Construction Loans Can Be a Constructive Wealth Building Tool

Construction loans are a different creature than many other sorts of real estate or small business loans. Basically, they’re short-term arrangements you use to finance the construction (or major restoration) of a home, business, or other physical property.

Unlike a traditional home loan, the property which would otherwise naturally operate as collateral for the loan hasn’t been built yet, making the loan more of a risk for lenders. Approval often requires submission of detailed plans for the project. And some evidence of the qualifications of those involved – along with in-depth credit checks on the borrower or borrowers.

Once the property is completed, or a specific point on the timeline has been reached, any balance is paid off through the sale of the property. Or it’s refinanced as part of a longer-term mortgage or a more traditional, longer-term loan, often referred to as the “end loan.” We’ll come back to this and a few other terms you’ll want to know before you loan shop for this or similar types of loans.

Types of Construction Loans

Because construction loans are higher-risk than traditional mortgages, they are more difficult to secure. And interest rates tend to be higher. Terms vary widely, depending on the lender and the needs of the builder. Some construction loans are required to be paid in full by the projected completion date of the project. Others may be set up as “interest-only” loans. So that buyers pay only a minimal amount until the project is ready for sale.

Some builders prefer to set up construction loans as a “line of credit”. They’ll secure approval on the total they’ve calculated they’ll need , but only draw funds as required. The advantage to this approach is that they’re only making payments on money they’re actually using at the time, almost like a credit card. Interest only accrues on the amount actually withdrawn as well, saving the borrower substantially over the long-term.

Borrowers new to construction loans may find it strange that substantial down payments – often as much as 20% or 25% to pay down – are often required. Such down payments are intended to establish that the borrower is fully invested in both the short and long-term success of the project. And to “spread out” the risk a bit. In any case, they’re a standard feature of most construction loans.

Why Take Out A Construction Loan for Building Wealth?

There are really only two basic reasons for any construction. You want to use the property or sell/lease the property for profit. Maybe there are a few people out there with artistic souls who simply wish to create large, expensive buildings. Then paint them pink or label them with the names of victims of war crimes. Or simply go all Andy Warhol and pack them with multi-chromatic images of some pop culture figure or another, then walk away. But there can’t be many, surely. Most artists simply don’t make enough for that sort of thing.

Let’s assume, then, that the primary goal of most construction loans is personal use or profit.


Construction Loans for Personal Use

Not everyone can afford to supervise the building of their own home (or serious remodeling). And even fewer of us have the know-how to really do it well. That doesn’t mean it’s impossible, however. Especially with the right vision and a willingness to do one’s homework ahead of time. You don’t have to know how to do everything yourself. But you do need to understand what needs to be done. More importantly, you have to be able to find the right people to make it happen. People you can more or less trust to be the experts at their little slice of the whole.

Personal use means the borrower will be covering the final cost of the project themselves, making the process somewhat similar to what you see at the larger end of personal cash loans. Lenders will look at your personal credit history, current income, and other indicators of your ability and reliability to pay. It can be tricky, and you may have to provide more documentation than with some other types of loans. But there’s no reason to assume it’s not doable if you’re serious. Of course, thinking about the cost of a loan is a must. Loanry can help you find a good lender, a lender who will be open and honest about everything from the beginning.

Whether you’re building from scratch or restoring something which had up until now seen far better days, keep in mind that strategic choices about what you build, how you build, and where you build can mean serious tangible value in the results. To put it another way, make good choices and you’ll have a home that’s worth more than you spent to build it. And which may only continue to increase in value as you live in it, love it, and take care of it.

Even if our intention is to retain ownership and never sell the property, increased value improves your ability to secure future home equity loans. And it strengthens your overall financial situation. It’s impossible to predict the future or issue any absolute guarantees. But homeownership has traditionally weathered all sorts of ups and downs in terms of providing personal security. It’s arguably the most important wealth-building tool in modern American life for the majority of citizens like you.

As a bonus, there’s really no substitute for owning a house you love.

Construction Loans for Business Use

Building for sale or lease is a slightly different game in which the reputation of the builder as a businessman (or businesswoman) comes into play. Obviously, lenders are more comfortable approving construction loans for borrowers with an existing track record of successful repayment, refinancing, or other favorable loan resolution. Even in this dynamic, however, there are multiple variations which may be in play.

If you’re a small business owner looking to establish yourself or expand from your current location, it may be that existing sites prove poorly suited to your needs. It may be that construction targeting your specific needs is the way to go. In that situation, you’re utilizing your construction loan for business use, but not to sell. You’re moving in!

If your expertise is in construction or some part of construction, or if you’re knowledgeable about real estate in your area or otherwise plugged into local business or residential dynamics, then you’re confronted with the same basic dilemma as any other entrepreneur. Do I work for others, or step out on my own? Am I more concerned with security, or do I want to be my own boss, take my own risks, and possibly win (or lose) big?

Unlike many other sorts of entrepreneurs, however, if taking that sort of leap involves construction loans, there’s no working your way up from your home office or garage with minimal risk. They are an “all in” proposition. That part where you might win big or lose big is far more significant in this line of work. But that by itself shouldn’t stop you. Only you know if you’re just as smart, just as skilled, just as determined as the next person.

If you do take that leap, you’ll quickly learn there are things you can’t always control. Choosing the right construction loan shouldn’t be one of them. You have options, whatever your credit history and whatever your professional background. This is the 21st century, and while there’s no reason you can’t sit down with your local bank or credit union and find out what they’re willing to do, that’s no longer your only option.

We maintain a carefully moderated database of reputable online lenders who’ve established themselves as both reliable and willing to work with a wide range of borrowers. Our goal is a bit more comprehensive than helping you borrow; we want to offer you a centralized source of financial sanity, assistance, and assurance. Still, we’re really quite good at the “hook you up with just the right lender” thing. We can also offer you education and insight on a wide variety of loans and related concerns.

It’s something of a point of pride around here, actually.

Construction Business Loans to Help Build Your Company

“Take-Out Commitments”

Wanna order Chinese tonight? Come on, you promised!

Sorry – “take-out commitments” are a bit more involved than that. And you don’t get spring rolls.

Remember above when we said that short-term construction loans often convert into longer-term, more traditional loans after the completion of a project or reaching a certain point on the timeline? Generally (although not always – there simply aren’t that many “always” moments when it comes to construction loans), different lenders provide those long-term mortgages or other loans than the short-term construction loan you are replacing. These short-term lenders often specialize in “bridge loans” and the special circumstances involved. And they prefer to hand off the lower-profit (but less risky) stuff to more traditional institutions.

A “take-out commitment” is an agreement ahead of time between that more traditional, long-term lender and the initial short-term lender that this is, in fact, what will happen.

As you might imagine, this changes the dynamics substantially. On the one hand, it means much greater security for the initial lender. Depending on the specifics of the agreement, they now have a more-or-less guaranteed safety net for what is otherwise a relatively high-risk loan. If the builder for some reason fails to follow through, or supplies don’t show up on time, or it turns out global warming really does flood the earth, they still have a buyer for whatever’s left of the loan and the terms have long-ago been settled.

This doesn’t mean the builder is completely off the hook of course. Ideally, they’re part of the process the entire way. And they don’t flake out, the supplies do show up, and the glaciers melt slowly enough that we can move to higher ground. And both the long-term lender and the initial short-term (or “bridge loan”) lender usually have very specific terms woven i. Which makes sure the onus is on the guy running the project to make things work out – not the lenders’.

Much like the bank doesn’t really want your car, your house, or your firstborn, such terms are all about accountability and security. Not about taking over your business park or remodeled vacation home. They just want those payments to be made and for you to be happy with whatever it is you’ve just built.

Still, I doubt they’d say no to a spring roll. And I love that weird pink sauce…

FHA 203(k) Loans

You’re probably familiar with FHA loans, at least in general. These are loans that Federal Housing Administration guarantees. And they aim at helping first-time homebuyers acquire housing on reasonable terms and at a good interest rate. The FHA doesn’t actually loan the money. But they do act as “back-up” on the loan. Allowing lenders to extend credit on favorable terms to those who might not otherwise qualify.

An FHA 203(k) is similar, but designed to help borrowers secure a loan to purchase a home in need of serious renovation. Especially if located in older communities or areas otherwise identified by federal officials as likely to benefit from a few upgrades. The terms cover not only the cost of the property, but the essential work and supplies necessary to make it move-in ready.

The FHA 203(k) is not available for purposes of “flipping” or other forms of real estate investment. The idea is to put families in nicer, newer homes. Down payments are usually modest and interest rates favorable. Although they will still vary to some extent based on the credit history of the borrower. There are unique fees and paperwork requirements, so prepare yourself to spend some time on small print. It’s a great program, but it’s still the government after all.

Common Risks of Construction Loans

Most professionals already know the ins and outs of construction loans. If you’re an individual looking to start a business or use a construction loan to build or renovate your home, however, there are common potential pitfalls of which you should be aware. Here are three rather important facets of any building project which are harder than you think.

#1: Overseeing Construction

There’s a reason people hire professionals to run a construction site. Watching a few HGTV shows and knowing how plumbing works is a great start and all. But don’t think that just because you know your way around a two-by-four that you have the expertise to handle the project yourself. Not to mention that you probably have a full-time job already.

#2: Hiring a Contractor

It’s essential to find the right contractor for the job, but it doesn’t stop there. Accepting a bid or even signing an agreement isn’t the same as a successfully complete a project. Firing a contractor which does not do a good job is possible. But it causes as many complications for you as it does them. Construction is a job best managed from a big picture, unified process approach. Interruptions and changes are almost always bad – even if they’re otherwise necessary .

While most contractors are no doubt honest, capable people, it’s not unheard of for contractors to walk away from projects. It might be the money, it might be the personalities. Or it might just be that a better offer has come up. This doesn’t only leave you in a tough logistical position. It can cost you substantially as you scramble to find someone to pick up wherever things the contractor did not finish. A job suddenly harder than hiring someone in the first place.

#3: Managing Your Construction Budget

Construction involves a substantial investment of time and resources utilized methodically and efficiently over time. It’s in many ways a constantly shifting puzzle with big, heavy pieces. Failure to manage available resources has been the downfall of more building projects than perhaps any other single factor.

Even if your plans are well-laid, you’ll be dealing with a range of both workers and suppliers at different stages along the way. Neither of which are ever entirely predictable. Then, of course, there’s the weather, which none of us can fully predict, let alone control. Throw in that random county inspector, animal infestation, or late-night vandalism, and you simply never know what might complicate your plans and derail your budget.

Experienced builders plan for the unforeseen and learn to balance flexibility and focus on the endgame.


Construction loans are a very specific, and at times risky, financial arrangement. They also make most of the building and progress you see in any thriving community possible by providing builders the credit and flexibility necessary to make things happen.

If, after learning more about construction loans, you think this might be the right solution for your plans, let us know. We’ll gladly point you to the right people to help you move forward with your project.

When it’s done, we’ll celebrate. Do you like spring rolls?


What Can I Do to Avoid A Personal Loan?

I know what you’re thinking. “Dude, are you sure you’re writing for the correct blog? I thought you guys were all about hooking people up with lenders and yay personal loans! If I avoid a personal loan, aren’t you doing everything wrong?”

I prefer to think of it in terms of helping people get themselves into a better financial situation. Sometimes a different perspective can help clarify our options. And if I slip into motivational mode a little here and there along the way, forgive me – it’s my nature and I can’t help myself.

