your good credit rating. If it is not already good, improve your score before applying.
  3. 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.

  1. Do not take out a loan for more money than you can actually afford to repay.
  2. Keep at least six months’ worth of payments in a savings account. Has this saved before you take out the loan?
  3. 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?

What is a Good Credit Score? Your Credit 411.

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:

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.

Home Loans

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.

Car Loans

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

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.

Debt Consolidation

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.

Student Loans

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.

Wedding Financing

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.

Vacation Funding

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.

Medical Loans

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.

About Loanry

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.

7 Smart Ways to Use a Personal Loan

Posted on | by Cole Lehman | Leave a Comment on 7 Smart Ways to Use a Personal Loan

Every so often, it is normal to find yourself in a situation where you need extra cash. There are many ways through which consumers can raise the money they need to handle emergencies or meet their financial needs. One of the most common and convenient ways of doing this is to get a personal loan online. However, before approaching any short term loan lender for these products, it would be important to learn about the various smart ways to use a personal loan. This will not only help borrowers to make the most of the money but also help to avoid frustrations arising from financial difficulties.

Seven Ways to Use a Loan

Here are several smart ways to use a personal loan that borrowers should know about.

1. Consolidate debt to a lower interest payment

In case you are struggling to pay off your credit card loans and other debts, you may want to think about consolidating the loans into a single lower interest payment. Debt and Bill consolidation makes it easy for borrowers to know how much they owe and keep track of their monthly payments. However, your circumstances will determine whether this qualifies as one of the smart ways to use a personal loan. While taking out a personal installment loan for debt consolidation is becoming increasingly popular, borrowers should always be aware of the advantages and disadvantages of making this financial move.

When it comes to advantages, personal loans for consolidating debt may have a longer repayment period, making it more convenient for borrowers to pay back. This may also mean that the amount of money to be paid back may be significantly lower.

One of the disadvantages of debt consolidation is that you may end up paying more in interest depending on your credit score. However, this will be influenced by the type of loan, market conditions, and the lender you choose to work with. Similarly, the extended repayment period may mean higher interest in the long run, even though you may feel less of a debt burden.

As much as you may consolidate your debts and take out a loan to clear them, you should remember that you still have a responsibility to pay back the debt. To determine whether this is one of the smart ways to use a personal loan, it would be important to speak to a financial advisor.

2. Boost your credit score

A good credit score plays a critical role when borrowers are looking to borrow money from financial institutions. This is why it is important to maintain a good score and boost it in case it is negatively affected. Depending on how the borrowed money is used and repaid, this could be among the smart ways to use a personal loan.

Most lenders will consider the relationship between your credit limit and spending over a given period before giving out a loan. Borrowers with high credit utilization are considered to be a higher risk.

Personal Loans can help borrowers to consolidate debts, reducing their balance during a given month, and therefore improving their credit score.
Whether you are looking to get a personal loan online or from traditional lenders, you should carefully evaluate your ability to repay the loan. A personal loan presents borrowers with the opportunity to improve their credit score. However, this will only happen if all the loan installments are paid in good time. Since late payments or missed payments will hurt the credit score, this is an issue that borrowers must consider carefully.
There is no doubt that personal loans can help to improve your credit score in case of poor credit. However, achieving this goal requires a certain degree of financial discipline. Borrowers will also have to be sure that they will make timely payments for the loan to have a clean credit record and history.

3. Emergency medical expenses

Even with insurance, emergency medical expenses can result in unpaid bills that could lead to bankruptcies and negative credit reports. While having money saved in a savings account would be a great way to avoid the associated frustrations, this is not possible for most people. This is when taking out an emergency loan for medical bills makes for one of the smart ways to use a personal loan.

Paying for medical costs out of your pocket can be expensive, considering the high cost of healthcare. While you can think of negotiating the bill with the concerned medical practitioner, there is also the nurses, anesthesiologists, and the hospital itself. Medical loans are designed for people who run into financial trouble as a result of medical expenses. The loan allows borrowers to settle the medical bill in full and paybackin installments over time.

A medical emergency is a situation where disease or intense bodily damage threatens the patient’s life or could cause irreparable harm to their health. You may want to consider both the terms and interest of the loan before taking out an emergency medical loan. Shopping around will allow you to find the product that fits your budget and is more favorable for your circumstance.

One of the advantages of this type of personal loans is that borrowers can still get them even with bad credit. Banks and credit unions can also extend the loan under emergency circumstances even if you already have a loan with them. However, borrowers should ensure that the emergency loan for medical bills will not lead to a debt burden that overwhelms them.

4. Home improvement or maintaining your house

After staying in your home for a considerable period, you may find it appropriate to upgrade the property. Whether you want to make it more functional or boost its value before putting it up for sale, you will have to figure out where the money for the project will come from. What most people do not know is that there are personal loans for home improvement or maintaining your house.

There are several instances where taking loans for this purpose joins the list of smart ways to use a personal loan. Since personal loans have to do with a borrower’s credit and ability to pay, they will be a great option to consider if the borrower does not have enough equity in their home. This also applies if the borrower wants a shorter or fixed repayment term, when they do not want to use their home as collateral or when the borrower wants to start their project right away.

One of the reasons why this makes it to smart ways to use a personal loan is because it contributes to increasing the value of the property. However, it remains important to look at the interest rates charged on the loan, the repayment period, and other fees before taking out the loan. Before committing to these loans, borrowers must check out the different options available to establish the product that will be a better fit for them.

5. Repair a car that you use for work

While most people know that they can take out personal installment loans to buy a car, very few are aware that they can borrow to repair a car that they use for work. Unexpected maintenance and repairs for your car will put you in a situation where you find yourself in need of quick cash. A personal loan to take care of the expenses associated with repairing your car will allow you to pay back the money over several months. This reduces the financial pressure you feel so that you can carry on with other things.

Getting your car working will save you from additional expenses that would arise if the problem is not fixed in good time. This is why borrowers may want to consider taking out a personal loan to help them meet such costs. Some of the advantages of taking out a personal loan are that the process is easy, quick, and private. There are a number of independent loan lenders that can help you access the funds you need for such situations. We also make it easy and convenient for consumers to find the right lender for their needs.

When thinking of smart ways to use a personal loan, borrowers should ensure that the borrowed funds will be used in such a way that it will make economic sense. Repairing a car that you use for work will make it easy for you to generate income. Unlike borrowing for luxury spending, this will allow you to move to work and transport stuff more conveniently.

6. When you can use a personal loan to make money

While borrowing has risks associated with it, borrowing for the right reasons can help you reach your financial goals. Rather than letting an opportunity pass you buy, you should consider approaching lenders to advance the cash you need to take advantage of such situations. This includes financing a business expansion that will increase profits, paying for a home remodeling exercise that will increase the value of the property and paying for a course that will translate into better career prospects.

