Tag: personal loan finance company

What’s Required to Get a Low Interest Personal Loan?

Posted on | by Katherine Davis

pile money coins saving trend decrease for investment mutual fund finance and business.

One common question many prospective borrowers want to ask is if they can get a low-interest personal loan. A personal loan can refer to many different possible loan products out there. Generally, a personal loan is a loan that allows you to do whatever you want with loan funds. Those who take out personal loans have complete freedom regarding what they spend the money on. This is a huge advantage of this type of loan.

Sometimes, we all have unexpected expenses that come up. Borrowing a low-interest personal loan can be the best solution for handling these expenses in some cases. There are numerous advantages to borrowing money. Loans are not just used for large purchases, but they can also allow for debt consolidation. They can help you to organize your finances. Simplifying one’s debt is important for those who are paying on numerous credit accounts.

Get a Personal Loan With Low-Interest Rate

Before borrowing a personal loan, consumers should learn as much as they can about these loans. They also should do everything possible to search out a low-interest personal loan. A low-interest loan means a loan that costs less. You want to pay attention to the interest rates and other expenses of personal loan offers. This will help you pinpoint the low-interest option that’s easiest on your budget.

A number one priority when borrowing is staying on top of one’s debts. Before you borrow, you should work out your budget. Taking out a personal loan means you’ll have an additional expense each month. You need to plan carefully to avoid falling deeper into debt.

Low-Interest Personal Loans Defined

Low-interest personal loans are loans made to an individual borrower at an affordable interest rate. It’s helpful and important for borrowers to have access to loans like these whether they’re running a business or not. Personal loans are loans that give borrowers a lot of freedom to use the loan funds as desired.

Personal loans are much like any other type of loan. They involve a lender providing you with money and then charging you interest on it as you pay the loan back. However, personal loans are also distinct from some other common types of loans like auto loans and mortgages. Personal loans are usually an unsecured type of loan. The borrower qualifies for the loan based on their credit and income. Unlike with an auto or home loan, the borrower doesn’t need to use the funds on a specific item. The loan funds can be used for any purchases whatsoever. They can also be used as a low-interest debt consolidation loan.

There are numerous possible borrowing scenarios where a personal loan would be appropriate. A personal loan is a solution for a loan that doesn’t have to be spent on a specific purchase. These are loans that offer a great deal of freedom. Personal loans are also often used in debt consolidation.

How to Qualify for Low-Interest Personal Loans – Requirements

Those who want to take out personal loans for business purposes will need to meet a few requirements. These requirements can vary by lender. However, there are some common requirements among various lending companies. Generally, it will be necessary to meet a certain credit score. Business owners applying might also need to meet revenue requirements for their companies. Additionally, it could be necessary to have a business that’s been in operation for a given period of time. Some lenders could require that a business owner is in business for six months or more before qualifying for a business loan. This helps ensure that the applicant will continue to bring in income reliably to pay back the loan.

Those who cannot qualify at the moment can increase their chances of qualifying in the future in a variety of ways. They can do this by taking some time to improve their credit scores. You can improve your credit score if you pay off some of your existing debt. And you can also improve your credit score by going a certain length of time without missing any payments on your credit accounts.

You can also increase your chances of qualifying by increasing your income. The more you are bringing in, the more creditworthy you’re likely to be for personal loan lenders.

Another thing you may want to do if you have failed to qualify is finding a cosigner. A cosigner can back up your application and help you to be approved. A cosigner with a good credit score and income level could make it possible for you to qualify for a low-interest personal loan right away without having to wait to improve your own qualities as a borrower.

Finding a Low-Interest Personal Loan

Of course, interest is generally the major expense to consider. If you want to regain control of your debts, a low interest debt consolidation loan is what you need. When looking for a low-interest personal loan, consider what the lender looks at in determining your interest rate. There are numerous things you can do to improve your credit standing. You may be able to reduce your interest rate.

A credit score is generally achieved over time. However, there are a few things you can do to quickly raise your score. You can raise your score by keeping all accounts current. If you can afford to pay off a chunk of your debt, you could boost your score. Your credit score is calculated using the ratio of your debt to your available credit. Paying off debt an increasing available credit can quickly boost your score.

You may not be able to improve your score because you don’t have funds available to pay down debt. There are still some options for achieving lower interest rates. If you’re looking for a low-interest personal loan, you may get better rates with a cosigner. A cosigner is someone who will sign for the debt along with you. Perhaps you have a spouse or parent who will help you get a low-Interest personal loan. They can cosign for you and you may get significantly lower rates.

You can also bring down the costs of borrowing by reducing the amount that you borrow. Your interest is generally a percentage of your loan amount. Therefore, borrowing more means paying more interest. Consider borrowing less if you’re concerned about the interest costs of a personal loan.

The term “personal loan” can actually refer to a few different loan products. If you’re interested in a personal loan, you should familiarize yourself with these different products. The following are four of the main types of personal loans.

Traditional Loans

Traditional lenders commonly offer a low-interest personal loan. Any bank will offer some sort of personal loan product. However, qualifying to borrow with a traditional lender can be difficult. Personal loans from traditional lenders typically feature the best interest rates. However, they also tend to require that borrowers have certain credit scores. They will also consider the applicant’s income level. Borrowers typically need to reach a certain income level to qualify.