How Can I Avoid A Personal Loan?

If you don’t owe anyone money, we’d like to help you avoid getting into unnecessary debt. If you have poor credit, we’d like to guide you through improving your credit rating so when you do need a loan, you can get one on better terms. And if you’re feeling a bit financially shaky, but you’re not sure how to wrangle things back on track, I’d like to offer encouragement and help you avoid a personal loan you might not need now so that you’re in a better position if you choose to go that route in the future.

Obviously, if you want a loan, we’ll help connect you to someone legit and let you work it out with them. (We don’t actually loan money or sell you anything ourselves; we don’t even have mugs or t-shirts).

But wouldn’t it be better if you could avoid a personal loan to begin with?

Avoid A Personal Loan By Maintaining A Personal Budget

Personal loans aren’t bad. They can help consolidate debt, lower your overall interest rates, handle unexpected medical or repair bills, finance large purchases, and even help you build (or rebuild) your credit. But they’re not magical solutions, either. If you’re spending more than you make, no variety or combination of personal installment loans is going to solve that. In that situation, you don’t need another loan; you need a good budget.

Budgets don’t all look the same. My wife is very methodical about hers. She maintains a detailed spreadsheet, with formulas and everything, and only takes on debt when it serves a very specific purpose. A rough month for her is one in which she’s not able to put the usual amount into savings. At any given moment she can pull up information about any of it on any device she’s using.

I, on the other hand, find it both practical and essential to use several credit cards – regularly, but not recklessly. My income varies throughout the year, so access to revolving debt via modern plastics is a practical way for me to keep things consistent. I have a good idea of my obligations each month, and years of crushing debt and personal humiliation taught me to budget accordingly. I use legal pads and I scribble a lot.

Why am I telling you this? Because the number one way to avoid a personal loan is to budget yourself, even if there’s more than one effective way to do this. I’m not trying to guilt you out of anything beyond basic shelter and a few dry crusts of bread. I’d rather you be happy than rich. But a tangible budget in any format, hard copy or digital, forces us to acknowledge where our money is coming from and where it’s going – Adulting 101.

The Power of the “B-Word” (Budgets)

Although it’s not important that your budget looks or operates exactly like mine (or my wife’s), let’s look at a few steps towards organizing your own. First, though, a disclaimer. I don’t want to go all “safe space” hugs-and-puppies on you, but considering we’re mostly talking about numbers, it’s surprising how many “feels” can pop up – especially if you haven’t done this before.

The steps themselves aren’t complicated, but some of us find them very difficult. Money and how we spend it can be personal and emotional to discuss. It can challenge our self-worth and reveal things about ourselves we may not want to know. Some of us get defensive (I always did, back in the day), some of us get angry, and some of get depressed and don’t want to think about it at all.

I told you I was a motivator. You feel better already, don’t you?

I’m not trying to be a downer. It’s just that emotions, like most things, are easier to deal with if we acknowledge them up front. Are you worried about what some basic math might reveal if you run the numbers? I get that. I’m a big fan of denial – just ask my first wife. It’s just that denial doesn’t work.

A few of you have no idea what I’m talking about right now. To you, it’s just numbers and practical decision-making and what’s the big deal? The way to avoid a personal loan is obvious – don’t put yourself in a position where you might need one! For the rest of us, though, making a personal or household budget can be an act of messy courage. It can take nerve. Grit. Moxy. Some have even compared it to overcoming drug addiction.

Alright, let’s grab some tissue and a glass of wine and let’s get started.

Creating Your Personal (or Family) Budget

Step One: Gather Information

This might take a few hours or a full month. You’ll want pay stubs, utility bills, mortgage information, car payments, grocery store receipts, medical bills, credit card statements, ATM receipts, and anything else related to money coming in or going out.

Some experts recommend computing your own debt-to-income ratio. It’s a useful exercise, but I’m not pushing you that far yet. Right now we’re just trying to get a clear list – on paper or screen – of what’s up with our finances these days.

Why? Because many of us simply don’t realize where our money goes. We may think we don’t eat out very often, but your credit card statement says otherwise. We may think we’re careful with our cash, but this says you made a $300 withdrawal two weeks ago and you have $24 in your wallet and no idea where the rest of it went. You want to avoid a personal loan? Know your own spending. In detail. With honesty.

Please understand, I’m not telling you how to spend your money. I’m suggesting that you should be making conscious decisions about how to spend your money, not just improvising and hoping for the best. I’ve been there, remember?

The Untold Tricks to Negotiating Your Bills

Step Two: List ALL Expenses

Some monthly obligations are fairly consistent – your car payment, your house payment, etc. Others vary from month to month – utilities, groceries, gas, etc. Write them all down, with the most accurate figures you can manage.

You’ll adjust this part several times in the first few months. That’s OK; it’s part of the process. Expect some of your estimates to be off, and for there to be a few surprises. That’s one of the major reasons we’re even doing this. That doesn’t mean you’ve done it wrong; it means you’re doing it better and better as you learn.

If you determine that you make enough to cover the essentials with a little left over for the optional items on your list, you can easily avoid an unsecured personal loan online or any other sort of new debt as long as circumstances don’t change dramatically. So, yay!

Step Three: Compare Your Income To Your Expenses

If emotions haven’t kicked in yet, this is the part where they usually do.

In a perfect world, you’ll have at least 10% more income than expenses. If that’s the case, congratulations! You win at America! Skip to a post about savings accounts and planning for the future.

If your world isn’t perfect, hopefully, your income and your expenses match up pretty well. If so, feel free to skip to the money-saving ideas below to try to reach that 10% or better balance above.

For many of us, however, our expenses are apparently larger than our income. That’s not ideal, but it certainly would explain a lot. It’s not that you’ve failed or you’re doing everything wrong; you just literally don’t have enough money to do everything you’re currently doing.

Now, if things have already gotten too severe, and things are being repossessed or turned off, you have more immediate concerns than how to avoid a personal loan. Before we can talk about digging yourself out, we need to stop the proverbial bleeding and stabilize the patient – in this case, your economic life. This may require reaching out to local social services, religious organizations, or charity groups when you need help paying bills.

I’m going to assume it’s not quite that bad, however, and that you’re somehow getting by enough to keep digging yourself deeper and deeper into debt. Maybe it’s those student loans, or even worse – medical bills. Maybe you lost your job at the worst possible time, or just came through an ugly divorce. Whatever the situation, you’re in debt and the situation is unsustainable. If it doesn’t start getting better, it’s going to get much, much worse.

Either way, stay with me through Steps Four and Five. There’s always a way through. It may not be pretty or fun, and you may not avoid a personal loan of some sort along with some lifestyle adjustments, but it’s doable.

YES, for you. YES, in your situation. Why are you even arguing with me in your head like that? How rude.

Step Four: Prioritize Your List

This part tends to start easyly and quickly gets weird. Your house payment should go at or near the top, along with your car payment (if you have one). Utilities, although the electric seems a big high – is there something we can do to get that under control without making ourselves too miserable? Groceries are important, although it looks like we got $40 cash back on this one and another $60 a week later. Where did THAT money go?

What’s this recurring charge on the credit card from some place I’ve never heard of? When did the cable bill go up? Why didn’t we record this check? I have the amount but no idea to whom it was written or why. Can you even listen to this many new downloads in one month? And I’m glad you’re paying for legal streaming instead of using your cousin’s log-in, but are you really likely to watch Hulu AND Netflix AND CBS Streaming AND…?

You get the idea. If we want to avoid a personal loan, we’re going to need to get a grip on some of these miscellaneous expenses. We’ll come back to this in a moment, but first, let’s finish figuring out a budget that we’re spending every month.

It’s helpful to have multiple columns. I always start with “Non-Negotiables”: house payment, car payment, any outstanding loans with fixed payment amounts each month. These will be largely the same every month for the foreseeable future. That may not make them easy to pay, but it does make them easy to anticipate.

I put utilities and credit card payments in a second column I call, quite cleverly, “Credit Cards & Utilities.” These may not seem related at first (and you don’t have to combine them for your own budget), but they’re essential to pay each month, on time, and yet their amounts vary each cycle – sometimes widely. (Side note: if your local utility companies offer one of those payment averaging plans so that the amount due each month doesn’t fluctuate quite so unpredictably, DO THAT.)

Third are things which are “Important,” but over which we have at least some control. Groceries must be bought, but meals for a week might cost $60 or $200, depending on your choices. Gasoline, clothing, anything you can influence but not do completely without.

I used to combine everything else into “Other,” but I’ve recently found it more helpful to be more specific. “Optional But Useful” includes stuff like my cell phone payment, cable, internet, etc. Technically we can live without these, but as a practical matter… well, personally I’d probably spend way more on other things if I didn’t have cable and internet. Still, I may not need it all. “Fun Stuff” is eating out, movie tickets, concerts, Amazon downloads, books and magazines, etc. Stuff we could easily survive without but makes life more fun. Finally, I have “Unpredictables.” It’s not good grammar, but it seems this column always has something in it nonetheless. It’s also rather difficult to budget for; stuff which goes in this column tends to be, um…

I probably don’t need to finish that sentence, do I?

You may find a slightly different structure works better for you. It’s your budget – organize it as you see fit. But DO organize it. And then DO move on to Step Five. Remember, we’re trying to avoid a personal loan, even if things aren’t looking as rosy as we’d hoped at this point.

Speaking of which, you might not like me as much after this next part. Please know that I still love you the same.

Step Five: Time To Make Some Difficult Decisions

Do you know why most of us have so much trouble losing weight? There are plenty of reasons, but one of the biggest is that you don’t have to eat badly all day every day to have a weight problem. You probably eat nothing at all during the eight hours you’re asleep. You may eat quite reasonably – maybe even exercise a bit – during fifteen of the sixteen hours you’re awake. The problem is that the remaining hour. Thirty minutes for fast food at lunch (“just this once because what a day!”) and another half-hour in the evening when you decide to finish off the leftovers (“no one’s going to eat them anyway if we save them”) and the diet is blown.

It’s truly not fair. Take it up with the Universe, I guess.

One great way to get your debt off your back is to use the debt snowball method. It really helps you reach your goal, but you have to stay with the methodology of paying off the lowest debt first.

Bad spending choices are the same way. It’s not that most of us are spending wildly all day, every day. It only takes a few weak moments a week to reverse whatever progress we’ve made. It’s especially bad if we convince ourselves we’re going to radically change how we spend money – we’re not merely going to avoid a personal loan, we’re going to climb out of debt and into a comfy retirement package before the next snowfall! You know what happens when we try this with diets – eagerness, enthusiasm, energy! For about five hours! Then… we slip. We fail. It’s all over. Forget it. It’s never going to work. I quit.

Or maybe that’s just me.

I hope it’s not just me. (Tell me it’s not just me?}

Avoid A Personal Loan By Cutting Expenses

Just like improving our eating habits, we’re not going to talk about revolutionary changes. If you make those sweeping fixes instantaneously, that’s great! Good for you. For the rest of us, though, I’ll conclude with ten of my favorite ways to avoid a personal loan by shifting the balance between our income and our “out-go.”

1.    Take your lunch one or eat at home a few more days a week. If you eat lunch out every day, take a sandwich twice a week. It won’t kill you. If you take the family out twice a week, cut back to once. Don’t shun everything you enjoy; just look for ways to shift the balance.