In most cases, putting money into a project where you expect to make money comes with certain risks. There is never a guarantee that investing in a given venture will bring about the expected results. In fact, there is the possibility of losing money. As such, this move must be a calculated risk. Even if the venture fails, borrowers will still be required to repay the loan. This means that it is extremely important for borrowers to do their research to establish whether the opportunity is likely to work out.

There is no doubt that borrowing when you can use the cash to make more money is one of the smart ways to use a personal loan. However, the most important thing is to ensure that the money is put to proper use. Only by doing so will it help to improve the quality of life or generate more income. Using the money for the intended purpose will also go a long way in ensuring that the loan is repaid promptly without straining.

7. Emergency Situations With Your Home

Every homeowner wants to make sure that their home is comfortable and functional at all times. However, once you begin your home ownership journey, there are times when you will have to carry out repairs to both the structure and the different systems in your home. In case such situations arise at unexpected times, you will be forced to find reliable sources of money to carry out the repairs. This is when taking a personal loan may become one of the smart ways to use a personal loan.

The reasons why people take out loans for emergencies with the home are as different as the borrowers themselves. These loans can be used to remove health and safety hazards, carry out repairs, or modernize the space. Depending on your needs, you should consider looking for a lender who will offer products that are suited for your situation.

Today, a good number of people get a personal loan online to execute such projects. This is because most online lenders have flexible requirements. At the same time, online loans have a shorter and faster application process when compared to taking out loans with traditional lenders. As a borrower, you will want to work with a lender who makes it possible for you to meet your needs at the right time and pay back the loan conveniently over time. With the numerous lenders offering loans today, we help borrowers to find the right lender. We provide a hassle-free borrowing experience by helping consumers avoid common scams.

Key Points to Remember

Much has been said about the benefits of personal loans. However, for borrowers to realize these benefits and ensure that personal loans help to improve their lives, they must ensure that the money is used wisely. This means finding smart ways to use a personal loan so that repaying it does not lead to financial difficulties and a larger debt burden.

  • Make a plan – the first step when it comes to using a personal loan wisely is to make a plan. This means identifying the need for the money, figuring out how much is required, choosing a lender, and discussing a suitable repayment schedule. Lastly, this will involve coming up with a clear way of using the funds.
  • Take only what you need – it is possible that you will qualify for a higher loan amount than you actually need. However, taking out more than you need can land you in financial trouble. Renegotiate for a lower amount if the lender offers more than the amount you want.
  • Stick to the plan – a plan will only work if you stick to it throughout the entire process. Once you have received the money, it is important to stay focused on your goals, using the money only for the intended purpose.
  • Remember it isn’t money – it is important to remember that you do not have money. On the contrary, you owe money. Just because there is a certain amount of cash in your bank account does not mean it is yours.

Now that you are familiar with all the ways you can use a loan, you have to be smart about where you are looking for one. Borrowers should identify reliable lenders to work with. We make it easy for consumers to find the right lenders for their needs and avoid falling victim to scams.

What Credit Score You Need for a Personal Loan?

Most personal loan lenders will take the borrower’s credit score into consideration before issuing a loan. This is why borrowers should think of boosting their score way before they apply for or need personal loans. This helps to avoid the frustrations associated with getting your loan application rejected. The borrower’s credit score will also have a direct impact on how much they pay in terms of interest and other loan fees.

A credit score ranging from 700 to 750 is usually considered good. A good credit score will not only ensure that borrowers get numerous attractive offers but also make it easier for them to access the funding they need for their needs. There is also a fair credit score which ranges from 650 to 700. While it may not be easy to get a personal loan with fair credit, some lenders will consider your application when they take into account other factors. Lastly, a bad credit score is between 560 and 650. Getting a personal loan with bad credit can be hard. The good news is that borrowers can take certain steps to get the funding they need.

However, such borrowers may end up paying high-interest rates, have shorter repayment periods, or have lower borrowing limits.

Considering the important role that the credit score plays in the loans industry, it is important to maintain a good credit score. Similarly, those with a poor credit score should strive to improve their score. This means adopting healthy financial habits, paying back debts on time, and sticking to smart ways to use a personal loan.

When You Should NOT Use a Personal Loan

Types of Bad Debt: Travel Loans, Wedding Loans and Rent Loans

Before and while taking out a personal installment loan, borrowers should ensure that the loan will not lead them to financial troubles. Although personal loans can be beneficial in many ways, there are several instances when you should not use the loans. Here are examples of when not to use personal loans.

When you are struggling to keep up with debts

If you are struggling with student loans, credit cards, and other bills, it may not be a good idea to take out a personal loan. Once you cannot keep up with current debts, adding to the amount you pay back monthly will only complicate things further. It would be important to improve your financial situation before adding on a new loan.

You want to refinance a small amount of debt

While personal loans can help borrowers to consolidate debts for easy and convenient repayment, the amount you want to refinance should be considered carefully. Seeking to refinance a small amount will mean additional expenses that one would have avoided if they paid off the loan over the remaining period.

If you can easily save the money

Taking out a loan will mean paying it back with interest and incurring costs in terms of fees. In case you do not need the money urgently and can save up for your project, it would be wise to do so.

Covering expected major expenses

Rather than taking out a personal loan to cover upcoming expenses, you may want to consider other ways of raising the money. This may include looking for a part-time job or cutting down on expenses to boost savings.

Unstable employment and income

In case your employment or income is unstable, you may have problems paying back your loan. Avoiding such a loan altogether will help you avoid the frustrations that come with late or missed payments.

Final Thoughts

Knowledge of smart ways to use a personal loan and when to avoid the products can go a long way in helping you meet your needs. At the same time, it can help you get out of financial difficulties and move you closer to your goals. However, the journey requires good financial habits and discipline.

Besides figuring out smart ways to use a personal loan, borrowers should carefully consider the kind of lenders they work with. Since different lenders have varying loan terms, doing some research will help in identifying the most appropriate one for your needs. We simplify the process of finding a lender by helping consumers to compare different lenders and identify reliable loan companies. Work with us to make it easier to get a personal loan online and learn more smart ways to use a personal loan.

Difference of being Pre-Approved vs. Pre-Qualified for a Personal Loan?

Posted on | by Ethan Taub | Leave a Comment on Difference of being Pre-Approved vs. Pre-Qualified for a Personal Loan?

After understanding a few options, you might decide to pursuit a personal loan with online assistance available to help you. Indeed, there are plenty of resources available to outline the steps and ways to better prepare yourself. This can be a simple choice and knowing more about the process is a smart way to be more comfortable.

According to other consumers, understanding the basic terms and opportunities are probably the bests way to prepare. Many consumers would reach out and suggest simple strategies to be successful. Lending is healthy as you know how to go through it. What types of preparations do you need and where do I start when looking at online resources? What is the difference between being pre-approved vs. pre-qualified for a personal loan?

Pre-Approved vs. Pre-Qualified

Some lenders use the terms interchangeably when communicating about personal loans and the process involved.  Other lenders have a different way of viewing the terms although the processes may be similar.  Being pre-approved vs. pre-qualified are discussions you might have with lenders through the process.  Triggering a “hard pull” on your credit is a part of a certain process with the loan application.