Secured Loans

A secured loan could be a good personal loan option for those with lower credit scores. One of the most common types of secured loans is a title loan. With a title loan, the borrower uses their vehicle as collateral for a loan.

Other types of collateral can be used to secure loans. For example, a home equity loan allows a borrower to secure a loan with their home equity. These secure types of loans can be very useful. They basically allow anyone to borrow who owns some possessions of value.  If you’re trying to qualify for a low-interest personal loan, consider what you own that you could use to secure a loan.

Loans from Online Lenders

Nowadays, there are many online lenders of personal loans. You should definitely explore online lender possibilities to find the right personal loan. You’ll likely find that better deals are online. Online lenders can often offer lower rates because they don’t have the overhead of running physical locations.

Consumers are often impressed with the speed and convenience of borrowing money online. With many loan providers, applying takes only minutes. Also, loan funds are quickly put into the bank account of approved borrowers. Prospective borrowers definitely need to take advantage of the Web for comparing loan offers.

The Costs of a Low-Interest Loan

Anyone considering borrowing needs to carefully analyze the cost of a loan. It’s unfortunately easy to overlook expense when borrowing with all the loan funds are in front of you.  However, you will be expected to pay all that money back with interest. When you borrow, you should be looking to improve your financial future. This means you shouldn’t take on an expense you can’t afford.

We all now that the interest charges are the major cost of a loan. However, many low-interest personal loan providers also charge loan fees. You need to pay attention to the fees that go along with a loan. A loan that has a low-interest rate but lots of upfront fees might not be such a great deal after all.

Interest rates

Your main consideration when evaluating loan offers is interest rates. This what we are looking into in this blog. The interest rate the lender gives should be a percentage. As we said, the better your credit score, the lower the interest rate you can get. Personal loan interest rates can vary widely. Rates can vary from down around five percent to up to 30 percent.

The major determining factor in the interest rate is your credit. Those who have excellent credit scores over 720 get the best interest rates. However, most of us are in the fair to poor credit range. With fair credit, a consumer might struggle to find interest rates under 15 percent.

Borrowers shouldn’t just know the interest rate on loans. They should crunch the numbers and figure out costs over the life of the loan. For example, you pay $1,000 in interest if you are charged a rate of five percent on a $20,000 loan. Consumers need to consider not only the total costs of the loan but also the monthly payment. It’s important that consumers can budget their income effectively to be able to afford this monthly payment.

Loan fees

Loan fees are the easily overlooked expense that goes along with some personal loans. Lenders will often add on fees for various reasons. There could be a fee for applying for a loan. There could also be origination or service fees on personal loans. Consumers shouldn’t underestimate how loan fees can add up.

Compare the total costs of different loan offers you consider. Add up all the interest and fee costs and find the most affordable option. And remember, even when you find a low-interest personal loan, it still has a cost attached to it. It may be not as expensive as when you pay more interest, but make sure to keep in mind that the interest has to be paid, no matter how low it is.

Options If You Can’t Get a Low-Interest Personal Loan

If you have poor credit or low income, you may have problems getting a low-interest personal loan, or any loan for that matter. If this is the case, try some of these:

No Credit Check Loans

If you have poor credit, you’ll be happy to know that no credit check loans are out there. You might find a loan offer that requires no credit check at all. This type of loan should be relatively easy to qualify for. However, these loans generally are secured loans. You’ll need to provide some collateral like your vehicle title for these loans. Also, no credit check loans are probably going to have high-interest rates. They will not be the most affordable option. Therefore, you’ll want to explore other loans if your credit is good.

Increase Your Income

Even if your credit history is perfect, you may struggle to borrow if your income is low. A lot of lenders will have an income requirement applicants must meet. Increasing your income can boost your credit and improve your finances over time. If you’re not bringing in a good income, it might not be a good idea to commit to a loan. In the meantime, bring up your income. You can increase your income by taking more hours at work or adding on a second job.

When you make more money, you look better to lenders. Lenders of traditional loans will ask for contact information from your employer. The lender may contact your employer to verify your income. In addition to contacting the applicant’s employer, lenders often also request pay stubs to verify the applicant’s employment. This is an especially common practice when it comes to payday loans.

Of course, increasing your income also makes more funds available to you. Taking time to increase your income is ideal for improving your finances overall. Exploit any income opportunities you can if you’re working to improve your financial situation.

Secured Loans

If you can’t qualify for a personal loan, you might try some other options for getting the financing your needs. In particular, you might want to look to secured loans. If you have collateral you can provide for a secured loan, you could be able to find fast funding. In particular, you can consider an automobile title loan or a home equity loan for a secured loan that will be easier to qualify for. You could also contact investors for quick business funding. Another option is to scout out opportunities to borrow a private loan through your business partners if you cannot currently qualify for a low-interest personal loan.

Conclusion

It’s always good to have an option available for a low-interest personal loan. Being able to conveniently borrow for a reasonable cost gives you an important financial asset. If you can borrow a personal loan, you can cover emergency expenses that come up. You can also take advantage of lucrative investment and business opportunities that come up but require capital.

Even if you’re not going to borrow right away, it’s a good idea to explore personal loans. A lot of consumers are surprised to find that it was easier to borrow than they thought. You can explore all the different personal loan types. Then, you can determine what option is best for someone with your income level and credit history. You should have a personal loan finance company in mind for acquiring a low-interest personal loan. Don’t just explore the interest rates they’re offering. Also, find a loan provider with great customer service.