2.    Cut back on smoking, drinking, or whatever other expensive vices you may have. I’m not lecturing you on the downsides of vaping or alcohol or whatever. But as you well know, that stuff is expensive. If quitting isn’t realistic, see if you can cut back by a quarter. Maybe a third. If you like to have a glass of wine or a beer in the evening, buy it at the grocery store and have it at home – restaurants charge huge mark-ups on that stuff.

3.    Carry less cash. If you need to have a few bucks for unexpected situations, that’s fine, but try to limit the amount of spending you can’t document at the end of the week. Ask for receipts even when you stop and the convenience store for a snack and a drink. It’s your money; spend it how you like – but be willing to own it and keep track of it.

4.    Plan travel to limit wasted driving. If you have kids, you probably already do this out of the necessity of keeping everyone’s schedule straight. If your kids are older, or you’re child-free (congrats!), however, it’s easy to get casual about driving across town to get your hair cut, then home. To the post office, then home. To the store, then home. That’s fine, but it adds up in both gasoline burned and wear and tear on the car or truck.

5.    Go easy on the groceries. I understand why you buy bottled water, but it’s crazy expensive compared to tap water, even after a cheap filter from the hardware store or one of those fancy pitchers. If the store brand of whatever you’re buying tastes crummy, avoid it, but come on – is it really that different? (Half the time they’re literally the same, other than the packaging.) And for goodness sake, eat those leftovers. Better yet, make extra on purpose and freeze it for next week – that way you’re buying in quantity (cheaper) and more likely to eat at home when you’re in a hurry because all you have to do is reheat.

6.    Cancel that gym membership. Unless you’re really going – regularly. And going already, not theoretically starting next week.

7.    Use your local library and resale shops. How many times are you going to read that book? Are you sure you need to own that movie? Go check out your library – they’ll be thrilled to see you, and it’s all free. When you buy, try the used bookstore, used CD shop, etc., first. Even on Amazon you should browse used options before you decide. Once you get it home, it’s “used” anyway.

8.    Pay your bills on time. I realize this sounds like a strange one, but late fees and interest and such add up crazy quickly on most credit cards, utilities, or other commitments. It’s one thing if you simply don’t have the income to make it happen (see above), but far too often it’s more that we lose track and simply don’t keep up with what’s due and when. Defaulting on your existing loans or obligations is counterproductive and will catch up with you. Plus, it’s just wrong.

9.    Check out online rebates, coupons, prescription savers, etc. Don’t waste hours poking around for fake bargains on the internet, but major department stores and many name brands put significant coupons on their websites for stuff you were going to buy anyway.

10.    Call everyone you owe and start cutting. Don’t renew that magazine. Cut some features from your cell phone plan, cable TV, or whatever it is you do on the internet. I’m not suggesting you bail on something to which you’ve already committed, but you’d be surprised how flexible many providers get when you call to cancel or reduce your service. (This sometimes works with stuff like car insurance as well.) Do you really watch that much HBO? Need that much data on all four phones? Look over every bill, whether online or mailed to you.

Maybe your best friend keeps one streaming service and you keep the other one, then you trade off watching at each other’s house. That saves you even more because you’re not out buying overpriced beer at some sports bar before your overpriced snacks at the movie teenagers will ruin by talking the whole time anyway. That’s a TRIPLE WIN.

BONUS: If you want inexpensive fun one evening, search the internet for other ways to save money. Surely there will be a FEW idea I haven’t mentioned which would work for you. And they’re free.

Final Thoughts

If you decide it makes sense for you in spite of all this to take out a personal loan to consolidate other debts, well… it turns out we can help with that. You don’t have to loan shop alone. We’re actually experts at helping folks like you find options for unsecured personal loans online. You may feel like things are desperate right now, but trust me – it won’t help if you rush in blindly and get taken advantage of by some sketchy “fast cash” place behind the gas station or any of the many online loan scams out there. Let us help you find a lender only if you need it, but your first goal is to avoid a personal loan.

In the meantime, don’t give up. It might take a while, but you can do this. Really.


Do Personal Loan Companies Require Proof of Income?

We do not like to admit it, but we all fall on hard times. We have all seen times when we lose or decrease our income. There are even times when we face unexpected expenses for emergencies. We all wonder at some point where to get a loan. We also wonder how to find the best loan for my needs. Facing that situation is difficult and stressful, but finding the right loan does not have to be. You just have to know some key information and use tools to loan shop online. Continue reading to find out more information about personal loan proof of income.

What Is A Personal Loan?

Let us talk about personal loan basics, first. If you are considering a personal loan or even unsecured personal loans online, you should know some information. A personal loan is when a lending agency gives you money that you must back. You are required to pay back the loan with regular monthly payments over a set period of time.

That period of time is usually three to five years. That time period could be different based on the lender. Personal loans are considered unsecured loans, which means you do not have to provide collateral to get the loan. You often must provide personal loan proof of income.

Do I Need Proof of Income?

A lender always wants to see personal loan proof of income before approving you for a loan. For a regularly employed person, it is not difficult to provide proof of income to a potential lender. However, there are non traditional employees working. They may be self employed and do not give themselves a pay check. The total income of the business may be payable to the self employed person.

There are other individuals that have S Corporations, also known as S Corps. These individuals separate the earnings of the business from their personal earnings. This protects these individuals from a liability associated with the business. However, it also requires that this individual takes a paycheck. If he or she does not take a paycheck, that person really has no proof of income.

What Qualifies as Proof of Income?

For those who are not a typical employee and do not have a regular paycheck to provide to a lender as personal loan proof of income, have no fear. There are other Personal Loan Proof Of Incomemeans of proof of income that lenders accept. A W2 is an important tax document that tells a lender how much money you have made in the previous year and from which employers. A lender may also accept your tax returns if you are self employed. This clearly lists the income you earned for the prior year. However, keep in mind, a tax return only lists the income that you claim.

If you do not claim it, it does not show up on your tax return. Be careful and make sure you have claimed all of your income if you present your tax returns. You may also be able to provide a payroll schedule or payroll documents as proof of your earnings. This is especially helpful for those who do not get paid on a regular basis.

If you are a contractor or work as freelance employee, this may also be a great way for you to prove your income. A signed letter from employer is another personal loan proof of income that a lender may accept. This is a letter signed by your stating that you work for that company. This also acts as proof of income and that you are able to repay the loan.

You may also use bank statements that includes statements of direct deposit which shows that your employer has made deposits into your account. It shows how much is being deposited and how often. If you are of retirement age, a lender may ask for other personal loan proof of income.

You may need to provide statements of how much money you are receiving in Social Security benefits, if that applies to your situation. If you are old enough to supplement your income with investment income, a lender may request that you provide proof of that income. The same is true if you receive income from any type of retirement savings account. Be prepared to show proof of any type of income that you receive.

Can I Get a Personal Loan Without Proof of Income?

I am going to be honest with you here, it is difficult to get a personal loan without any proof of income. There are, however, other loans that you may be able to obtain. There is loan that does not require you to have a job. A title loan is when you use the title of a car, vehicle, or motorcycle as collateral for a loan.

The way it works is quite simple. You give the lender the title and the lender lets you borrow a set amount of money. You cannot borrow more than the value of the vehicle that you are using as collateral. Typically, the lender does an appraisal of the vehicle you are using as collateral to determine how much it is worth. In general, you have about 30 days to repay the loan. If you do not pay back the loan, the lender takes the title and keeps your vehicle.

How Much Money Can I Borrow?

Personal loan amounts can range from $1,000 to $100,000. Your income is a huge factor in how much you can borrow.

Lenders want personal loan proof of income to help them make a decision. You need to earn at least $15,000 a year to get a loan at the lowest amounts. If you want a higher amount such as $100,000, then you need to make 10 times $15,000, so roughly about $150,000. This type of income helps the lender feel confident that you have funds to pay the loan. Either way, the lender wants personal loan proof of income to provide proof of your annual income.

What Are My Chances of Getting Approved for A Personal Loan?

At the end of the day, the lender decides if you get a loan. There are certain things you can do to improve your ability to get a loan. You can help yourself by doing these things before applying for a personal loan. First, you should get a copy of your credit report and review it. There may be errors on it that you should fix before applying for any personal loan.

Determine your credit score, so you know where you sit on the credit scale. You cannot work to correct your credit problems unless you know your credit score. You should begin to pay down as much of your debt as possible. In addition, focus on your current debt by paying all of your bills on time. You must pay the appropriate amount on time every month to improve your credit score. Most importantly, do not file for bankruptcy as that stays on your credit record for seven to ten years.

Other things that impact your credit in a negative way are constantly changing jobs. Staying in a job shows that you have stability and make lenders willing to lend you money. It shows that you are responsible and more likely to not default on the loan.

Are There Different Types of Personal Loans?

Yes, there are several different types of personal loans. What really defines them as a personal loan is that they are unsecured. There are medical loans available to those who need money specifically to pay medical bills. There are vacation loans for those interested in paying for a vacation in one amount without having to save the money. Some are even taking out wedding loans when they need money for their wedding. You can get a debt consolidation loan that is a personal loan.

You can even get personal loans online. When you loan shop online be sure that the lender is a reputable one. Be aware that most online loans have a higher interest rate. No matter which one you choose you must provide personal loan proof of income.

Why Should I Care About the Interest Rate?

Interest rates are incredibly important. The most basic definition of an interest rate is the amount a lender charges you to borrow money. The base amount you borrow is the principle. For example, you want to borrow $10,000. That is the principle amount you are borrowing. The lender assesses your credit worthiness (more later in this article) to determine how much interest to charge. Interest is referred to as the interest rate. An interest rate can as low as 5% or as high as 29%.

Your credit dictates the interest amount. If the lender charges you 10% interest, that adds $1,000 to the amount you borrow. Now, you pay back $11,000. This does not include any fees the lender may charge. The lender uses this amount to determine how much you repay per month. A higher interest amount can significantly increase the amount you pay per month. Always be sure to read the fine print.

How Can I Qualify for A Personal Loan?

Now you think you want to apply for a personal loan, but you wonder if you can even qualify for one. There are some things of which you should be aware to help qualify before filling out personal loan paperwork. You must submit some type of personal loan proof of income. Lenders look at your credit rating to determine if they want to lend you money. They look at your debt to income ratio.

The best way to understand this concept is to understand the amount of money you bring in each month in income. Then you must understand how much money you owe in debts and expenses each month. When you have a good concept of these numbers then you can see the difference between the two.

Can I Get A Personal Loan with Bad Credit?

A lender uses your credit score to determine how safe it is to loan you money. Your credit score is an important three digit number that determines many things for you. It indicates to lenders how likely you are to pay back the loan and tells lenders what your credit history has been. It gives them a picture of whether or not you pay your bills and if you pay them timely.

A credit score can be any number from 300 to 850. The higher the number, the better your score. If your credit score is 800 – 850, it is excellent and if it is 749 – 700, it is really good. If it is 670 – 739, it is good and if it is 580 – 669, it is just ok. Anything below 579 is bad, or poor credit.

What Should I Do If I Have Bad Credit?

It is really hard to maintain exceptional credit. It is much easier than you realize for your credit score to drop. For example, it only takes some late or missed payments for the numbers to decrease. Unfortunately, it is much harder to increase your credit score than it is for it to decrease. It is not impossible, but it takes hard and consistent work. There are some things you can do to help yourself immediately. First, check your credit record and make sure that all the information listed is accurate.