These applications may require more information about your employment and financial background.  As a consumer, you should know that a “hard pull” requires your consent because of your protected credit report.   You might pre-qualify for a personal loan rather than committing to a deeper credit search before you are ready.    Understanding the terms and the fine print are helpful with the loan process and credit report protection.

With loan comparisons, many resources suggest a focus on the basics.  According to USA Today, the annual percentage rate (APR) is what matters the most when comparing personal loans.  In the United States, the lenders have a requirement to provide an APR when making an offer.  This percentage should reflect the costs on an annual basis, which includes interest and applicable fees.

The market for personal loans is more competitive than it has ever been in history.  With online shopping thanks to the Internet, people can get an estimate from several different lenders in just minutes.  The opportunities right now for consumers are considered amazing.  Online shopping for money can be one of the most incredible considerations for people that come across the availability and news.

Personal Loan Basics

Personal installment loans are available for people needing some money. We outline the online resources here with some simple suggestions for getting through the process. Indeed, simplifying everything can help with your comfortableness while pursuing personal loan options. Above all, it is helpful to know that lenders are there to provide loans. However, those trying to get a loan are able to understand that there are more lenders available now offering loans.

Knowing how they use the terms pre-approved vs. pre-qualified is helpful.  Personal loans can assist with financial need, home improvements, preparing for a promotion, or relocation assistance.   I was amazed to find out that there are even loans for moving costs.  Maybe a personal loan can help you through the next few months of bill payments.  The comfortableness is important to many people and relief could be a simple process of researching loan options.

Pre-Qualifying for a Loan

How can a personal loan help you with your finances?  Maybe a loan can help you with job training or plans for better employment.  You could also get money for that large purchase or vacation.   A loan could help you with your career goals and plans to improve your financial situation.  Maybe that personal loan can also help you build your credit.

What do you need to understand about the loan process?  How does a pre-approval benefit you?  The lenders online have a loan process available and the information is there to help you.  Where can I find out more about pre-qualifying for a personal loan?  How is pre-approved vs. pre-qualified different between lenders?

There are many resources available with consumer education for the loan process.  The benefits of knowing more can be a smart reason to check out the resources for the lending process.  Getting pre-qualified for a loan means a lender has checked out your information.  Sometimes called a “soft pull” on your credit, a creditor believes you are likely to be eligible for a loan.

According to some resources, this will not affect your credit but ask about pre-approved vs. pre-qualified processes if it applies.  If you are pre-qualified by a lender to get a personal loan online, that is not a loan offer. However, the lender feels that you will likely qualify for a loan through them.

Why is it Better to Pre-qualify for a Personal Loan?

As you shop online, it is important to know the lender’s plans for being pre-approved vs. pre-qualified for a personal loan.  Protecting your best credit report is smart throughout this process.  Shopping for personal loans can be simplified with a process to pre-qualify online or on the phone.  This will not affect your credit score and you can then determine the best interest rates from each lender.

Continue to check the lender’s plans for being pre-approved vs. pre-qualified.  Usually, the process of pre-qualifying can help you with an estimate of the monthly payment.  The protection of your credit report is smart with each step of the process.  The personal loan can be helpful for many reasons but when you educate yourself about the process it can be helpful in many ways.

Look Into All Options

Someone looking at loan options is in a better way as they understand the language used by lenders.  Two points to consider when looking at personal loan options.  What is a “soft pull” and what is a “hard pull” for each lender through the process?  Getting through this without hurting your credit rating is an objective for those who are informed.

Certain lenders may use an in-depth look at your financial history with an actual loan application.  This is sometimes referred to as a “hard pull”.   This credit review of your report may include a look at items such as balances owed and debt.  Consumers should know that the algorithms used by lenders today are constantly improving.  This reduces the likelihood that the interest rate is much higher after the loan application versus a “soft pull” pre-qualification.   Consumers should be thankful since the improvements can save them money, time, and effort.  The loan application process can be more comfortable with a more accurate number for the lender’s best interest rate.

Pre-Qualifying Loan Process

To pre-qualify you might need information about your employment and current financial situation.  This may include the name of your employer, salary, and the amount of time that you’ve been with the company.  Some lenders may ask about previous employers.  Additional requests may include information about debts, such as a mortgage, auto and any other loans.

Lenders want to know about your payments.   Your self-reporting will help them assess the likeliness for you to qualify.  The simplified pre-approval vs. pre-qualified process may include a form for you to complete.  The submittal may include a soft credit check from the lender with a lender pre-qualification decisioning.  This is another benefit of pre-qualifying with a fast process for the lender to let you know their decision.

As the potential borrower, you can either accept or decline the pre-qualified offer.  This could include their interest rate and the monthly payment amount.   With these simple steps, you can use the information to decide which lender might be best for you.  It is helpful to know that borrowers can get a quote for a loan with a soft credit check.  In an amazing way, you can get quotes from 20 different lenders without getting a hard inquiry on your credit report.  Only with acceptance of the loan will the lender do a hard pull of your credit for purposes of verification.

The Best Ways to Qualify for a Personal Loan

A personal loan is simplified as you understand that you can use it for anything you want.  Getting pre-approved vs. pre-qualified is important to know with the processing of a personal loan.  This is different than a mortgage loan because there are no restrictions on spending the money.  The best ways to get a personal loan are covered here.

Credit scores can be improved and the good news is that the process can be simplified. The three reporting agencies for credit keep track of your score: Experian, Transunion, and Equifax.
One of these may have a higher score than the others so you could check all three. A positive way of viewing your score is to consider your credit history as monthly segments. You can prove that you pay rent or mortgage amounts and the other bills on time. A repair can be assisted with a company but be careful if they ask for money. When you are working towards better credit remember to celebrate even incremental progress. In addition know that lenders want to provide loans and that this is their business.

Credit Scores for a Personal Loan

Before beginning the loan process, you might consider fixing up your credit score and any delinquencies. Indeed, improving the score you have with your credit report is important because it should lower the amount you pay with personal loan fees and interest. For instance, the personal loan shopping tools are available to help you understand credit scores and some ratings. Improving your credit score can help you with the loan process and getting qualified for a personal loan. However, staying focused and continuing with your on-time payments can also assist you through this process. Debt to income ratios can be improved. Not to forget that with some effort, you can even prepare notes that support your successes.

Organize everything in ways that work for you.  I have found it helpful to consider credit utilization and a streamlined approach to getting a loan approved.

  • Look at your groupings of payments and consider any improvements that might help
  • Find any payments that you can improve with multiple smaller amounts
  • Request a credit limit increase and try to lower any interest rate amounts
  • Consider debt consolidation loans to pay off card balances
  • Continue with on time payments and credit score improvements
  • Prepare your notes for a simple pre-approved vs. pre-qualification loan process

Improving Your Chances of Getting a Personal Loan Approved

Understanding the process for getting pre-approved vs. pre-qualified for a personal loan will assist you through the planning of shopping lenders without affecting your credit score.  Preparing for the loan process could begin with the simple process of going online and understanding the opportunities.