By shopping online, you can discover many borrowing opportunities. The Internet has all the information you need in one place to look for a loan. We offer information on many borrowing opportunities on our site.

Equipment Financing When You Need to Be Better Equipped

Posted on | by Julia Peoples | 1 Comment on Equipment Financing When You Need to Be Better Equipped

There are more than 28 million small businesses in the United States. A small business is one that has less than 500 employees. They account for about 99 percent of all businesses in the US. That is the good news. The bad news is only half of those businesses make it five years and only about 33 percent of them make it ten years. That is why equipment financing is important. It is easy to create your own small business. However, there are many difficulties when it comes to running your own business.

The most common concern for small businesses is when you need to expand in some way, but you do not have the money to do so. You may need to hire more employees, purchase materials or equipment. There are some loans available to you as a small business, including equipment financing, that may help you expand your business. Continue reading to find out more about equipment financing for your small business.

What Is Equipment Financing?

You may be a great business person and run your business like a pro, but you may not know about equipment financing. It is not something you need to know until you actually need this type of financing. However, I always feel that knowledge is power. You should have all the information so that you can make the best decision for you in that moment. In an effort to make sure you have all the information you need, I am going to start with the basic definition of equipment financing.

Equipment financing is when a lender gives you money for a piece of equipment. The loan is for the value of the piece of equipment. The equipment you are buying becomes collateral for the loan. That means if you do not make your monthly payments and default on the loan, the lender can take the piece of equipment from you. The lender determines the terms of the loan. The terms include the interest and length of the loan. You want to make sure that the piece of equipment will last longer than, or at least as long as, it takes you to repay the loan.

For example, if you need to purchase a truck for your business and the lender sets the term of the loan for 10 years, you want to make sure that the truck lasts you for 10 years.

How Is Equipment Financing Different From A Personal Loan?

A lender or personal loan finance company allows you to borrow money for any particular purpose. You do not need to purchase a piece of equipment to be able to obtain a personal loan. You can use it for any business or personal reason. For example, if you want a new kitchen, tv or audio equipment. The lender adds interest to your loan as a fee for allowing you to borrow the money. The lender determines how much money they will let you borrow and the interest rate based on your credit score. There are many different lenders available to give you a personal loan, such as traditional banks, credit unions, or online lenders. You can apply for a personal loan online and complete the application process in minutes. You can receive a response in less than 24 hours.

One of the major differences between equipment financing and a personal loan is the equipment is collateral in the financing whereas there is no collateral for a personal loan. You may not be able to get an equipment loan from just any lender. Some banks may provide you with financing for your equipment. You may also be able to obtain this type of financing through the company where you purchase the equipment. For example, you may need to purchase a John Deere tractor and you can find financing through a John Deere dealership.

Personal Versus Business Loans: The Differences Revealed

Advantages Of Equipment Financing

There are many advantages of equipment financing. You should know them when determining if this is the best option for you. Typically, when you get equipment financing you get the lowest interest rate available. Once you pay off the loan, the equipment is yours immediately and you can do whatever you would like with it. You can sell it, set up a sale and leaseback, or keep it for purposes of your business. The interest that you pay your loan is tax deductible. There is also a depreciation tax that can benefit you.

It does not matter the size of your business, you can still qualify for equipment financing. When you opt to finance your equipment, you can invest in the capital of your equipment when using your cash for other purposes. This prevents you from getting your cash tied up in your equipment. You are better able to predict and forecast your cash flow when you do not use it all to pay for equipment. You do not typically have to have a down payment when you finance your equipment. There are typically no upfront costs. You can choose the length of the loan that can keep your loan payment at a reasonable rate.

When you finance your equipment, it gives you a large amount of flexibility for your money that you did not spend upfront on the equipment. It allows you to gain capital without spending all of your money at one time. You can leave your money in the bank and allow it to accrue interest. This way you are earning money on your money and it is available if you need if for something else.

Disadvantages Of Equipment Financing

Just like with most things, there is a downside to equipment financing. Before you opt for equipment financing, you should make sure you have a full understanding of the positives and negatives. You want to have all of the information when you are making a decision about financing. You may still decide this is the right choice for you, but you can do that with the complete details.

Depending on the lender, you may have to provide a down payment for the equipment. If you do have to provide some type of down payment, it may be higher than you would like it to be. While equipment loans typically offer lower interest rates, you could find yourself with a loan that has a higher rate. Lenders base your interest rate on your credit score. If you do not have the best credit score, you may find yourself with a high-interest rate.

This type of loan only allows you to purchase equipment. You cannot use it for any other reason or purpose. Depending on the life of the loan, the equipment may be outdated by the time you own it. Perhaps by the time you have the equipment paid for, you may no longer need it making it useless to you. Once you own it, you may now need to sell it or purchase another piece of equipment with another loan to replace it. You own this piece of equipment which can be a positive or a negative but I want to focus on why that might be a negative for you. When you own the equipment, you are responsible for it. If something on it breaks and needs to be repaired, you are responsible for the cost of the repair.

How Is Revolving Credit Different?

Another way you can get equipment financing is to open a line of credit. This is slightly different from actual equipment financing. Revolving credit it also referred to as a line of credit. You work with a lender and are extended a certain amount of credit, similar to a credit card. Except this, line of credit has an end date, like a personal loan would. So, the lender extends you a line of credit of $5,000 and you have it for 36 months. That means that you can use all or some of that amount of money over 36 months. You only pay back what you have used. You also only pay interest on what you have used.