If there is any wrong information, you must fix it immediately. You should begin to pay off as much of your debt as you can. You could also consider having a co-signer on your loan. Since personal loans are unsecured, there are no guarantees to the lender that you pay the loan. If you have a co-signer, that person promises to the bank that you will pay the loan. If you do not pay the loan, your co-signer is then responsible for paying it. There are some lenders that are willing to give you a personal loan proof of income submitted.

How Do I Know If A Personal Loan is Right for Me?

You are the only one who can decide this for you. No one else can make this decision for you. There are some things to consider before you decide if you want to apply for a personal loan. The most important thing to determine is can you repay the loan? Do you have enough extra money every month to pay  the loan amount? If the answer is no, stop here.

A personal loan is not right for you. Obtaining a loan that you cannot pay back only puts you in a worse financial position. You must remember that while you get one lump sum from the lender, you still must pay it back. If you are not sure if you have enough money to pay back the loan, you can use a loan calculator.

A loan calculator helps you determine how much you can pay. You enter how much money you earn in income per month. Then you enter in all your debts and expenses. The calculator determines how much money you have at the end of each month to pay back a loan. If you do not have enough money to cover the loan, stop again. Do not proceed with the loan. Missing payments or making late payments decreases your credit score and puts you in a worse place.

Can I Get a Personal Loan Online?

In short, yes, you can get a personal loan online. There are some things of which you should be aware when considering a loan online. There are some online lenders that are not reputable and are looking for people to scam. They probably figure that people who are in a desperate situation are the easiest to scam. Be careful of online lenders. Make sure that you do your homework when searching for an online lender. Make sure you know everything you can about them. An upside to online lenders is a quick turnaround time.

You usually get a decision in 24 hours and then the money is in your bank account in less than 24 hours. They still require personal loan proof of income. However, online lenders save you from having to go into a bank and wait for someone to be available. The application process tends to take less time because they are shorter to fill out. Be aware that there is a down side to online lenders. Typically, the interest rate with an online lender is higher than many other lenders. Usually online lenders cater to individuals that have less than perfect credit.

What Fees Are Associated with Personal Loans?

5 Personal Loan Fees to Know: Borrow Smarter

There are always fees associated with personal loans. Before you sign the contract for a loan, be sure to read the fine print and understand what you are getting yourself into. Keep in mind no matter what type of loan you obtain, you must provide personal loan proof of income. Some of the fees you can expect when it comes to a loan are application fees.

This fee covers the cost of fees for running your credit. These fees typically are nominal but if you have more than one application, the fees add up quickly. If you are not approved for the loan, you do not get that money back. If you can, find a lender that does not charge an application fee.

Administrative fees cover the cost of processing the application for your loan. There are lenders that do not charge administrative fees, so you should find one. Another fee that you should be aware of is an origination fee. This fee combines application and administration fees together in one sum. It usually adds in a fee that is subtracted from the payout amount.

This way, you do not have to pay a separate fee out of your pocket. Some lenders have a prepayment penalty. This means that if you pay off your loan early, you have to pay a fee. Many lenders do not have this fee, so be sure to research any fees that your lender has with your loan. No matter what type of fees the lender has, you still must provide personal loan proof of income.


When you find yourself in a position when you need a loan because you are facing some type of financial hardship, you must consider some things. First, you must always have your paperwork in order and be ready to present personal loan proof of income. Then you must consider if a personal loan is really right for you. If you are not able to pay back the loan, you should not obtain a loan. You put yourself in a worse financial position if you do not pay back your loan. Missing or making late payments decreases your credit score.

There are some things you should do if your credit is bad. You should pay off as much of your debt as you can to increase your credit score. One way to be able to pay off your debt is to create a budget for yourself. When you create a budget, you can remove all of your unnecessary expenses.

Once you list out all of your expenses, you can see what items you paying for that you no longer need. If you have gym membership that you have not used in a year, cancel it. You have magazines or subscriptions that you no longer use, cancel them. Once you create a budget for yourself, be sure to stick to it. The best way for you to be debt free is to work hard at reducing your debt and improving your debt to income ratio.

When looking for a lender, read all of the fine print so you know exactly what you are getting with your loan. Make sure you know about the fees that the lender charges before signing a contract. Make sure you know all the documents you have to provide to the lender, including personal loan proof of income. If you opt for an online lender, make sure it is a reputable one and not someone looking to scam you during an already stressful time.

Check your credit score and get your credit report. This empowers you to know the data with which the lenders are using. When you have this information, it can help you make better decisions about your loan options. Maybe you will decide now is not the best time to obtain a loan. Maybe you will decide to pay off more of your debt. No matter what you choose, make sure it is the best option for you and will not hurt you in the long run.


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.


What Information Does a Personal Loan Lender Require to Apply?

There are all sorts of reasons you might be considering taking out a personal loan. Maybe you’re trying to consolidate miscellaneous debts into a single monthly payment, or pay off high-interest credit cards. It could be that you’re finally getting around to that bathroom or kitchen remodel at home and need some cash up front for supplies or additional labor.

Maybe it’s that RV you’ve had your eye on, or that trip to Europe, or that wedding you worried might never happen! Sometimes it’s less pleasant – medical bills, funeral expenses, or a major move you didn’t anticipate. Having said that, when you apply there will be personal loan lender requirements. Keep reading to learn what you will need to get a loan.

Whatever the need, personal installment loans are a popular and straightforward way to access the resources you need. They don’t generally require collateral, and you can often get your personal loan online, saving yourself both time and headache. Before you start, however, you might want to start gathering a few things together to help smooth the process. To do that, it helps to be aware of the most common personal loan lender requirements.

What Documents Do You Need When Applying For a Personal Loan?

Most lenders are going to want the same basic information to get things started, although specific personal loan lender requirements may vary from lender to lender or with the terms of the loan. Don’t panic if they ask for something you don’t have in front of you or aren’t sure how to get. Just be as prepared as you can and provide as much information as you have. If they simply must have something specific that you didn’t anticipate, you and they will figure something out. Remember, they want you to get the loan and become their customer – they’re on your side!

The first thing a lender wants to confirm is that you’re who you say you are

Proof of identity can be one of the easiest things to forget about because we don’t really think about it very much. Most of us know who we are, at least in terms of our names, date-of-birth, and such; we forget how important it is to be able to establish those things with others.

The most obvious forms of identification are things like…
  • Driver’s License
  • Passport
  • Social Security Card.
  • Military ID
  • Official State ID

The key is that it something official, with your full name and usually a photo of your wonderfully trustworthy face. They’ll also want your Social Security Number, even if they don’t require the actual card. Keep in mind that lenders aren’t just looking to verify your name, although that’s pretty important. They want to confirm that you’re at least 18 years old and either a U.S. citizen or a legal resident. These are all normal personal loan lender requirements, but fortunately none of them are difficult to prepare for.

The next step is usually checking your credit score

You don’t have to provide this; they’ll be able to pull it up pretty easily. There’s no reason you shouldn’t know your credit score going in, however. It’s easy enough to find out and knowing will help you be better prepared. The better your score, the easier it will be to get the best interest rate or other favorable terms, of course, but a low credit score doesn’t automatically mean you won’t be able to find a personal loan you’re happy with. Your credit score matters, but it’s only one of several factors used to determine the specifics of your personal loan. Remember that most lenders want to loan you money – that’s how they stay in business.

What Do Personal Loan Lenders Look At On Your Credit Report?

The most obvious thing lenders are looking for on your credit report is whether or not you have a good history of making payments on your credit cards, car payments, previous personal loans, etc. Be prepared to address any periods of inconsistency. Be honest, and be ready to offer legitimate reasons why you don’t anticipate similar difficulties this time. It can take years for your credit score to recover after a rough patch, but every on-time payment you make, big or small, adds to your record of reliability now. This can be one of the personal loan lender requirements borrowers find most intimidating, but remember, it’s not personal. The lender just wants to better understand how things work in your world so they know what to expect.

Then They Look at What Type of Debt You’ve Incurred In the Past

Car loans and mortgages are nearly universal in this day and age. Nearly everyone has experience with this sort of debt; it’s normal and responsible, even if there’ve been a few late payments here and there. Credit cards are slightly less essential, but still an important part of modern life for most of us. If you’ve managed a reasonable number of cards without severe difficulty over the years, that speaks to your reliability with the loan you’re currently seeking. Multiple large loans for vacations or non-essential big-ticket items might raise an eyebrow, especially if your record of repayment has been inconsistent. Borrowing money actually helps build a good credit rating, but only if you pay attention and make timely payments, even on the little things.

credit report lender review

What’s your current outstanding debt? This one will be compared to your current income. In short, lenders want to make sure the math makes sense – that you can reasonably repay this new loan along with your existing obligations at your current level of income. If there’s any reason those numbers won’t look right at first glance, be prepared to justify extending yourself further, and have documentation to back it up. Some lenders have very specific personal loan lender requirements, while others allow their agents a degree of flexibility to use their best judgment, so keep things positive and professional. It can’t hurt, and it might improve your odds.

They Will Also Look at Your Lines of Credit

Have you opened up new lines of credit recently, or have there been multiple inquiries to your credit report in the past few weeks or months? If so, presumably you have a good reason for all this activity right before you’re seeking an unsecured personal loan. If you don’t, this might not be the best timing. Lenders want to work with you, but they’re interested in genuine clients with every intention of repaying their loans. Too much activity creates the impression you might not be that wonderful, sincere person you and I both know you are.

Do Personal Loans Require Proof of Income?

Naturally, income verification is pretty-much a non-negotiable when it comes to personal loan lender requirements. Lenders must determine what sort of monthly payments you can reasonably be expected to make. How they do this will vary widely, but you should be prepared to tell them as accurately as possible where you work and what you do, how much you make, and how long you’ve been there. They’ll also want to have a pretty good idea of how much money you currently owe on your house, car, credit cards, etc.

You may find yourself simply entering numbers on a form, or the lender may ask for proof for some or all of the items included. Common paperwork you should have with you might include:

  • Recent Bank Statements
  • Pay Stubs
  • Tax Returns or W-2s
  • Mortgage Paperwork or Verification of your House Payment or Monthly Rent
  • Recent Statements for Car Loans or other Installment Plans
  • Student Loan Information

If you’ve changed jobs recently or moved more than once in the past few years, be prepared to address this upfront. When my wife and I moved to another state a few years ago, I learned very quickly to volunteer relevant information when applying for jobs or setting up finances. Why yes, we moved in only recently – we’re still unpacking boxes! It’s been an experience, though, especially since we were in our previous home for over fifteen years and we’re not used to this! Here are some recent places I’ve worked. I was at my previous job for nearly a decade and I’m determined to find something equally permanent here.

Don’t Exaggerate or Distort Just Because There may be Uncomfortable Topics Along the Way

Just think through issues that might come up and how you’ll address them if they do. You might also want to use an online personal loan calculator to get an idea going in of what sort of monthly payments make sense for you. You may not be able to control everything wrapped up in personal loan lender requirements, but you can arrive prepared and informed.

What Other Information Do You Need To Get A Personal Loan?

Personal loan lender requirements will almost certainly include proof of where you live – and probably where you lived before that. Obviously it’s better if you haven’t been bouncing from place to place every few months, but whatever your reality, sit down and gather dates and addresses ahead of time. I confess that I’ve embarrassed myself a number of times trying to remember what year we moved in together or the name of the apartment complex we lived in when my kids were born. I’m sure you’ll do much better than I did. Please.