Short term loan lenders are offering the loan process online for easy access.  Understanding how to get pre-approved is helpful when applying for a loan.  Consumer to consumer research can be really helpful.  Just know that rereading certain resource materials might be the best preparation for you.

Increase Your Odds of Getting Your Personal Loan Approved

Try to be comfortable and positive with your finance successes.  Being knowledgeable is the best step and the loan process can all be simplified from there.  The search process online is simple also.  Just use the words get personal loan online, pre-approved vs. pre-qualified for personal loans, or helpful loans online.

Planning for success is smart and making sure you understand the payment schedules is also a good plan.  Mike Sullivan is the personal finance consultant with a Phoenix-based nonprofit credit counseling and debt management agency.  “Late payments trigger fees, and after 30 days, negative reports go to credit reporting agencies.  An installment loan can help your credit buy only if paid on time.”

Strengthen Your Chances of Getting Approved

Understanding the benefits of paying off higher interest credit cards can make the loan process seem easier.  Paying off that debt could help your credit score and credit history.  This type of planning makes sense to lenders that also are there to provide short term installment loans.  The payoff of your credit card debt might make sense to support a better position for your finances.

If you are unsure, you can always correspond with a lender online.  They are usually available to answer questions and many are wanting to build good customer relationships.  This is an opportunity to evaluate the loan options and benefits, along with the plans for the pre-approved vs. pre-qualified process.  A better plan with your credit standing could actually help you save money.

There are several factors reviewed by a lender when deciding to approve a personal loan.  A reasonable debt to income ratio is helpful.  A history of on time bill payments is also helpful.   Some smart lenders also know to use career experience, financial history, education level and monthly income when evaluating a loan.  Considerations of your future ability for creditworthiness is also helpful for many people.  As always, take time to evaluate the rate, terms, and payment amounts.  You should be comfortable with the payment schedule and monthly amounts.  Shop personal loans and increase your chances of finding a loan that works for your situation.

Personal Loan Reviews and Credit Ratings

Your credit history can be a positive for lenders reviewing your report.  An established credit history can actually help with one review of your report.  Making payments on time would be a positive way of your ability to manage loans and finances.  Consider your success for making on time payments and maybe take some notes about your payments and the frequency of your bill paying.

Some lenders may also want to know your history with credit cards or credit used.  The total amount of outstanding debt may be reviewed.   You might be prepared to answer questions about your ability to pay the monthly amounts after getting a personal loan.

Recording monthly bill payments can help you confidently prepare to work online.   With some online providers of loans, you may want to take notes and understand the basics for each loan process.  This can help you decide on your path through the process.  Explanations of using credit cards frequently might also be noted.  Other cost savings and money paybacks as promotions may be a reason some people use credit cards more often.  Some use credit cards more often for an itemized payment report.

Summaries of your reasons might be inclusions for your notes.  Looking organized with itemized lists may look favorable for a lender that might be looking at your credit history.  Remember to discuss the pre-approved vs. pre-qualified loan process.  Consumers are supposed to be protected since “soft pull” recent inquiries are not supposed to do any hurt or harm based on consumer protection.

Understanding the Loan Process

The loan process is simply some exchange of information.  Being prepared can help you through the process and also improve your opportunities of qualifying for personal installment loans.  The review of a loan process is part of the lender’s work with you.   Some consumers have obtained a personal loan knowing the payoff was just a few paychecks away.

Your plans to use the money might be considered smarter if the loan can help you save or make additional money someway.  Loans for consumers are often in three main categories: debt consolidation, home improvement financing, and retail.  The success from this process can also help some consumers better prepare for a homeownership loan.

Be pleased with your finance knowledge and your smart ways of shopping for loans and credit.  Looking organized is simple as you jot notes and look at the summary of your finances.  Try to be positive with confidence supporting your planning.   Noting your success is also a smart way to prepare as you work online researching the loan process.  Any debt payoffs are big wins and some people are doing some work to make sure their credit report reflects the improvements.

Checking your credit score is important through the pre-approved vs. pre-qualified lender process.  Your regular on time payments may look really good to lenders waiting to provide loans.  A suggestion is to keep track of your regular payments and any commitments to save money.  These efforts can be communicated if appropriate.

Rates, Fees and Terms

Being informed about the loan process is easier when you understand a few basics about personal loan lending.  This includes rates, fees, and terms.  Shopping online gives you an opportunity to check for lower interest rates.  Reading the terms and fine print are smart with personal loans and considering short term loan lenders.  Also, interest rate discussions might be important so understand it all in a simplified way.  This is the rate the lender will charge you for the use of borrowing the money.

There is a fixed rate and a variable rate as two types of interest rates to understand.  Fixed rates never change and will be the same for the loan term.  Variable rates may increase when the market changes but may start off lower.  Shopping around for personal loans is smart and checking out different lenders can help determine the best rate for you.  Keep in mind the benefits of knowing each lender’s process for getting pre-approved vs. pre-qualified.  Understanding these loan basics will help you better prepare and ask the right questions when reviewing your loan options.

Success with a Pre-Approved Loan

After confirming that the payback plan works for you, it might seem easier to celebrate your success with an approved loan.  Your success in looking organized might have really helped so be pleased with your work.  Taking notes about the plans for payments or the payback can help you with the next steps.  How do you make sure it all works for your finances and situation?

Take notes and determine you plans for putting some money to the side for payments or the payback.  You can revise it as necessary and use it to ensure your comfortability with the planning.  Regular payments are smart to plan as you look at other monthly expenses and itemized amounts.

It is nice to know plans to pursue and protect your best credit rating.  Focus first on “soft pulls” when going through the loan process until you are ready.  Reviewing the process of pre-approved vs. pre-qualified for a personal loan with each lender is important.  You can shop several lenders online and get the interest rate with payment amounts.

Going through the loan process and improving your credit may be the smartest planning.  Your credit score and efforts can save you money and help you qualify for future loans.  Also, know that personal loans are not usually backed with collateral and you can use the money for whatever reason.  This gives you flexibility while knowing you did good work preparing for your payments due and aligning your credit ratings.

Choosing Personal Loans from Online Lenders vs. Banks

Posted on | by Cole Lehman | Leave a Comment on Choosing Personal Loans from Online Lenders vs. Banks

Regardless of the financial need, taking out a personal loan can affect your life in a big way. This is why it is important for borrowers to carefully consider the different options available to them. Consider them before making an application for the loans. With an increasing number of companies offering personal loans today, it is easy for consumers to fall prey to scams. Similarly, failure to compare lenders as you shop personal loans could see you taking out a loan that you cannot afford.

Most financial experts advise borrowers to use a third party to compare different lenders. This one not being a loan business will help you find a reliable company to work with. Generally, those looking to borrow money for a variety of needs can either work with online lenders or banks. Here is what borrowers need to know about online lenders vs. banks when it comes to personal loans.