Prior to using the line of credit, you sign loan documents that outline the interest rate, the amount of the line of credit and the amount of time you have to use and repay the money.

This is a flexible way to borrow money because you can use as much of it as you need and when you need it. One of the major differences between a line of credit and equipment financing is that the line of credit can be used on whatever you wish. It does not have to be used for equipment only. You also do not have any collateral associated with a line of credit. If you use it to purchase equipment and you default on the loan, the lender does not automatically take the equipment. That does not mean you will not lose the equipment in the long run, but that is a deeper article about what happens when you cannot pay any of your bills.

Are There Other Types Of Business Loans?

Types of Business Loans

When you are considering equipment financing, you should shop personal loans and understand what other loans are available to you. This helps you to have a full understanding of your options so you can make the best decision. As a business owner, you have some additional loan options available to you.

One of those is a Small Business Administration (SBA) loan. Typically, you are able to borrow larger amounts of money with these types of loans. In some ways, they are similar to mortgages because they can be amounts that are that large and for up to 30 years. These loans are backed by the government agency, the Small Business Administration. They do not provide the loan. You still have to visit an approved lender for the money, however they guarantee 85 percent of the loan. That means that if you default on the loan, they pay 85 percent of it.

This type of loan is only used for business reasons. You can use it for purchasing equipment, buying other business or real estate, refinancing, or something significant for your business. With these loans, you can borrow as much as $5 million and make regular monthly payments to repay the loan. They can come with variable or fixed rate options.

The application process can take quite a long time. You may have to provide some type of collateral for this type of loan.

How Do I Know If Financing Is Right For Me?

When it comes to equipment financing or any other business loan, the bottom line to determine if it is right for you is can you afford it? You may need to expand and purchase more supplies so that your business can grow, but if you have no money coming in, you may need to find ways to increase your income. You should determine if you can make the monthly payment before you take on a loan. There are loan calculators available online. It can help you determine a good estimate of what your loan payment will be.

When you see that monthly estimate, you should take a good look at your monthly income to determine if you can pay another bill. You are the only one that can make the determination as to how this payment is going to impact your business income. You must remember that any money that you borrow must be paid back. This is a loan, not a gift and the lender always wants their money.

Where Can I Find The Loan I Need?

There are a number of lenders that offer equipment financing. Before you make your final decision on a loan, you should do some research. Do this, to see what options are available to you. A quick internet search can provide at least five lending options available to you. You should pay attention to the interest rate that the lender is offering and what type of credit score you need to be approved for a loan with them.

For example, Currency offers overall equipment loans with interest rates ranging from 6 percent to 24 percent and they want you to have a credit score of at least 585. This lender currently is offering the lowest interest rates, but that is always changeable. When you do your research, you should make sure it is current and not months old. Credibility Capital, on the other hand, wants you to have a higher credit rate of around 680 and they provide equipment loans for items that cost less than $50,000. They offer interest rates from 10 percent to 25 percent.

Should I Try To Save Money Instead?

In general, saving money is a good idea. The less money that you can borrow means the less debt you have. And the less it negatively impacts your credit score. However, with a business, it can be important to have quick access to cash for items. You need to balance your business, how often you need to have cash and what equipment financing means for you.

I am sure you know that it can take a significant amount of time to save money. If the item you need to purchase is expensive, you may not be able to save the money quickly enough. It is depending on how badly you need the equipment. Similar to deciding if you want to take on more debt, you need to decide if you should work on saving the money for the items you need, or if it is better to take on debt to obtain them. You may have to take on debt temporarily but the purchase of equipment may allow you to produce more and therefore bring in more money. This may also help you pay off the equipment faster. Again, you have to take all of the information you have to make the best decision for you. And your business at this time.

Conclusion

I have given you a lot of information about equipment financing to help you make the right decision for your business. Just because you can finance equipment does not mean that you should. It is an option for you to consider along with all of the other options available to you. You may take on this type of financing with a goal of earning the money each month to pay for the loan, so that basically the equipment pays for itself. That is a great goal, however, you need to stick to that goal. It is easy to spend the money somewhere else when it comes in, but you have to keep in mind that you have a goal of paying off the equipment, so you must do that first.

How to Find Personal Loans with Good Credit and Low Income

Posted on | by Julia Peoples

When you need a personal loan, it can be a stressful time. It can be stressful because you might be in a difficult financial position. You may need money quickly to pay for an emergency expense. It can also be stressful if you do not fully understand the details of a personal loan. There are some points you should be aware of before you agree to a personal loan. While it is fairly easy to get personal loans with good credit, your income may make a difference. Before you consider applying for a loan, make sure you completely understand how your credit and income impacts your ability to obtain a loan. Continue reading to find out all that you need to know.

Before We Begin – Personal Loan Basics

If you are considering a personal loan, it is important to understand the most basic definitions. Personal loans tend to go by different names, but most of them are personal loans. The lender can be a bank, credit union, online lender, or even a friend or family member. When you borrow the money, you make a promise to repay it within a set period of time. You usually make monthly payments for three or five years. The lender charges you a fee, better known as interest, for your ability to borrow the money.