Paperwork to help verify your address(es) may include:

  • Utility Bills
  • Lease Agreements
  • Voter Registration Cards or Forms
  • Insurance Statements
  • Change of Address Confirmation from USPS

What Do I Need To Know Before I Apply For A Personal Loan?

So far, we’ve focused primarily on personal loan lender requirements – the types of information you should be ready to share with potential lenders. They’re not the only ones we want to be happy, however; you’re part of this equation as well. What are some things you should be thinking about before getting a personal loan to ensure you’re satisfied before you commit?

You’ve no doubt anticipated paying interest on the amount you borrow, but most personal loans involve miscellaneous fees or charges as well. These don’t have to be a problem if you know to look for them ahead of time.

Late fees are the most obvious example of additional charges. Most credit cards utilize these, and maybe you’ve encountered them with other lines of credit as well. Keep in mind that in addition to whatever additional interest you may incur by missing a payment, late fees can add up quickly and impact your future credit rating as well.

Some loans charge a penalty for paying them off too early (thus limiting the amount of interest they’re able to earn from having loaned you the money, to begin with). Others are happy to have you pay additional amounts on the principal each month or even to pay the loan in full well-ahead of what was scheduled. Ask about this before finalizing any arrangements. As with any contract of any kind, read the terms!

Origination Fee

Finally, most personal installment loans require some sort of origination fee to cover the paperwork and manpower involved in getting the loan set up and started. They’re not usually excessive, but you should be aware of them before finalizing them. If you’re asked to pay a fee upfront which seems unreasonable, or there are percentages or other terms woven into the small print which don’t make sense to you, ask for clarification. Legitimate lenders will have clear, easily-communicated personal loan lender requirements; they want you to understand both the benefits and responsibilities of what you’re getting into.

If you’re not happy with the process, trust your gut – that feeling could be a red flag. Legitimate lenders want to cover their costs and make a reasonable profit, but they benefit when you end up happy with the entire experience and successfully pay back the loan over time. Predatory lenders seek to exploit people in need and trap them into impossible financial situations by overpromising and under-communicating. They’re not looking for long-term relationships; they’re looking for an easy score.

The best way to avoid scam artists or questionable financing is to begin your search with known, reliable sources.

Where Can I Find The Best Personal Loans?

If you have a good relationship with your local bank already, that’s a great place to start. As unsecured loans, personal loans generally assume you have pretty good credit and a track record with the specific institution from which you’re borrowing.

If you’re a member of a local credit union, you may find it easier to get a loan on good terms even without spotless credit. Why is that? It all comes down to the differences between banks and credit unions. Jim Cramer’s explains it this way:

The bottom line is that banks are for-profit institutions, while credit unions are non-profit. Credit unions typically brag better customer service and lower fees, but have higher interest rates. On the contrary, banks generally have lower interest rates and higher fees. Banks, on the other hand, often have higher fees but more convenience regarding location, technological efficiency, mobile access, and rewards programs.

Another option with which far too many people aren’t familiar is to consult a marketplace lender. What is that, exactly? Marketplace lending is a service-driven loan industry, usually based online, which competes for your business. There are a number of reliable online marketplace lenders who can get you your money relatively quickly and who are able to be flexible with your credit history. Unfortunately, just like you’ve probably noticed that sketchy “payday loans” place a few blocks down from your local credit union, there are some untrustworthy players on the web as well.

That brings us to a rather important element of this discussion – how, exactly, do I find these legit lenders? Should I just Google “get personal loans online” and hope for the best?

Here we are!

That’s where we come in. We help you loan shop by flipping the traditional dynamic associated with getting a personal loan. There’s no reason you should feel overwhelmed and alone, confused by the system, and desperate for options. What you really are is a client, who has the power to choose from numerous marketplace lenders who compete for your business by putting together their best solutions and hoping you’ll consider giving them your business.

What are we selling you? Nothing – nothing at all. Loanry gathers some basic information and offers a few tools to help better determine your needs, then connects you with a participating lender to secure a solution both of you decide is best. We don’t charge you any fees or take any payments from you. Period. Once you’ve found a lender that meets your needs, the rest is between you and them.

How To Qualify For A Personal Loan

If you have some flexibility with when you apply for a personal loan, you may consider doing some things ahead of time to improve your chances of qualifying for a personal loan and getting the best terms possible from the lender you choose. I know, I know – some of you are thinking that if you had that kind of time and money you wouldn’t be online right now scouting information on personal loan options! Whatever your circumstances at the moment, take a slow, deep breath and just stay with me for a few more moments while we look at some simple things almost anyone can do to improve their credit situation. I promise, it’s not as bad as it might sound.

First, look up your credit score. We talked about these above while covering the variety of personal loan lender requirements, remember? You probably know there are three primary credit reporting agencies which are used by just about everyone – Equifax, Experian, and Transunion. You may not know that while they have much in common, they each compute your credit score slightly differently. In general, though, your score falls into one of five categories:

  • Anything between 800 – 850 is considered “excellent.”
  • Scores from 740 – 799 are “very good.”
  • A score between 670 – 739 is still “good.”
  • 580 – 669 counts as “fair.”
  • And anything below 579 means, well… that things haven’t always gone as well as you’d have liked.

Poor Credit By The Numbers

If you discover you’re in that lowest category, you’re not alone. Nearly 1 in 5 Americans had a “poor” credit score in 2018 (although that percentage has gradually been falling as more and more people learn how to take better control of their credit ratings).

Whatever your credit score, it improves as you make payments on time. Big payments, little payments, car payments, credit card payments – the key is consistency. If you have a year before you need a personal loan, start paying attention to those due dates now. But even a few months of on-time payments help to start nudging those numbers in the right direction.

Should I get a co-signer?

Another option to consider is getting a co-signer. A co-signer is a friend or family member with a more established credit record who agrees to “back you up” on your personal loan. They must meet the same personal loan lender requirements, and they’re agreeing to make the payments if you don’t, so this is not something to take lightly. Money isn’t everything, but it does have the power to strain friendships or create family tension. Make sure both of you are clear on the specifics and comfortable with the arrangement before pursuing this option.

That said, a co-signer can help you not only get the loan, but may help you get a better interest rate. As you make your payments, your credit rating goes up just as if you were the only person on the loan. If you don’t, however, it will hurt your co-signer’s credit rating, which may not go over very well. The solution? Make your payments!

There are simply no quick and easy answers to building or rebuilding good credit, but it’s quite doable no matter where you are now. Even negative events like bankruptcy or accounts marked “non-collectible” are eventually will fall off your report. What’s left is your more recent behavior. So don’t get discouraged – get started!

If I Apply For A Personal Loan, Do I Have To Accept It?

No. Until the lender has agreed and you’ve signed, there’s no loan.

It’s possible you’ll still have to pay personal loan fees, depending on how far the process has gone. As with anything related to your loan, read the terms carefully as you go.

You can get more information and begin the search for the right marketplace lender for you right now if you’re ready. Or you can Contact Us for more information. Whatever your circumstances, you got this – and we can help.

Guide To Personal Loans



Personal Loan Companies Near Me: Locals Only

Rather then heading to a walk-in local store front, you can loan shop online 24/7. Click here to find a personal loan company anytime. The best way to receive cash right in your bank account as soon as tomorrow.

Personal Loan Companies Near Me – But Where?

In this day and age, one of the best (or the worst, depends on who you ask) things is that everything is at our fingertips. And we now get all the information we need within seconds. So, if you’re wondering where you can find a personal loan company near you, the answer would be – HERE – online. This is the closest you can get, and it’s the fastest loan process you can find. The most important thing is to choose a reputable lender.

A personal loan is money borrowed from a credit union, traditional bank, or online lender that you will need to pay back in a fixed number of months, sometimes called personal installment loans. Depending on the amount and the terms of the loan, the repayment schedule would typically expand 12 months to five years.

Types of Loans You Can Get

The APR will also largely vary from creditor to creditor. Most of them ranging from 7% to 35% APR. Most of these personal loans are unsecured — that means that they do not require any sort of collateral. Before shopping for personal loan companies near me, it’s important to understand the several types of personal loans.

Unsecured Personal Loan Companies Near Me

As mentioned, an unsecured personal loan isn’t backed by collateral. The approval and the rates that you will get from this type of personal loan will largely depend on your credit score. Which quantifies your online payments, credit limits, utilization, and the number of open and closed accounts. Regardless of your credit score, you will most likely obtain a personal loan that has an APR rate between 5 and 35%.

Secured Personal Loan Companies Near Me

Unlike an unsecured personal loan, this one will require a type of collateral that will be seized by the lender if you default on your payments. A mortgage, for example, is a type of personal loan. If you fail to make payments for it, then your home will be seized. Credit unions and traditional banks both offer secured personal loans. Those will be borrowed against your car, property, or other tangible assets. Thankfully, the interest rates of a secured loan are much lower than an unsecured loan.

Fixed-rate Personal Loan Companies Near Me

Most personal loans have a fixed rate. — That means the interest rates will stay the same regardless of the age of the loan or how much you owe. They are ideal if you want to make consistent, and constant payments and you are anxious about rising rates. Fixed rate personal loans are easier to budget into your monthly budget. As you do not need to worry about your payments suddenly changing in the middle of your installed.

Variable-rate Personal Loan Companies Near Me

Unlike a fixed-rate loan, the rate is set by the banks and they can go up and down on a monthly basis. This means the cost of your loan can increase or decrease on a whim’s notice. While you might have difficulty conceptualizing the benefits of such a loan, they typically carry lower APR’s. It’s worth mentioning that your APR won’t be so volatile, with a cap that will prevent your rates from increasing beyond a certain limit.

Cosign Personal Loan Companies Near Me

This is a type of loans that require two or more people. If the person has no credit history or less than ideal credit scores, then a cosign personal loan can be a benefit. A cosigner promises to repay the loan if the person who took out the loan fails to make payments. Adding a person that has good credit improve the terms of your personal loan as well.

A Personal Line of Credit

A personal line of credit is actually different than a personal loan — the personal line of credit is revolving, almost like a traditional credit card. Rather than getting a lump sum of money, you will be able to tap into this credit line on a needed basis, paying interest on what you borrow. Usually, a personal line of credit is only good for when you need to borrow for an ongoing expense or for emergencies.

Unless you qualified for a balance transfer credit card, a personal loan is typically very ideal for most forms of purchases, regardless if you’re using the fund for personal or business reasons. Personal loans are just that — one of the main benefits is that you can use a personal loan for any reason you see fit, as long as you are paying it back on a timely basis.

Personal Loans to Consolidate Debt – Great Option

Many people actually use favorable terms of personal loans to help consolidate debt into one payment. For example, if you have several cards that have a very high APR and you’re struggling to make payments, then a personal loan with a lower APR rate can help reign in your finances.

Regardless of the type of personal loan, they are usually superior to other types of loans. For example, payday loans are notorious for their high-interest rates and shady practices. Rather than installments, these loans aggressively pursue borrowers to ensure that they repay the loan completely by the next payday. These payday loans are high interest, with their legality currently in question.

When working with personal loan companies near me, your credit score will take a small initial dip. This is due to the hard inquiry, which will lower your credit scores by just a couple of point. The hard pull will stay in your credit history for about two years. So when you are shopping for a personal loan, it is important that you do it right the first time since applying can affect your score for several years. When shopping for a personal loan, make sure that it is from a reputable company.