How Does a Personal Loan Work?

Whether you are looking to get a personal loan online or work with traditional lenders. Knowing how these loans work will make it easier to identify a suitable loan company. The first step would be to understand what personal loans are. Then consider the uses to which the borrowed funds can be put as well as the basic features of the product. Such knowledge will also put you in a better position to determine the better option for you when comparing online lenders vs. banks.

Even as you shop around for personal loans, it is important to remember to look over the paperwork before signing any documents. Once you enter a financial commitment with a lender, you will assume certain responsibilities over the term of the loan.

This makes it important to not only understand the terms of the loan, but also look at the interest rates charged. Not to mention prepayment penalties as well as any other charges. The term of the loan will also affect how much you will be paying back in monthly installments. What is a factor that will help you decide whether you can afford the loan, or not.

Although personal loans have certain similarities, there are a number of features that will vary. Especially depending on the lender you choose. In addition to other factors, a look at the loan terms will help you identify a reliable lender. If you do not understand how these loans work, it will help if you talked to an expert before taking out a loan.

Key Differences between Online Lenders and Banks

Any time you wish to loan shop online or go into a bank, you should think about the products you get from each lender. Here are key differences between online lenders and banks to help you make an informed decision.

  • Interest rates – compared to online lenders, banks tend to offer lower interest rates on personal loans. One reason for this is that banks have access to a large pool of capital. They also make money from the wide range of products they offer customers.
  • The time involved – It can take a few hours to apply for a loan online and receive feedback. Indeed taking out a loan with a traditional bank can be a lengthy process. It may involve submitting documents, making phone calls, and visiting a branch before receiving funds.
  • Qualifying for the loan – generally, the underwriting process and requirements by traditional banks are stricter than those of online lenders. Banks may require you to operate an account with them for a certain period before being eligible.
  • Costs and fees – most online lenders will be inexpensive to apply for a loan with but will have high-interest rates. While banks do not guarantee approval, they tend to have lower upfront costs and fees.

These differences provide answers to questions that may arise when comparing online lenders vs. banks. Armed with this knowledge, borrowers will evaluate their circumstances, match them with what each of these categories of lenders offers, and know where to turn to for a personal loan.

Personal Loan Eligibility Requirements

Just as with other loan terms, every loan company will have its own set of eligibility requirements. This explains why a good number of peoplego to a loan shop when they need extra cash to cover emergency expenses. These sources of loans allow borrowers to access money within a short period and are usually more flexible than most online and traditional lenders.

When pitting online lenders vs. banks, borrowers will need to look at what works for them. Most online lenders will look at the borrower’s income-to-debt ratio to determine whether they qualify for the loan as well as the amount they can borrow. Some lenders will also check whether the borrower pays their monthly bill on time, request for proof of income, consider age, employment stability, and the credit score. Depending on the lender you decide to work with, you may also need to submit a number of documents alongside your application.

Generally, traditional lenders are known to have stricter eligibility requirements when compared to online lenders. In fact, as you shop personal loans online, it is possible to come across lenders who advance these loans to people who have poor credit scores. This makes it crucial to know what to look for in a lender. Loanry can make loan shopping process a bit easier, by connecting you with reputable lenders our partner Fiona has selected.

Qualities to Look for in a Lender

The benefits of working with a reliable lender when taking out a personal loan cannot be denied. As such, this is one of the important considerations to keep in mind as you shop personal loans. Identifying a good lender will require that you know some of the characteristics to look for.

  • Sufficient lending limit – nobody wants to work with a lender who cannot advance the loan amount they require to sort out their financial needs. Therefore, a reliable loan company is one that is stable and willing and able to lend higher amounts of money.
  • Flexible – banks not only have guidelines that govern how they issue loans but are also subjected to regular audits to ensure they comply with set guidelines. However, most borrowers look for lenders who take into account their capability without breaking the rules. This ensures that the borrower can repay the loan comfortably without being overwhelmed.
  • Responsive – the terms used by financial lenders can be confusing and intimidating. A good lender should be responsive to the needs and concerns of the borrower, taking time to explain details of the loan and helping borrowers make the right choice. Rather than taking advantage of borrowers, the lender should help whenever borrowers do not understand certain aspects of the loan.
  • Solid reputation – with the increase in the number of lenders today, borrowers are keen on working with trustworthy loan companies. You can establish the credibility of a lender by reading reviews posted on social media platforms to learn about the experiences of other customers.

Lender Experience

A good lender should have adequate industry experience so that they can address and handle the needs of their customers. In addition to offering a personal loan, a good lender should be willing to help you manage the funds better. By deepening your knowledge and helping you grow money, the lender will have pushed you closer to your financial goals.

With these qualities in mind, it will be easier for borrowers to make an informed decision whenever the online lenders vs. banks question come up. However, the decision over which lender to turn to will also depend on your circumstances at the time when you need the money.

Reasons to Give when Applying for a Personal Loan

As much as the debate pitting online lenders vs. banks when it comes to personal loans is important, it is equally necessary to improve your chances of securing funding. Below are some of the common reasons borrowers give when applying for these loans.

  • Consolidate debt – consolidating credit cards and other debts into a single monthly loan repayment is usually a wise financial move as long as your interest reduction saves money. As such, lenders are likely to offer loans to borrowers who state this as their reason for taking out a personal loan.
  • Wedding funds – major life events such as weddings come with their fair share of expenses. For this reason, an increasing number of people have wedding expenses as their reason for applying for a loan. Lenders are also reviewing this regularly and have come to accept it as a valid reason.

Statistical Reasons to Get A Personal Loan

  • Buy a car – some people wish to own cars but do not have the money to pay for it upfront. Since most lenders understand this, they will accept this as a reason for taking out a loan. Auto loans allow borrowers to make big purchases and pay back the loan in smaller installments.
  • Handle an emergency – whether it is a medical emergency or any other kind of emergency, unexpected expenses may require emergency cash loans. With a reliable lender, borrowers will be in a position to handle the emergencies without much strain.
  • Home improvements – homeowners can take out a personal loan to carry out home improvements. Such upgrades not only make the home more functional but can also increase the value of the property.

This list is by no means exhaustive. There are many more reasons why people take out personal loans. It is important to be transparent and demonstrate an ability to repay to improve your chances of being approved.

The impact of your credit score

There are several factors that borrowers have to keep in mind when doing a online lenders vs. banks comparison. This is because most lenders take these factors into consideration when making the decision over whether to give a loan and the amount to be given. One of such factors is the credit score of the borrower. According to lenders, your credit score is an indication of how much of a risk you are to the lender. The score also shows your past borrowing and repayment habits.

With the important role that credit scores play during this process, it is necessary for borrowers to familiarize themselves with how a credit score affects the application and approval of personal loans. Your credit score will determine whether you qualify for a personal loan, how much you can borrow, the sources of loans available to you, and the interest for your loan. Generally, people with a good credit score will have more negotiation leverage and will find it easier to get a loan.