Lenders get to set their own interest rates. They set those rates based on your credit score. It is easier to get better personal loans with good credit. The better your credit means the lower your interest rate, which means the lower your monthly payment. Most personal loans are unsecured loans, which means there is no collateral attached to them.

This type of loan is often riskier for the lender and has a higher interest rate. If you are interested in a personal loan, you should do some personal loan shopping. Loans are not a one size fits all type of lending. You should make sure that you read all the fine print of all loan agreements. You should make sure the loan you obtain is the right one for you.

And you should also make sure you go with a reputable, trustworthy lender. If you want to cut the search time, Loanry is the right place for you. We partnered up with Fiona to connect you with these lenders and send you offers within seconds.

All You Need to Know About Personal Loans with Good Credit and Low Income

I know you came here to find out how to get a personal loan with low income and good credit score. But let’s first go over the basics, just in case.

What Is a Good Credit Score?

When you want to obtain personal loans with good credit, it is important to understand the definition of credit. In general, credit is the ability for you to obtain something today with the promise to pay for it at a later date. There are a lender and a borrower involved when it comes to credit. Unless you are incredibly rich and do not need money, you will most likely always be the borrower. The lender is typically a bank or some other financial entity. The lender allows you to take ownership of something despite not having paid for it, or not having paid the full amount.

There are different types of credit. An example that may quickly come to mind is a credit card. That is the most prominent type of credit that we usually consider. However, other great examples are mortgages and car loans. These are instances where a lender is giving you money to buy a house or car and you promise to repay the lender over time. This type of credit allows you to make large purchases, even though you do not have the money for them today. Local businesses may also extend credit to you. Consider the neighborhood plumber or heating technician. They may allow you to pay for a percentage of the work today and pay the rest once the work is completed.

When a lender allows borrowing money, they are taking it on faith that you are going to back them back. Your credit history tells the story of your payment history. It shows if you have maintained your commitment by paying back loans. Your credit is built slowly over time, but it takes only one or two missed payments to start to decline.

How Do I Know If My Credit Is Good?

Your credit score goes hand in hand. While your credit score is a three-digit number that appears on your credit report, it is an indicator of how well (or not) you have used your credit.

Whoa…I have said the word credit about four times and each one means something different. So, I am going to pause for a moment and do some explaining. Your credit report shows your credit history. When I say credit history, I mean anything and everything that has some credit implications. There are items that have an impact that you probably do not realize. It shows your employment history and how long you have been in your current job. And it shows how many jobs you had and for how long. It shows your address and how long you have lived there. It also keeps a record of your previous addresses and how long you lived there.

These items show how stable you are. When you move around a lot, lenders do not consider you to be that stable or secure. Your credit history shows all the credit you have been given and how you use it. It shows loans, credit cards, mortgages, etc. The lenders also get to see any late payments and even loans on which you defaulted.

Your credit report also shows your credit score. I mentioned above that it is a three-digit number and it indicates to lenders if you are a risk. A typical credit score is in the range of 350 to 850. Most people have a credit score that falls between 600 to 750. If you have good credit, it falls between 670 to 800. You should be aware that anything below 570 is in danger of bad credit.

When you have bad credit, you may find it is difficult to be approved for a loan. Naturally, it is much easier to get personal loans with good credit. If you have less than perfect credit, do not stress. You can still obtain a loan, it just takes a little more work. Do some research and look around for the best loan for you. You may want to consider a personal loan finance company.

And What If I Have Low Income?

Your income is important when it comes to obtaining a personal loan. Lenders want you to have a stable and consistent source of income. They also want you to be able to prove it. A lender also looks at other factors to determine if you have a low income. Some of these factors are the size of your family and where you live. It is possible to find loans with low income, but you have to do a little more research and work. If you search for personal loans good credit low income, you can find some solid options for yourself.

You may see that loans for those with low income have high interest rates or are only for low amounts. If you have low income, you must be cautious with a loan that you obtain because some loans may make your financial situation worse. You can always find personal loans with good credit, even if you have a low income. If you have low income, you could consider getting a co-signer for your loan. This person promises to repay the loan if you are not able to do so. This person’s income is a factor in the loan, so you may be able to get a better loan with a co signer.

What Is More Important – Credit or Income?

One is not more important than the other. They are both equally important. Your income does not impact your credit score, but it impacts your ability to pay your bills, which impacts your credit score. A lender can obtain your credit score without you having to provide documentation. For a lender to get a true idea of your income, you must provide documentation to the lender. They often want pay stubs as proof of income. They also may want to see your previous tax returns, or W2s, as well as bank statements.

Credit scores and credit history show the lender how you have used credit and paid it back in the past. Income shows lenders your ability to make the payments to repay the loan. Sometimes, if you do not have the best history but you have really high income, a bank may be willing to lend you money. Also, if you have low income but have an excellent credit history of always making timely payments, the lender may allow you to borrow money. They are both an important factor in the lender’s decision. I know I have mentioned this a few times, but it is important to repeat: it is much easier to obtain personal loans with good credit.

Can I Get a Personal Loan with Low Income AND Bad Credit?

If you have less than perfect, or maybe even, bad credit, that’s bad news. The good news is you can always work to improve your credit score. It’s really difficult to get a decent deal i.e. interest if you have both low income and bad credit. The lender just doesn’t have anything to hold on to and believe that you will be able to pay off this loan. So ultimately, you might even be denied a loan.