When to Use a Personal Loan: Personal Loan Companies Near Me

There are several advantages when you are able to work with personal loan companies near me. You can use the loan different ways including:

  • Debt consolidation, financing home renovations, and projects
  • Financing funeral expenses
  • Medical bills
  • Dream vacation
  • Comfortably accommodate a large purchase

While there are many reasons why you might be comfortable on-boarding a personal loan, you will need to make sure that you have the capacity to pay it back. Remember that you are going to repay back the original loan plus interest. Once you repay the personal loan, you will notice that your credit score will increase substantially. This is due to the fact that you have demonstrated that you can be trusted with a personal loan and have fulfilled your commitments to the creditor and lender.

Benefits of a Personal Loan

There are several advantages with a personal loan, especially when you start to compare it to other financial products like a credit card. Here are some of the benefits of a personal:

Fixed interest rates

As mentioned, there are many different types of personal loan, with varying APR’s and interest-rates. However, most personal loans have a fixed rate, and that means that the payments will also be fixed. Once you apply and are approved for a personal loan, then you will be given a lump sum allowing you to pay it back over a fixed term. Since everything is fixed, including the interest rates, how much you will be paying every month, and even the term limits, — then it is very easy to accommodate a personal loan into your monthly expenses.

With a personal loan, you are sticking to a monthly budget. For those who have a fixed income, a personal loan is a better option because installments stay static. You don’t have to worry if you have enough money to make minimum payments that you would with other types of credit.

Lower interest rates

So many consumers are so focused on obtaining the right amount of money from credit unions and traditional banks that they sometimes overlook APR interest rate. The interest rates of a personal loan are typically far lower than a credit card, lending for its affordability. Who wants to pay a credit card that has an APR attached to it that is north of 20%? A personal loan is a viable financial product if you need a lump sum right away and you can afford to make the payments over time. Interest rates are lower than a credit card, payday loan, and personal lines of credit.

Eventually, it will help you build credit 

As mentioned, when you apply for a personal loan, your credit score will take a hit. This is a hard pull that will eventually fall off. However, during the life of the loan and its conclusion, your credit score will increase substantially.

10% of your credit score stems from something called the credit mix — this represents a mixture of different types of credits that you have obtained. The credit mix includes mortgage loans, car loans, credit card, and other financial products that report to the three credit bureaus. You can raise your credit score by making sure that you make on-time payments and ensure that your credit utilization stays below 30%. However, you can also improve your credit score by on-boarding a personal loan.

By adding this type of loan, you improve your credit mix and raise your score. While most creditors do not put too much focus on your recent hard pulls and hard inquiries, some financial institutions may sway away from a person who has too many inquiries. Too many inquiries show that the person is continuously shopping for a financial product, signaling that the may not be able to manage their own income. If you’re going to apply for a mortgage within the next two years, then you might want to stay away from a personal loan since the hard inquiry will stay in your report for the next 24 months.

Paying for a planned expense

Regardless of your credit score, many credit cards have a high interest rate, especially after the low-interest introductory ends. If you know that you are going to need extra funds in the near future, like paying for renovations or taking a trip, then a personal loan might be beneficial, especially if your other debts are under control.

Many people actually take out credit cards and seldom use them, with the sole purpose of the credit card to help raise your credit scores. Once their credit score is high enough, then they will not use the credit cards with the high-interest rate, instead being very purposeful with personal loans.

Refinance high interest

Another way you can strategically use a personal loan is to pay off high-interest debt, allowing you to solely focus on paying your personal loan. This is also mentally freeing. Instead of logging in from credit card to credit card, seeing the outrageous numbers that you have to pay back, your personal loans will wipe all of the debt away.

No longer do you need to log on to these credit cards and feel down. Now you just have to log into one site and pay off the lender who gave you the personal loan. With less money going to interest rate every month, you’ll make faster progress to financial freedom.

Being able to see the finish line

Another benefit of a personal loan is that you’re able to know exactly when you will pay off  your personal loan. With other types of high interest that, you never really know when you will pay it off completely, especially if it has variable interest rates. A personal loan to pay off debt is a common way to successfully handle a part of your financial situation.

If you’re curious as to how a personal loan can be a benefit and how it can consolidate your other debt, then online calculators can help you visualize the overall cost of a personal.

If you are looking for personal installment loans near me, then you can find a lender using the service. We will be able to connect you with potential lenders who are willing to work with your history while still being cognizant of your budget.

Guide To Personal Loans

The Loanry Advantage: Shop Personal Loans Near Me

Loanry will help you shop personal loans near me over the internet by helping you find with personal loan companies near me. Loanry provides a resource to consumers, by helping consumers find a lender as well as provide you daily updates to their personal finance education library. The Loanry Store policy is to do right by the consumer first and always.


How Does A Personal Loan Work? Loans 101

Sometimes there are events, services, and unexpected expenses that arise. When they arise, we must consider whether we have the funds to make the purchase or if we need to consider a loan. One of the options available for funds during these scenarios includes a personal loan. Before you take on a personal loan, however, it is essential to know how does a personal loan work. Also, have a look at what is needed for requirements and where to find them.

What Is a Personal Loan?

Simply put, a personal loan refers to borrowed money from a bank, credit union, financial lender, or online financial company. Anytime a person takes out a loan for an expense, it is considered a personal loan. Personal loans have the ability to come in any amount from as little as $500 to $20,000. It depends on the institution, personal credit score, income, and other necessities for acquiring a loan.

Personal loans also have the ability to come in a variety of interest rates. Those can be as versatile as the amount that is being requested. Like the amount, the interest rate is based on the different factors of a person’s financial history and criteria. In order to know how does a personal loan work, that person must have a thorough understanding of their personal finances. Understanding thing before you get a personal loan is necessary.

What Types of Personal Loans Are There?

A personal loan has the ability to be for almost any expense you can think of. Below are some of the most common types of personal loans:

  • Loan for Medical expenses
  • Wedding loan for a ceremony and the reception
  • Vacation loans for your get away planning
  • Debt Consolidations
  • Home improvement projects
  • Eliminating credit card debt
  • Paying off a higher interest personal loan
  • Purchasing a boat, RV loan, or ATV

These are some of the most popular reasons that someone is seeking out a personal loan. Any additional expense or extra purchase you would like to make often comes with the need for personal installment loans. At least in order to conveniently afford the expense. Some of these personal loans are emergency and happen on a whim. In the meantime, others are planned and budgeted for by the person and their monthly budget.

The smaller personal loans refer to things like an unexpected bill or medical bills. On the other hand the larger personal loans are for planning weddings and making purchases of recreational vehicles. No matter what your need or may want, it is a reason for a personal loan.

Secured Personal Loans vs. Unsecured Personal Loans

A personal loan is approved on the condition of secured personal loans vs unsecured personal loans.

Secured Personal Loans

When someone asks how does a personal loan work that is secured, the answer is simply collateral. Collateral refers to the person giving temporary ownership of their property to a lender in order for them to secure the loan. It then provides them the funds needed. Should you not make the agreed upon payments, the collateral that you used to secure your loan will become the property of the lender. Indeed, they will take ownership. Once they secure the property that they now own, they will give you many days to pay your obligation to them before they permanently take ownership of the property. This way, they give you a final chance to regain what is yours.

A benefit to a secured personal loan is that because the lender is securing property for the loan, they often offer lower interest rates for their loans. It makes repayment for the loan much easier than it is with those that are unsecured.

Unsecured Personal Loans

If someone is approved for an unsecured personal loan, they should know how does a personal loan work in this format. When approved for an unsecured personal loan, the lender offers the loan strictly on past credit history. He finds it sufficient enough of the applicant to not require collateral. It’s often explained as their risk rate for not paying back the loan is low.

Unfortunately, some lenders take this to their advantage when the applicant is planning to shop personal loans. They decide to raise the interest on the loan, making repayment and monthly payments higher for the applicant. For some applicants, this can make the payment extend beyond their monthly budget. It then eliminates the option for a personal loan at that time.

What Can I Use As Collateral For A Personal Loan?

If you are considering taking on a secured personal loan, you should know what is the best type of property to use for securing the loan. Below are the different types of property that are available to most applicants that can be used:

  • Paid Off Vehicle
  • Television
  • Computer
  • Ipad or Tablet
  • Printer
  • Cell Phone
  • ATV
  • Boat
  • RV
  • Jewelry

Above are the most common types of property used to secure personal loans on a daily basis. Before using your property to secure a loan, understand how does a personal loan work when it is secured. Then figure out which you should offer for your personal loan.

If you are planning to obtain a small secured personal loan, you do not need to use your vehicle as collateral. Do not risk a valuable investment for a loan that you could potentially get behind on and find yourself forfeiting property. For small loans, consider things like jewelry, televisions, and printers. Small collateral items that you could part with if you needed to is what you need to consider for the smaller loans.

For larger loans that require securing, which is anything at $5,000 or above, you can then consider your recreational toys. This includes your ATV, boat, or even your vehicle if the amount substantiates the property amount. For each loan amount in a secured loan, your lender will have a set value they are trying to acquire, and they will evaluate your property to determine what will work as collateral.

Where Can I Get A Personal Loan?

When you are looking to loan shop, consider the following for a personal loan.

  • Banks/Credit unions
  • Local Financial Lenders
  • Title Loan companies
  • Pawn Shops
  • Online Lenders

Banks/Credit Unions

With banks and credit unions offering the best options for personal loans, those with the best credit should seek out these institutions only. If your income is solid and your credit score qualifies as good, it is time to apply at the bank.

Local Financial Lenders

For those will less than good credit, but it is fair, you should consider the local financial institutions found in your community. They may require your personal loan be secured with collateral coverage, but the interest rates will be only a little higher than the bank or credit union.

Title Loan Companies

If you have bad credit and require a small personal loan for an unexpected expense, you can consider the title loan companies that require your vehicle title for collateral or the local pawn shop that will hold your property while you pay back your loan. These loans are some of the last resort options that should be considered only in the case of a financial emergency.

Online Lenders

Finally, you have the ability to search for lenders online. By using a lending service finder tool, you are able to seek out lenders based upon your credit score and income. With this tool,  you only have to provide minimal information and you are met with options that range in loan amounts, loan terms, and loan interest rates. For those with fair credit, there are online lenders available that have comparable loan terms and interest to the local bank or credit union. However, there are also lenders online who take advantage of those with bad credit, and offer unsecured loans at interest rates that are almost impossible to repay. Because of this, it is important to understand why you should use the lender service finder tool and evaluate the lending options you have available.

Loanry is the right place to look for credible lenders. Our partner Fiona selected lenders for you to consider, and if you fill out the form below, you can get offers in a matter of seconds.

Who Else Is Using Personal Loans?

When you are checking into personal loans and learning how does a personal loans work, you may find yourself surprised at the number of people who are using personal loans in this day and time. Statistics regarding personal loans determine that 1 out of 5 people today have an active personal loan. Or at least had one in recent years that has now been paid off. What this information provides is that it is a common practice that some may have once frowned upon but are now in need of these loans themselves. Whether someone has a high credit score or falling below fair for a score, there is a growing need for these personal loans.

More and more, lenders are approving loans for things that they would not have done half a century ago. For instance, it includes weddings or vacations. Personal loans allow these two events to be more attainable than past generations and lending practices. Lenders are also finding themselves filled with applications for personal loans to pay outstanding medical bills. Especially due to the rise in health care prices and practices as the generations change.