It is important to note that a personal loan can present a good chance to improve a borrower’s credit score. At the same time, depending on how the funds are used, the loans can also be the beginning of financial difficulties and frustrations for the borrower. As much as you may have a good credit score and qualify for a personal loan, you should ask yourself whether it is necessary to take out the loan. This is because the loan will reflect on your credit report regardless of whether you pay it back in time.

What to do if you have bad credit

There are times when borrowers will want to apply for a personal loan but have bad credit. This is one of the situations where an online lenders vs. banks is critical. The good news is that there are a number of lenders who give out personal loans for bad credit. Here are some of the options you can consider in case you do not have time to work on your credit score.

Take out a secured personal loan

Most personal loans are unsecured, meaning that borrowers are not required to provide collateral to back up the loan. However, borrowers who have a low credit score can consider going for secured loans. In this way, the risk associated with defaulting on payments will be significantly reduced. By doing so there is a chance you will get a lender who will be willing to offer the loan.

Get a cosigner

Getting a cosigner is another way to improve your chances of getting your loan approved if you have bad credit. Lenders will require that the cosigner has a source of income and a better credit score than the main borrower. Such a cosigner will have certain responsibilities regarding the repayment of the loan.

Borrow from family and friends

Depending on the reason why you need extra cash, you can consider borrowing from family and friends to meet your needs. One of the advantages of borrowing from such sources is that they will not need to look at your credit score and history. However, it is important that borrowers treat this as a serious transaction to avoid causing strains on the relationships.

Boost your income

In case you are saving for a particular purpose, you should think about cutting down on expenses while boosting your income. These actions will ensure that you save more money, allowing you to reach your goals within a shorter time. Getting a part-time job or a side hustle would be a great way to start.
The best way to identify lenders who give out loans with bad credit is to shop personal loans. We make it easy and convenient for borrowers to find reliable lenders. As a third party that is not in the loan business, we strive to help consumers to avoid falling victim to common scams.

How to improve the chances of getting approval for a personal loan

Aside from the online lenders vs. banks question, it can be frustrating for borrowers if their personal loan application is rejected. This is why borrowers are advised to take the necessary steps to ensure that they increase their chances of being approved.

  • Improve your credit score – it is clear that most lenders rely on a borrower’s credit score to approve or reject a loan application. Borrowers can work on improving their score by paying their current loans on time. It would also be important to reduce current debts to achieve a healthy income-to-debt ratio.
  • Have the required documents ready – some of the documents that lenders may require borrowers to submit include a government-issued ID, bank statements, and Social Security Number. Borrowers who keep these documents ready will have an easier time when applying for a loan.
Here is  a Good Video Explaining How to Up Your Odds of Approval

  • Keep your income steady – lenders consider borrowers who have a stable employment history of being less of a risk to them. Financial experts discourage against changing jobs frequently as this could hurt your chances of getting a personal loan.
  • Apply for loan amounts you can afford – one of the factors that should guide you when choosing the loan amount to apply for is your income. Applying for an amount you can comfortably repay will be a way of demonstrating your ability to pay back the loan.
  • Consider a cosigner – cosigned loans are usually less risky for lenders because they have several people from whom they can collect money in case you default on payments. The person you get to cosign for you should have a higher income and better credit than you.

In the end, choosing a suitable lender will also go far in helping to increase your chances of being approved. This means identifying a lender that is well matched to you and to your needs. Working with such a lender will also ensure that the repayment experience is seamless and stress-free.

Personal loans to stay away from

As much as people would rush to a loan shop when they need quick cash, borrowers should be aware of the types of personal loans to stay away from. While loans can help people address their financial needs and move closer to their goals, thorough research will help in identifying the products and lenders that are right for each individual.

Auto title loans, payday loans, and cash advance loans are known to have not only short repayment terms but also high-interest rates. However, a good number of people find themselves applying for these loans when they have poor credit. This means that the cost of borrowing will be high when you go for these loans. At the same time, the short repayment terms will automatically translate to larger installment amounts, making it harder for you to meet your financial obligations.

Even with bad credit, borrowers should avoid these three types of loans. A little research will help in avoiding instances where a borrower will end up in a worse financial situation. As you compare online lenders vs. banks, you should also take time to look at loans that could get you in trouble.

How to look for an online lender

Finding a good lender is one of the first steps in enjoying the benefits associated with personal loans. Below are some options to consider as you shop personal loans online.

  • Work with a loan broker – an online broker will charge you a fee for looking and finding the most appropriate loan for you. Most brokers know some of the best lenders in the industry. This makes your work easier and leaves you with time to attend to other issues.
  • Look for a loan aggregator- a loan aggregator works similarly as a broker. However, instead of charging you a fee, they will charge the lender. An aggregator lets you compare different options so that you can choose the lender that will effectively help meet your needs.
  • Search online – apart from helping you find a reliable online lender, an online search will reveal to you a clear comparison of online lenders vs. banks. However, you should make sure that you dedicate enough time towards finding a lender on your own.

Choosing the best lending source

Considering the facts relating to online lenders vs. banks, there is no single best source for every borrower. The loan company you go for will depend on the loan terms they offer as well as your individual circumstances. However, there are a few guidelines that borrowers can follow to find the right lender for their situation and needs.

In case you qualify for a loan based on your credit score and do not need the money quickly, you should consider taking advantage of the lower interest rates, higher borrowing limits and better loan terms offered by banks. On the other hand, if you do not meet most of the requirements, want a simple application process and need the funding quickly, you can go for online lenders.

How to find the right personal loan for you

Finding the right personal loan for you will require that you look at a number of factors. While pitting online lenders vs. banks, you should also take time to find a loan company whose qualifications you can meet. This will help you avoid the frustration of being rejected after you have spent time completing the application. Once you do this, you should establish the kind of customer care your preferred lender offers customers. This can be achieved by going through reviews to find out more about the experiences of other customers.

While applying for a personal loan is easy, getting approved is the hard part. Make sure you try to find out if an online application is right for your situation. This step will involve looking at your financial position as well as the use to which you intend to put the borrowed funds. Lastly, rather than going to a loan shop first, you should test-drive online lender platforms by getting pre-approved.

In the end, technology has played a critical role in ensuring that finding and applying for personal loans is quick and convenient. When you are looking to get personal loan online, you should make an objective comparison of online lenders vs. banks. One of the best ways of doing this is by conducting research through a third party. Our platform makes it easy for consumers to find reliable lenders, taking out personal loans that best address their needs.

How Do Personal Loans Work (And Don’t Work)

Posted on | by Jennifer McKnight | Leave a Comment on How Do Personal Loans Work (And Don’t Work)

Every one of us needs some extra cash at one point or another. Whether you are looking to work towards your financial goals or take care of a financial emergency, taking out a loan can come in handy. However, to make the most of the money you have borrowed, it is important to start by applying for the right loan.

With the numerous lenders that borrowers can access today, online personal loan shopping can be confusing. The good news is that consumers can identify reliable lenders by researching third parties that are not involved in the lending business. We not only make it easier for borrowers to find a lender but also seek to educate them about personal loans.