But, you can improve your credit score and increase your chances. It does take time and consistent effort on your part. The better your credit score is, the more likely a lender is going to lend you money. Use that as your motivation.

For now, let us focus on how to improve your credit score. The first thing you want to do is pull your credit report. This allow you to see your credit report, which includes your credit score. Once you see it, then you know what it is and know where to go from here. Take a good look at it and check for errors. If there is anything that does not look right, you must have it corrected or removed immediately. You can contact the reporting agency and have it corrected. If you go to their website, you should be able to find the appropriate form.

After that, you need to eliminate as much debt as possible. The more debt you carry means the lower your credit score will be. Most lenders prefer to see your debt to income ratio below 30 percent. This is the amount of debt you have in comparison to the amount of income you receive. Lenders feel that the more debt you have, the less likely you are to repay it. You may want to consider finding additional means of income to pay off more debt faster. Perhaps you can get a side job, or sell some items around your home to make more money.

In addition to paying off your debt as quickly as possible, you must pay all of your bills on time. You must also pay them in the correct amount. One of the top reasons a credit score drops is because you are making late or missing payments. You must make every effort to make all payments on time.

What about the Interest When I Have Good Credit and Low Income?

Another item to consider when thinking about a loan is the interest. This is actually a big factor. It is probably bigger than you think. When you want to borrow money, you have a set amount in mind that you need. The lender adds interest to that amount as a fee for allowing you to borrow the money. The more risk you pose to the lender than the higher the percentage of interest. A lender makes the decision on how much interest to charge you based on your credit score. The main amount that you would like to borrow is called the principal. When you obtain personal loans with good credit, the interest rate is lower.

If you have great credit, you can expect an interest rate from 3 percent to 6 percent, but if you have just ok credit, you can expect interest rates from 5 percent to 36 percent. That is correct, your interest rate can go up to 36 percent. Now, let me show you what that looks like with numbers.

If you have great credit and you want a loan for $20,000. The lender charges you 5 percent.

5 percent of $20,000 is $1,000.

The principal amount is $20,000 + $1,000 (interest) = $21,000.

If you have a loan for 36 months, that means your monthly payment will be $583.33.

If your credit is just ok, your interest rate might be 30 percent.

30 percent of $20,000 is $6,000.

The principal amount is $20,000 + $6,000 (interest) = $26,000.

If you have a loan for 36 months, that means your monthly payment will be $722.22.

If you have just average credit, your monthly payment goes up about $138 per month.

And how does the low income influence this equation? Well, as I have previously said, credit score is what influences the interest you get. Low income can only influence the amount you can get, since you cannot take out a large amount of money if you don’t have enough money to pay each month. But again, be aware of high interest when you have low income, and avoid these kinds of loans. If you have good credit, don’t be fooled into taking out a loan that will only make your financial situation worse.

Are There Different Types Of Personal Loans?

There are different personal loans with good credit available to you. There are traditional loans that you can obtain through a traditional bank, that you probably think about when you think about a loan. Those are the big banks that have an actual building that you can visit when you need help. You can also obtain a loan from a credit union. You can also obtain a loan from an online banker. In the past, online lenders where considered for those who have bad credit. That has changed and now all types of personal loan shoppers obtain loans online. Online lenders offer quick and easy application processing. You are able to upload all documents in the same place as where you fill out the application.

There are also secured and unsecured loans. A secured loan means that there is collateral associated with the loan. The typical type of secured loan is a mortgage or auto loan. When you have collateral attached to a loan, if you default on the lender, they can take the collateral. Unsecured loans do not have collateral attached to them, which makes them a bigger risk for lenders.

Do I Need a Proof of Income?

You always need to provide some type of documentation any time that you apply for a loan. You always must prove your identity to the lender. They want to make sure that you are who you say you are. In this world of fraud, lenders cannot be too careful when interacting with you. They must protect your identity as well as their data. Lenders may as for some type of photo ID, whether it is a driver’s license, passport, or military ID. It is important that your ID is valid and not expired.

Any lender wants to see proof of your income. They may want recent pay stubs or bank statements showing how much income you receive regularly. If you do not have a standard job and do contract work or some other form of self-employment, the bank may want to see your tax returns. The sooner you have all of these documents prepared and ready for the bank, the faster you can be approved. Lenders may also ask for some other type of document or may have additional forms for you. You should respond quickly to any and all requests. Failure to do so may result in your loan being delayed and even denied, even for personal loans with good credit

Do Personal Loan Companies Require Proof of Income?

Conclusion

I have shared a lot of information about personal loans with good credit. The key piece to obtaining personal loans with good credit is to make sure you can afford to repay the loan. It is important that you are able to make those monthly payments. When you are not able to make those payments, you are adding stress to your life and could potentially negatively impact your credit score. You should create a budget to make sure you are able to afford any loan that you plan to obtain. It is also important to save as much money and reduce as much debt as you can. Taking both of those steps will put in you a better financial position.

What Do Personal Loans Cost You: Interest, Fees and More

Posted on | by Julia Peoples

You may have some idea of what a loan is, but may not know much about the details. If you have never had the need for a personal loan, you may not know much more about personal loans other than you borrow money from a bank. If you are considering a personal loan, you may have a lot of questions. I plan to answer all of those for you in this article. I will address every aspect of a loan including personal loans cost, interest, and fees.

What Is A Personal Loan?