Guide To Personal Loans

What Is The Required Credit Score?

When learning about how does a personal loan work, applicants find that the credit score has an impact on the approval process of a personal loan. Depending on the financial institution in which the applicant is applying, the required credit score can vary.

Banks/Credit Unions

Obtaining a personal loan from a bank or credit union is usually reserved for those with the best of credit scores. Those whose credit score reaches 750 or higher find themselves applying for personal loans through these institutions. Their credit score will not only land them the amount in which they desire. Indeed, they will also be provided with an interest rate that is much smaller than any other institution will offer them.

Local Financial Lenders/ Pawn Shops

The smaller finance companies and pawn shops in the areas are available for the citizens who do not have a lavish credit score. For those with fair or bad credit, their options are limited to the institutions that offer both secured personal loans and also high interest personal loans. For the pawn shops, expect both a high interest rate on your loan as well as securing it with property. The personal loan finance companies who require collateral for their loans will have a smaller interest rate than the pawn shops.

Online Lenders

Many online lenders offer loans based upon the credit score. Since the interaction between applicant and lender is strictly online, many of these loans are offered as unsecured loans to the applicants. In other words, it requires no collateral. However, they are allowed to charge a much higher interest rate. This one is however depending on the state and what is allowed legally. Many of these loans find themselves with interest rates well over 100%. Coming with high monthly payments for those that are borrowing the money and often repaying the loan in a short time frame.

Is There An Income Requirement?

Like the credit score, the income amount is important for applicants when learning how does a personal loans work and what is required for approval. Debt to income ratio or an overall income total is reviewed by these lenders. The aim is to determine if you have the ability to repay the loan. This is very important to top tier lenders such as banks and credit unions that offer the best personal loan packages in the lending world.

As you work your way down the levels of financial lenders, income becomes essential to just prove it. The debt to income ratio is no longer as important as it was with a prior lender. Essentially, all you need by the time you are seeking online lenders or local financial institutions in your hometown is just current pay stubs proving that you have a solid income. The aim is more about proving that you make enough money to cover the minimum payment. It is important to keep in mind that these lenders are not considering any additional monthly responsibilities you may have. They will treat your loan as though it is the highest priority in your monthly budget.

Should I Expect Additional Fees?

Depending on the lender that you are using, additional fees on a personal loan can come in the following:

  • Application Fee
  • Early Payoff Penalty Fee

These fees have been known to be present in personal loans for those with bad credit. All personal loans, whether they are with the bank or credit union or an online lender, will have a late payment fee applied to the terms of the agreement and that is only fair. However, fees such as an application fee are not always associated with a personal loan. They are however something to heavily consider when applying for your personal loan. Also, consider the other fees such as a penalty fee for early payoffs. Most financial institutions encourage early pay off because it is financially responsible.

However, some lenders want every dollar agreed upon in your lending agreement. Then this fee is used to make up some of the interest lost if you pay off early. Some lenders also view this as breaking a contract and treating it like a lease contract. In this case you are considered leaving the agreement before it is over. Be sure that these lenders should be last resort lenders.

What Can I Really Afford?

Taking on a personal loan payment is no small feat for those who are living life on a budget. While you may have an idea of what you want in a personal loan, it is important to know what you can actually afford. Then you have to make sure the loan is something that is financially achievable. Learn how does a personal loan work and use that to your budgeting advantage when deciding on your personal loan and the reasons for the loan.

What’s My Budget?

Before you apply for a loan, review your current monthly budget obligations against your income amount. Consider the following payment obligations:

  • Rent/Mortgage
  • Car payment
  • Car Insurance
  • Electric
  • Water
  • Gas
  • Cable
  • Cell Phone
  • Internet
  • Childcare (if necessary)

Do you have enough money left over now that you can make that payment monthly? Will you be able to survive on the remaining amount? This is what is known as the debt to income ratio. Applicants use it in order to accurately determine how much of a loan they can afford monthly. Review the last three months of your bills and the income that you generated. Determine the amount that you have to the plus. Then determine exactly how much you need for weekly survival. This is the money you need for food, automobile gas, and household necessities. Whatever is extra is what you can afford for a monthly payment towards a personal loan.

How Much Do I Need?

Just because you may be pre-approved for a larger loan amount, this does not mean that you need to take all of the loan available. Determine exactly how much money is needed to cover the cost and do not take additional money beyond that point. Not only do you have to pay back that extra amount. The monthly interest accrued on your outstanding balance will be more monthly because you borrowed more money. It is not a smart idea to take more money than you need for a loan, even if it is something as flexible as a wedding cost. Even then, you need to construct a budget and stick to that amount during planning so that you can maintain financial stability and pay for the event or expenses that you desire.

How Can A Personal Loan Help My Debt?

Now that you know how does a personal loans work, there is room for debt assistance with a personal loan. If you currently have an outstanding debt that is accumulating at a higher interest rate than what you were approved for with your personal loan, you can use this money to pay off the existing debt, and pay back the personal loan. This will allow you to save hundreds of dollars in interest monthly, and build your credit score. This works the same for credit card consolidation or overall debt consolidation that allows you to combine all of your monthly payments into one payment, saving you money each month on expenses and bills.

How Can A Personal Loan Hurt Me Financially?

While the leading lenders such as banks and credit unions review your debt to income ratio, other lenders do not have the same regard for your financial security. Because of this, they may offer you a loan that you can not financially afford, leaving you with high monthly payments and your debt continues to grow by the hundreds in interest. If you irresponsibly take a personal loan that you cannot afford,  you will be repaying this debt in hundreds of dollars of interest that could have been avoiding with the proper understanding of your financial obligation.

Make Your Personal Loan Decision

Learning about personal loans and how does a personal loan work can empower your decision regarding your finances. While personal loans are a hot commodity and so many in society have taken advantage of these loans options, that does not mean that your financial security should be negatively impacted in order to obtain a loan. First and foremost, it is important to understand why you want the loan, why it is necessary and if the loan is even affordable. Ensure that you have sought out the best personal loan based upon your credit and income, and the monthly payments are something that can be easily maintained each month.

If you find yourself in a situation where a secured loan is the right option for you, make sure that you have considered all of your property options and are only using property that you can easily part with as collateral for your loan. Finally, understand the impact that the personal loan may have on your for the long term and your finances. Once you have evaluated all of these areas and reviewed your personal finances, you will be able to make a solid personal loan decision.


The 7 Best Reasons to Get a Personal Loan

reasons to get a personal loan

A personal loan can transform your life. It can make a difference in your comfort, both emotionally and financially. Shopping around for one can be a challenge and finding someone to help can be a blessing. It’s not always a good idea though to take out a personal loan. So, we decided to provide you a list of what we think are the best reasons to get a personal loan.

There are a number of reasons to get a loan, you should be clear why you might want one or need one. Knowing the best reasons to loan shop can make your decisions so much easier and give you peace of mind.

Personal loans can be a practical option and can reduce a great deal of stress. They can be utilized  in a variety of circumstances and reasons.   Clarity is power, knowing why and what all the perimeters are, are important. Knowing the why can help you discover the best reasons to get a personal loan. So what are the criteria of loans, what are the best reasons.

Taking a vacation or buying something just to buy aren’t good and practical reasons. Cancun, or a cruise vacation through the Caribbean or having a great day at Disney world may sound wonderful, but in the long run, simply aren’t practical reasons to take out a loan. Perhaps the exception being someone is dying and that’s their final wish, but that kind of extreme reason is rarely around.  So how do you discover the best reasons to get a personal loan? By looking at the choices. You want to make a sound business decision and have objective standards, even though the loan is personal.

7 Best Reasons to Get a Personal Loan

First, let’s define a personal loan. Some loans are tailor-made for a very specific purchase, you may buy a home using a mortgage loan, or you may purchase a car with an auto loan. Then again most people can’t pay out of pocket to go to college, so there are student loans.

The difference is that a  personal loan can be used for anything. Some lenders don’t need to know what it’s for, and others want to know what you use the loan to pay for. If you’ve borrowed it for a responsible and legal reason, you can do what you want with it.

But the big question you should look at is when you Should Get a Personal Loan and what are personal loan shopping best reasons.

1. Consolidate Debts to a Lower Interest Rate

Money Cents: Is it Smart to get a Loan to Payoff Debt?

Sometimes the interest rate you got earlier were higher than what you can get in a current loan.A personal loan is a viable option for many reasons. Sometimes, using a personal loan to consolidate debt, especially when you lower your interest rate is a good idea. It might make sense when it’s a cheaper form of credit, and most importantly when you can comfortably afford the monthly payments. Grouping a bunch of higher interest loans also saves time as well as money as you only have to make one payment, rather than track a group of payments that often have different due dates.

2. Improve your Credit Score

There’s an old saying, “You have to have money, to make money.”  Well, the same thing goes for credit, and your credit score. You have to have credit to create good create.  Those FICO scores are tricky.  When you are trying to improve your credit scores a personal loan establishes something called “creditworthiness”.  Meaning you are worthy to loan money to. Focus on maintaining a positive payment history and pay more than the monthly minimums.

3. Pay for Medical Emergencies

We never like to have an emergency and a medical one is the worst.  Medical bills can be horribly expensive and an emergency usually is the most expensive of all.  A medical loan can cover emergencies but they can also cover planned medical procedures such as surgery or dental work. This can be in conjunction with your medical specialist or a hospital. Look at the loan terms and the minimum credit scores and if there are prepayment penalties.

4. Emergency Repair Loans

A meteor has crashed through your house, or more likely, a tree has fallen due to heavy winds and you have a gaping hole and your roof is leaking. That septic system that you were trying to nurse along for one more season, bit the bullet when Aunt Sophie flushed something down the toilet. Look into personal loan shopping best reasons.

Regardless if you don’t qualify for other loans or if it’s too small to take out a home equity or a second mortgage, and you can’t afford to pay for an emergency home repair by yourself.  You might want to consider a repair loan for certain emergencies.  It is possible to take out a loan up to $100,000 so while you repair the roof you could add a skylight to commemorate that meteor hit.

If you’re in a hurry and need money fast, online lenders are a great option for you. But be careful not to go for a scammer. Loanry helps you choose a reputable lender who may be willing to give you a loan.

5. Moving Expenses to go to a Job that Make More Money

You have that dream job, only it’s far, far away.  No, you aren’t moving to Shrek’s kingdom, but you might as well be.   It’s so far that moving can be a challenge even if it’s a do-it-yourself kind of deal.  Across the country sounds fun until you realize it’s going to take days, gas, and you’ll have to eat.  Also, you may have enough stuff to warrant getting a real mover. Take into account that the new job may be making more money.  You want to be fresh and perky, not exhausted. You want to move on and succeed ASAP, and a personal loan for moving can do it.  Especially when you regard the best reasons to shop personal loans

Do yourself a favor and make that move as smooth as possible.

6. Fund a Business that Can Make you More Money

Go fund me sounds great.  And we all watch Shark tank, but how often does a business warrant a walk on the show. They have to have come a long way first. Often you will hear them say, “I took out a personal loan to get this far.” But often the kind of small business just doesn’t enchant people to donate and sharks don’t take on businesses that haven’t gone after money on their own. Business can be hard work and with cash to fund those business necessities you can get down to the business of making money.

7. Pay Off Tax Debt

Death, taxes, and knowing the best reasons to shop personal loans. That’s a triple crown. But taxes must be paid and a personal loan for taxes is one option. Yes, agreements can be made with towns, and the IRS, but often those liens beleaguer your ability to do anything.