Personal Loan Basics

Simply put, a personal loan is a fixed amount of money, with a fixed interest rate and a fixed repayment term, given by a lender to an individual. Personal loans can either be secured or unsecured, with secured loans requiring borrowers to provide collateral to back up the loan. The terms of a personal loan will differ from one lender to another, with personal loans providing a longer repayment period.

When shopping for a personal loan, it is important for borrowers to understand the purpose for which they are taking out the loan. There are different types of personal loans depending on the use to which the money will be put. These include automobile loans, emergency cash loans, loans for medical bills, travel loans, debt consolidation loan, and wedding loans, among others.

Elements of a Personal Loan

While personal loans will generally involve smaller installments, the interest paid at the end of the repayment period will be higher than that paid on a shorter-term loan of an equal amount. Here are some elements of a personal loan to help you make an informed decision.

  • Principal – this is the amount of money you borrow. The lender will calculate the interest to be paid based on the principal you owe. Most lenders have floors and caps on how much they can lend as personal loans.
  • Interest rate – calculated as a percentage of the loan amount, interest is the amount you will pay on top of the principal. Most personal loans have fixed interest rates.
  • APR – The APR is the sum of the interest rate and other fees you have to pay to borrow the loan. In short, this is the total cost of borrowing money.
  • Term length – This is the period borrowers have to pay back the money. Personal loans have a fixed term, meaning that all monthly installments are the same.
  • Prepayment penalties – some loans will charge borrowers penalties in case they pay back before the agreed-upon term. It is important to check whether a loan has prepayment penalties before applying.
  • Other fees – whether you are taking out short-term or long-term personal loans, you should read the fine print to establish whether the lender charges other fees. These include origination fees and service charges.

Where to Shop for Personal Loans

While a personal loan is rarely a long-term solution, knowing where to shop forthe  loans can help you make the most of the money you borrow. As a general rule, personal loans will attract more interest. We help borrowers to compare terms from different lenders before finding a suitable lender. Work with us to make your personal loan search easy and convenient.

How Much to Borrow

The decision over how much money to borrow is one of the most important considerations borrowers struggle with before applying for long-term personal loans. The loan amount will affect how much you pay in interest, the number of monthly installments, the term of the loan as well as other fees involved. In addition to making this decision, it is important to remember that other factors determine how much one can borrow.

  • Income – just as income is one of the factors that help to determine whether borrowers qualify for a personal loan, it also influences how much you can borrow. Whether you wish to get a personal loan online or apply with traditional lenders, your income and job stability will be important factors to consider. The information will allow the lender to come up with a payment plan that is manageable for your income level.
  • Credit history – most lenders will give you money depending on how much of a risk you are. Since this information is derived from your credit score and history, past borrowing and repayment history will play a crucial role. Borrowers with a good credit history are in a better position to borrow higher loan amounts. However, the lender will advise on the most appropriate loan amount for each borrower.
  • Homeownership status – although most personal loans are unsecured, borrowers can choose to go for secured loans to access larger loan amounts. By securing their loan against their house, Homeowners can borrow a larger amount of money.

The amount is up to you and the lender

In the long run, borrowers will want to access loan amounts that will allow them to meet their financial needs. As a third party that makes it easy for consumers to find lenders, you can count on us for a hassle-free personal loan shopping experience. Whenever you are looking for the best long -term personal installment loan for your needs, we will be ready to help you find the right products.

What to Know Before Applying for a Personal Loan

If used correctly, personal loans can be a great way to advance life goals. However, consumers have to familiarize themselves with the basics of personal loan to make the right decisions. Here are a few things borrowers should know before getting a personal loan.

  • Credit score – the quality of your credit score plays an important role in determining if you qualify for a personal loan. The score helps lenders to decide how much of a risk a borrower is. This means that while a fair to good score will make it easier for you to access the amount you wish to borrow, a poor credit score can prevent a borrower from getting a loan altogether.
  • Income when you borrow is a factor – since most personal loans are unsecured, income matters when it comes to borrowing the loans. Borrowers who earn more are more likely to secure a personal loan from banks and other lenders. Some lenders will not give out loans to borrowers whose income is below a certain amount.
  • Interest rates and fees – some of the most important factors you should be mindful of when applying for a personal loan are interest rates and fees. These two factors will directly affect the loan amount and monthly payments.
  • Know how much you can afford to pay – even when you qualify for a loan, it would be important to do your calculations to determine whether you can afford to pay it back. The personal loan should not be more of a problem than the issue you wanted to handle.

What Should My Income Be?

It is clear that income is one of the important factors that determine your ability to get a personal loan. However, most borrowers ask just how much income they need to get a personal loan. This is because ensuring that you meet the lender’s requirements will go a long way in helping to increase the chances of getting your loan approved.

Generally, there is no set income requirement for any borrower to get a personal loan. While the average income figure is in the region of $ 15,000 to $ 20,000 a year, each lender will have different requirements. At the same time, lenders will also take into consideration other factors besides income. The amount that a borrower wishes to borrow will also be factored in. For borrowers who wish to borrow smaller amounts, lenders may not necessarily require that they earn a certain amount of money in a given period.

Although most personal loans do not require that collateral be put up before the loan can be approved, lenders should remember that taking out a loan comes with a degree of financial commitment. Borrowers will have to pay back the principal and interest at some point. This is why every borrower must carefully take into account their income and timeframe to pay off the loan to establish whether they will be able to service the loan without straining. Such planning before taking out personal loans will ensure that you are not overwhelmed by the process.

The Personal Loan Application Process

Applying for personal loans is a fairly easy process. However, borrowers must invest both time and thought to find the right product for their needs. Here is how borrowers should go about the process.

Compare your options

The fact that terms vary widely from one lender to the other makes it important to compare options before taking out a personal loan. While doing this, borrowers should figure out the type of personal loan they would like to apply for. Some of the factors to consider when comparing options include interest rates, fees, loan terms, and repayment terms. We help borrowers to find reliable lenders for a convenient experience.

Check the eligibility criteria

Once you have identified a suitable lender, you should go ahead to check the eligibility criteria. This will help you to avoid the disappointment and frustration associated with rejections. Checking the basic eligibility criteria will also prevent you from wasting time applying for a loan you do not qualify for. While basic requirements vary by lender, some common points include credit score, income, employment, residence, and age.

Complete the application

Today, most lenders have made it possible for borrowers to get personal loan online. Make sure you provide the correct information when completing the application. You should also submit documents such as your government-issued ID, proof of income, financial documents, and Social Security Number.

Wait for approval and receive your loan funds

After submitting your application, the lender will underwrite the application before providing feedback. Most personal loans go through the pre-approval, and full approval stages before the borrower can receive their loan funds.

Once you get a personal loan online, you should always remember that you have a responsibility to pay back the loan plus the accrued interest. Make sure you choose a repayment plan that you are comfortable with. Once you make the final payment, you should make sure that the lender closes your loan.