While it is important to understand personal loans cost, it is almost more important that you understand how a personal loan actually works. In the simplest description, a personal loan is when a lender allows you to borrow money. They attach a fee in the form of interest to the loan for allowing you to borrow the money. The lender can be a traditional bank, a credit union, or even a friend or family. You can also obtain a personal loan online. When the lender agrees to let you borrow their money, you are agreeing to repay the money. You agree to pay the money back by making regular payments for the term of the loan. The term is typically three to five years.

One key point I would like to make, and I will make it again, is just because you can obtain a loan does not mean you should. You should consider all of your options before applying for a loan. And you should make sure you understand the details of the loan agreement, including fees and interest. You should also make sure that you can afford those monthly payments. A loan is not free money. You have to pay it back and on time. I will discuss all of these points throughout this article.

Personal Loan Cost

If you are thinking about taking out a personal loan, you should know that you not only get money when you do that, but you also have to pay for that money. Sounds illogical? But that is the reality. So, you should be aware of how much the personal loan you get will actually cost you. This cost comes in different shapes and sizes such as fees, interest and more. So let’s get into all the important questions.

Do I Have To Pay Money To Get A Personal Loans?

In general, you do not have to pay money to get a loan. There is are personal loans cost associated with loans, however, rarely to you have to pay money to get money. At least, you should not be willing to give money to a lender to find out if you are eligible to get a loan. In most cases you want to obtain a loan because you do not have money to pay for something. It does not make much sense for you to pay money when you already are short on cash.

Some lenders do require you to pay an application fee to apply for a loan. I would recommend that you look for a loan that does not require you to pay this fee. There are many loans that do not have an application fee, so I am sure there is another lender that can meet your needs. Application fees can vary from $20 to $50 and are not refundable. That means that even if you are not approved for the loan, you will not get the application fee back. You must pay the fee before the lender will process your application.

What Fees Are Associated With A Personal Loan?

I mentioned above that there is a personal loans cost when you obtain a loan. The good news is for the most part is that the fees are added into your loan, so you do not have to pay it out of pocket. The bad news is if you need to borrow a set amount of money and you ask for that specific amount and then the lender takes money off the top. I can be a frustrating place to be. I will explain this in a little more detail and give you an example with numbers to make it easier to understand.

Each lender has some fee schedule for their loans. It is important for you that you read the fine print to understand the fees. A lender is legally bound to disclose all fees and penalties to you in writing. You should ask questions if you do not understand the agreement. There are a handful of fees you should expect from any lender. Loans have administrative fees that pay for the administration and paperwork processing of the loan. Administration fees may include an application fee. Some lenders tend to combine all of the various fees into one fee called the origination fee. This typically covers the application, running your credit, processing everything and paying out the money. The most important thing to remember is what I stated above, which is this fee comes out of your loan.

Let’s Look at an Example

Here is an example with numbers. This is just an example, these are not real numbers:

You apply and are approved for a loan of $5,000. The fees total $400. The amount deposited into your bank is $4,600. This is the amount you borrowed minus all fees. Keep in mind, you have to pay back $5,000. This can be a problem if you need the full $5,000. You should understand the fee schedule before you apply so you can ensure you borrow the right amount of money.

What Is Interest Rate?

When you borrow money, personal loans cost more than you realize. Lenders add interest to the loan as a fee for letting you borrow money. The interest the lender charges you is based on your credit score. The lower your credit score, the more risky you are to a lender and the higher your interest rate will be. Each lender gets to set their own interest rate, but there are many lenders available, so you do not have to take the first offer you find.

There are a few different types of interest rates of which you should be aware. There is a fixed rate loan, a variable rate loan, and a prime interest rate loan. A fixed interest rate loan means the interest rate remains the same throughout the loan. When you make payments in the early months, you are mostly paying the interest of the loan. Then, as you pay more of the loan, you start working on the principal. If you make any extra payments, that amount goes to the principal. This helps you pay off the loan faster.

Here is an example with numbers:

When you borrow $7,000 from a lender, the principal of the loan is $7,000. The lender adds the interest rate to that. It is a percentage, such as 10 percent, of the principal amount. A lender makes money from letting you borrow money by charging you interest. When you repay the loan, you are paying on both the principal and the interest. If you do not pay enough each month to pay the interest, then your debt will not go down.

A variable interest rate loan is exactly what is seems and it changes throughout the life of the loan. It changes based on the prime rate. The interest rate changes and then changes your payment amount. These loans are locked in for a set period of time. When that ends, the interest rate can change based upon the prime rate along with your payment amount. People tend to get into trouble with these types of loans because the interest rate can increase so much that the payment amount is no longer affordable. These loans are attractive because the interest rate starts lower than a fixed rate loan.

How Does My Credit Impact My Interest Rate?

Yes, as I stated above, your credit rate causes the lender to determine how risky it is to lend you money. Personal loans cost you money based on the percentage of your interest rate. They higher your interest rate means the more money you pay each month for your loan. When you have a low credit score, it can cost you more money in the long run.

When you have a credit score above 720, you are considered to have excellent credit. You can usually get a interest rate of anywhere from 10 percent to 12.5 percent. When your credit score is from 719 to 680, then you are considered to have good credit. That means your interest rate can go up between 13.5 percent to 15.5 percent. If you have average credit, your credit score falls between 640 to 679. When your credit is in this range, you can expect interest rates from 18 percent to 20 percent. Poor credit is when you have a credit score below 639 and then you find interest rates from 28.5 percent to 32 percent.