When looking for a loan use personal loan shopping best reasons

  1. Do shop around, that can get you the best rate.
  2. Don’t go wild applying for loans, be strategic. Would you look at a thousand houses to buy in places you don’t live?  Then why would you look and apply for too many loans. If they all came in you’d be flooded. Not just with money but with debt.   Be clear why you want a loan, and choose a few strategically.
  3. Review the Loan agreement carefully. You don’t want to find out about penalties and problems later.
  4. Don’t borrow more than you need. Remember you’ll be paying interest.
  5. Make your payments on Time. This is the most important thing to do.

Should You Use A Personal Loan for a Computer: Power On!

Personal Loan to Buy A Computer

We may try and try to keep our bills paid and money in the bank, but many of us find ourselves living paycheck to paycheck or barely above that. Something unexpected hits, and we lack the money to take care of it. Now we have to make a decision: take out a loan or not? Though debt is never the best option, sometimes taking out a personal loan can be a good idea, but is a personal loan for a computer one of those times? Read on to learn more.

Should You Take Out a Loan for a Laptop?

Most people answer with “Yes, if you can make money using the computer”. The popular opinion is that the only “ok” debt is for a home, a car, or a degree. Let’s face it though- we live in a digital world and a laptop is often necessary. The question is whether it is necessary enough to get a personal loan for a computer? Below are some pros and cons of getting a personal installment loan to purchase a laptop.

Pros- Personal Loan for a Computer

  • You can get the laptop immediately instead of having to wait until you save enough. If you need the laptop ASAP for work, school, or some other project, accessing the laptop now is a priority.
  • It can help to build your credit- if you can to pay it back. Small personal loans can improve your credit report if you make timely payments.
  • A personal loan can be less expensive than retailer financing. The interest charged by retailers is much higher than that of personal loan lenders.

Cons- Personal Loan for a Computer

  • Unless you can pay the loan off immediately, you are looking at paying interest. Paying more than the item’s amount is never fun. Sometimes the interest can add up to the amount of the item.
  • Most personal loans do not go under $1,000. That means you will be borrowing more than you actually need. If you need that money for something else or can put the extra away to make your first loan payment, this may not necessarily be a bad thing. As a general rule, however, borrowing more than you need can lead to trouble. Remember: the more you borrow the more you have to repay.

Can I Take Out a Personal Loan for a Laptop?

You can get a personal loan with these simple steps for just about any reason. Though they ask what the loan is for, the lender cares much more about your ability to pay the loan back than they do the reason you are requesting it.

If you choose to take out a personal loan for a computer, do not accept the first loan offer you get. Do your research to find the best loan terms and interest rates available to you. Just as you shop around for a car you should also loan shop for a laptop. You can do this from the comfort of your couch because these days you can easily do your computer loan shopping online from your phone. Websites like Loanry can help you find a personal installment loan lender.

Modern home office with laptop on the desk.

Using a Credit Card to Purchase a Computer

You may be wondering about buying a laptop with one of those handy things we call credit cards. A credit card can, of course, pay for a laptop, just as it can pay for anything else. With a credit card, as long as the item is within your credit limit, you can bring the item home as soon as you purchase and put it to work.

However, there are cons to using credit cards, as well. If you do not pay off the full amount by the end of your billing period, you are charged interest. Sadly, if the bill is not paid fast enough, you could be paying at least half the amount of the item in interest alone, many times more. You have to decide how much you are really willing to pay for that laptop. If using a credit card is the route you choose to go, be sure to shop around for the best credit card for you.

How Does Computer Retailer Financing Work?

Retailer financing means that the retailer is loaning you the money to purchase an item, which is a laptop, in this case. At times, you are required to pay a down payment but not always. The retailer will check your credit score to determine how likely you are to repay the loan. If your credit score is high enough, they will discuss loan options and terms with you. Approval rates are higher for this type of financing than for a traditional loan. If approved, you are billed and pay for the laptop over time, much like a credit card.

Sounds simple enough, right? Not so fast. You have to find the catch.

There is Generally Always a Catch

Often, retailers advertise “90 Days Same as Cash”, “0% Interest for 24 Months” or something similar. It sounds extremely tempting but is often misleading. I once worked for a retailer that ran deals like these and I saw how often people were surprised after the special financing period was over. As far as 90 Days Same as Cash goes, you have 90 days to pay the item in full without any interest being added. If you do not pay the item off during that 90-day period, the interest is compounded and seemingly out of nowhere skyrockets. That interest you thought you were avoiding for 90 days has just been added to your bill.

What About the “0% Interest for 24 Months”?

What about the 0% Interest for 24 months? It is a great deal for those that can pay off the amount during those two years, but the same compounded interest applies here. You can take full advantage of this deal if you make more than your minimum billed payment and get the item paid off before the interest kicks in.

The bottom line: you need to understand what your payments will look like after the special financing period is over. Read the fine print and ask questions until you are clear on the matter. If you decide that retailer financing is the way you want to go, learn everything you can about what you are signing up for so there are no surprises later.

Computer Loans for Students

Most students find themselves in need of their own computer. Between research to complete, graded online discussions, and papers to write, library visits every time you need to use a computer is tough. Some schools understand this. They solve the problem by providing a laptop to the student. They simply add the cost in with your tuition. Sometimes college bookstores have them for sale and students can use their financial assistance to purchase them.

There are also the options to go through:

Rent-to-own stores are convenient as there is no credit check, you can walk out the same day with your item, and if you decide you do not like that particular brand or there is a problem, you can simply exchange it. However, the buyer usually pays out almost double the cost of the item making this a costly choice. For a personal loan, a college student may not have established credit yet. In this case, you may ask your parents to cosign for the loan.

Computer Loans for Bad Credit

Trying to get a personal installment loan with bad credit can be an overwhelming and discouraging process- I know firsthand. It can be possible but very difficult. Having a bad credit score tells lenders that investing in you is a high risk. Not everyone will approve you and those that do will likely charge really high-interest rates and may even require collateral. Before trying to get a personal installment loan, understand that you will definitely have to research and loan shop to find someone to approve you as well as give you the best interest rates.

When Is Taking Out a Personal Loan a Good Idea?

In order to answer this question, you need to answer a few more like:

Do you need to get a computer to run your business to pay your bills and eventually this leads increasing your net worth or do you just want to go on a shopping spree? The purpose of this kind of computer shopping loan will greatly weigh in on whether the loan is a good idea. Obviously, fixing your car to get back and forth to work is important and would likely to be a good reason to get a loan, especially if you have no alternative modes of transportation. However, taking out a personal loan to simply go on vacation or to just have a good time, step away now! It is not worth the debt.

Likewise, if you need a computer for work or school, a personal loan for a computer might be worth it. If you just want the computer to scroll through social media or stream videos, it would be better to save up money and purchase it outright.

Are computer personal installment loans the only way to take care of this situation? Could you have a yard sale instead or borrow from a friend with no interest? Do you have enough time to budget and save for a few weeks? Could you pick up an extra job and get paid in time?

If there is absolutely no other way to take care of your problem in the necessary time frame, you should probably consider a loan. Just be sure you have exhausted all other known possibilities first as debt is debt, regardless of why it is there. If you can borrow a friend’s laptop when you need it or even use the library computers, it may not be necessary to take out a personal loan for a computer. If you do not have consistent access, a loan may be worth the consideration.

A major factor is whether you will be able to pay the loan back. Not paying a loan can lead to repossession of items, the lender taking whatever you put up for collateral, and messing up your credit. It takes so much longer to fix credit than it does to destroy it. Look through your finances carefully to decide if you can pay it back. If not, getting a loan is not a good idea.

Once you take out a loan, you are responsible for it. You will be required to make scheduled payments until it is paid off. Are you willing to stick with it? Can you diligently work on paying off the loan to prevent bad marks on your credit?

Will making the payments on this loan interfere with your ability to buy groceries? Will you still be able to comfortably buy your baby diapers? Are you going to have to work two full-time jobs? Will you need to take out an additional loan to simply cover regular bills?

Having to make some sacrifices is one thing. If you have to skip necessities or run yourself into the ground to pay back a loan, you should probably stay away from them. If you can pay back the loan with nothing more than sacrificing your daily Starbucks run, a loan is worth the consideration.

Final Thoughts

Basically, getting a loan is an extremely personal decision. Only you know your full situation and whether it calls for solutions, like a personal loan. As with any major decision, for your research and consider all options. Do not make the decision without heavy consideration. Look over your current finances to determine if a personal loan will honestly help or just dig you into a deeper hole. It may be prudent for you to talk it over with a friend or family member who can help spot potential problems. If you still feel that taking out a personal loan for a computer seems like the right choice for you, shop around here at We can help you find a personal installment loan to buy a computer.


What is a Good Credit Score? Your Credit 411.

Maybe you know that you need a good credit score to get a favorable rate when you want to shop personal loans or rent an apartment.

If you are wondering if your credit score is good then you need to read on to learn what that really means.

What is a Good Credit Score?

A credit score expresses your relationship with credit in a three-digit number. There are several bureaus that generate credit scores — perhaps you’ve heard of Equifax, Experian, or TransUnion — using either the FICO or VantageScores sliding scale.

Experian logo.
TransUnion logo
Equifax logo.

A good credit score generally falls within the 700 to 749 range. The problem of trying to figure out a good credit score isn’t that simple; however, as some creditors see anything above 720 as excellent, rather than good.

It’s in your favor if a lender moves you up to excellent, as you’ll usually get better terms when you loan shop. Yet this does make it difficult to pin down a good credit score numerically.

Adding to the confusion over determining a good credit score is the fact that creditors don’t report to every agency. So if you have a store credit card, the retailer won’t report to the three major credit bureaus, they’ll report to one or two.

Due to the differences in reporting by creditors, your credit score can vary by several points across the three major credit bureaus. This means that if you are on the cusp of a good score with TransUnion, for instance, you might actually have good credit with Equifax because the bureaus aren’t looking at the same data set.

While you may be able to run your own credit report — selecting the place where your score is best — for a landlord credit check, you can’t exactly tell the bank considering you for a mortgage which credit bureau to use for their credit check.

Credit score scale

What Other Options are There?

Credit scores range from 300 to 850. 750 or greater typically means excellent credit. 650 to 699 is a fair credit score, 550 to 649 is a poor credit score, and 300 to 549 means a bad credit score.

Why is a Good Credit Score Important

The higher your credit score, the greater the chance you will pay your loan on time. So a good score means you are a credit-worthy person, in lenders’ eyes.

When your score is good, you may have an easier time finding an apartment to rent, because a landlord sees you as a qualified applicant. Or you may receive a lower interest rate on an auto loan than someone whose score is fair.

Consumers are entitled to one free credit report from each of the major agencies per year. Thinking ahead, if you’re planning to make a major purchase in the next 6 months, it’s a good idea to run a credit report from at least one agency.

This way, you’ll find out if your credit score is good. You may spot mistakes on your credit report, which can be disputed and removed from your report.


If your score is good, keep it that way by paying bills on time. Use under 30 percent of your available credit to maintain a good score. Avoid opening new accounts, as this triggers a temporary dip in your score. When you don’t have a good credit score, work to improve it before you need a loan.

If you can get a good credit score, you’ll be favorably treated when you need money. If you aren’t in the good score range, work to develop money management skills and pay down debt.