Common Reasons Personal Loans are Rejected

While applying for a personal loan is usually easy, the hard part is the approval process. Once a loan application has been rejected, it is natural for borrowers to feel frustrated. This is why it is necessary for borrowers to familiarize themselves with common reasons for personal loan rejection to avoid common mistakes and know how to deal with the rejections.

An error on your credit report

Lenders will reject applications for long-term personal loans when there is an error in the borrower’s credit report. Mostly, lenders will detect and realize these errors early on during the application process. The good news is that you can have genuine errors corrected if you take appropriate measures. If you believe the error was a mistake, you can write to the credit bureau in charge.

You carry too much debt

Even as you shop around for a personal loan, it is important to remember that your income-to-debt ratio will determine whether you qualify for the loan. If you are to avoid the frustration that comes with rejection and save time, you should pay off current debts or maintain them at manageable levels. The amount of debt you carry reflects on your financial discipline, planning, and habits.

Unstable employment

Most lenders will be cautious when lending to borrowers who change jobs frequently. While everyone understands that companies layoff staff and people change jobs from time to time, constantly changing jobs can be considered employment instability. Since this will have a direct impact on your income, lenders will reject applications where borrowers have an unstable employment history.

7 Common Reasons Personal Loans Are Rejected

Insufficient income

The amount of money you make from your income generating activity will determine your ability to repay the money you intend to borrow. Similarly, how much you earn will affect your income-to-debt ratio, an important consideration when approving loans. In addition to avoiding excessive spending habits, borrowers can consider getting a side hustle to boost their income.

Low credit score

Your credit score is an indication of your borrowing habits and financial behavior in the past. A low credit score is a sign that you are a high risk borrower, a factor that could lead to your loan being rejected. To increase the chances of your loan being approved, you should consider improving your credit score. This will require that you pay off your credit card loans and bills in good time.

Many personal loan applications with rejections

In case there are many rejections on previous applications, this could lead to another rejection. Since one of the most common reasons for rejections is poor credit, borrowers should strive to improve their credit score to break this cycle.

Pros and Cons of Personal Loans

It is critical to understand that all personal loans have their benefits and downsides. However, the downsides should not discourage borrowers from taking out the loans, provided they put the money into good use.

Pros

Personal loans can provide borrowers with a great chance to meet their financial goals. Here are some of the advantages of the loans.

  •  A personal loan can help you make a big purchase and break the large expense into smaller payments over time.
  •  Compared to what you would par for a credit card purchase, personal loans have a significantly lower interest rate.
  •  Personal loans can make for a great way to consolidate a number of high-interest credit card debts into one. You can then pay this easily as a single, lower-interest payment.
  • A personal loan can be an opportunity to improve your credit history. By making on-time payments over some time, you will be able to impact your credit score positively.

Cons

For all the positives associated with personal loans, they are not without their disadvantages. Here are some of the cons of personal loans.

  • When not used properly or for the intended purpose, personal loans can increase your debt burden. This could push the borrower into further debt.
  •  If you make late payments or miss payments altogether, this will hurt your credit rating. A poor credit score will make it hard for you to access financing in the future.

In the end, if long-term personal loans make it harder for you to pay your bills, you may want to consider your options. However, finding the best product for your needs by working with us will help you to reduce the chances of finding yourself in such a situation.

When to Get a Personal Loan

Taking out a personal loan can affect your life. This is why borrowers should apply for the loans only when it is absolutely necessary. Below are some situations when you can consider applying for personal loans.

  • When you can pay back promptly – you should take out a personal loan only when you can repay it. Paying all the installments promptly will help to avoid unnecessary stress and headaches.
  • When you need to cover emergency expenses – there are times when you will need to cover some emergency expenses but do not have the money to do this upfront. In such cases, you can take out a personal loan and pay back the borrowed amount over time.
  • When you can use the loan to make money – in case you wish to invest, you can apply for a personal loan to help you take advantage of the opportunity. Once you make money, you will be able to repay the loan comfortably.
  • When you are looking to improve your credit rating – some people use personal loans as an opportunity to improve their credit rating. However, you should be sure that you will not make late payments or miss payments.
  • Long-term personal installment loans have lower installments amounts, making it easier for borrowers to meet their financial obligations. When the regular installments on your loan can lead to financial constraints, you can consider renegotiating the payment term with the lender.

When to Avoid Getting a Personal Loan

Before undertaking personal loan shopping, you should be certain that taking out the loan is necessary. There are a number of alternatives to applying for these loans.

Instead of getting a personal loan for weddings, vacations, or buying a car, you can consider saving up for the expenses. Alternatives, it would help if you can boost your income by looking for a second job or side hustle. You should also avoid taking out personal loans if you ended up over-borrowing. In case you already have numerous debts, you can cut down on your expenses to settle them instead of taking on more debt. Lastly, while these loans can help borrowers to improve their credit score, things do not always work as planned. Renegotiating with lenders and paying off current debts would be a better way to build your credit.

Financial experts recommend that consumers take time to evaluate whether they need long-term personal loans before committing.

What if I Can’t Pay Back a Loan

There are many reasons why borrowers fall back on their payment plans or find themselves unable to pay back their loan. Such a situation can be a source of stress and worry since most lenders will keep sending reminders and warnings at such times.

In case you had forgotten to make the payment, you should try to submit it as soon as you can. However, if you are no longer able to pay back a personal loan, it is natural to be anxious. We recommend that such borrowers take a deep breath and try to calm down. As much as interest on the loan will keep rising, borrowers who are unable to pay can talk to their lender about their financial situation. If you are lucky, you can renegotiate the terms of the loan, changing it to a long-term personal loan that you can repay with more ease.

Personal Loan Fees

One of the benefits of personal loan shopping is that it may help you identify the right loan for your needs. At the same time, you will be able to compare different options, separating lenders based on whether they have additional or hidden charges.

  • Application fee – some lenders will charge an application fee when you take out a personal loan with them. It is important to find lenders who do not charge this fee, since you will end up wasting money if your loan is not approved.
  • Administrative fee – this fee covers the cost of processing paperwork for the loan. You should try to identify lenders who do not charge this fee.
  • Personal loan origination fee – this fee comes out of the loan rather than the borrower’s pocket. It is meant to cover the cost of application and processing, effectively including both the application and administrative fees.
  • Personal loan late payment fee – in the event that you are late on personal loan repayment, you may incur a late payment fee. This fee will vary from lender to lender.
  • Prepayment penalty – there are lenders who will punish you for paying your loan earlier than the agreed-upon time. While shopping for a loan, you should choose lenders who do not charge a prepayment penalty. Once you are familiar with these fees, you will be in a position to make informed choices when taking out personal loans.

Final Words

There is no doubt that, if used properly, personal loans can help you achieve your goals. However, during your personal loan shopping, you should do enough research. We help consumers to not only compare the different options available but also find a reliable lender. Whenever you are looking to get a personal loan online, consider working with us for a great borrowing experience.

Guide To Personal Loans