Now, let me show you in numbers how your interest impacts your monthly payment.

I will go back to the $7,000 you borrowed earlier. When you have excellent credit, your interest rate is 10 percent. That means you are borrowing $7,7000. If you repay the loan for 36 months, you pay $213.89 per month.

When you have average credit, your interest rate goes up to 20 percent. That means you pay $1,400 in interest, so the total amount you borrow is $8,400 and your monthly payment is $233.33. Your monthly payment goes up by $20. That may not seem like a large amount but when the dollar amounts are higher, the amount you pay per month is much more.

Are There Ways To Get A Lower Interest Rate?

There are a few ways that you may be able to get a lower interest rate when you are interested in a personal loan. If you can get a lower interest rate, you can lower the personal loans cost. You can get a co signer for your loan. This is a person that promises that you will pay the loan payments on time. If you do not make your payments, the co signer of the loan is responsible for making the payments. When you do not make payments and you have a co signer, not paying the loan can have negative impacts on your co signer’s credit.

You can decrease the amount of debt that you have, which will increase your credit score. You could also get a second job to increase your income, which lowers your debt to income ratio. If you get a second job, you are able to pay down your debt faster. When you are considering a personal loan, you should do loan shopping to find the best lender with the right rate for you.


Can I Improve My Credit?

Yes, you can improve your credit, but it take consistent work. It takes a long time to build up your credit, but it takes only a few missed or late payments to negatively impact your credit. Remember, that the lower your credit score means the higher interest rate that ultimately increases the personal loans cost. You should obtain a free copy of your credit report once a year. When you get your credit report, you should look at it for errors. If there is anything on it that is incorrect, you should have it fixed immediately. If you correct the errors on your credit report, it helps increase your credit score.

You should make every effort to pay all of your bills on time in the amount that is due. Late or missed payments are one of the top ways to cause a decrease in your credit score. When you make payments consistently on time, your credit score increases. You should also work hard to decrease the amount of debt that you have. If you are carrying too much debt, a lender will not approve to give you more debt. They do not want you to have a high debt to income ratio. They prefer it to be less than 30 percent. The best way to decrease your debt to income ratio is to increase your income or decrease your debt.

Are There Different Types Of Personal Loans?

There are different types of loans of which you should be aware. As a result, before you make a final decision on a loan, you should do some personal loan shopping. This helps you to ensure that you are getting the right loan for you. You should also take the personal loans cost into consideration when deciding on the right loan option for you. I mentioned above that you can get a loan from a traditional bank or online. You could also get a loan from a personal loan finance company. There are some things to consider when deciding between these options.

Traditional Lenders

A traditional lender gives you the ability to walk into a bank and have a person help you with your loan documents. If you want to have someone that is available in person to answer your questions, this is a better option for you. However, most traditional banks may not be as willing to work with you if you do not have perfect credit. However, you can have a conversation with a person to explain why you may have less than perfect credit. They may be able to offer you a lower interest rate.

Online Lenders

An online lender offers you convenience and flexibility. You can apply for a loan online from the comfort of your own home. And you can upload all needed documents in the same application. You often receive an answer in 24 hours and if approved, the money is in your bank account in about 24 hours after approval. An online lender may not have the lowest interest rate, but are more willing to lend money to those with bad credit. Here’s a list of credible lenders you should check out. You can even get offers from them in the next couple of minutes if you fill out this form below. If you get offers, you are not obligated to accept them, but it is a good way to see what are your options.

Other Not So Affordable Loan Types

There are a few other loan types of which you should be aware. They are loans from which you most likely want to stay away. There are some occasions when they work to your benefit, but I am not going to talk about that right now. They are payday loans and fast cash loans. These loans have really high interest rates. The loans are for low amounts and short periods of time. You typically have to repay the money in full in just a few weeks. In some cases all you need to provide is a pay stub to show how much money you earn per paycheck. The lender wants to directly access your bank account to take the money from your account on payday.

What Are Secured Loans?

In addition to being able to obtain different types of loans from different lenders, there are some different kinds of loans. The most common kinds of loans are secured and unsecured loans. Depending on which of the two kinds of loans you have it may make a difference in the personal loans cost.

A secured loan is a loan that has collateral associated with it. Collateral is anything of value that can be an asset to the lender. In the event that you miss a payment, the lender can take the collateral in place of your loan. Most of the time, a mortgage is a secured loan and your house is considered collateral. An auto loan is also a secured loan because the vehicle you are buying becomes the collateral. Having an asset attached to your loan typically gives lenders the incentive to provide you with a lower interest rate. The collateral gives the lender more security when providing you the loan.

Most personal loans are considered unsecured loans and do not require collateral. This is riskier for the lender and as a result has a higher interest rate. Most of the time the personal loans cost is higher on an unsecured loan.

Are There Alternatives To Obtaining A Personal Loan?

There are some alternatives to a traditional loan that you might want to consider before obtaining a loan. Keep in mind that while personal loans cost something, these alternatives may have a cost, also. Depending on how much money you need, you could consider using your credit card to pay the bill instead of getting a loan. This may be a better route for you to go if your credit card has 0 percent interest. If you pay off the full amount during the promotional period, you will pay less money than if you obtained a personal loan.

You could consider peer to peer (P2P) loan. These types of loans are found on P2P sites that offer crowd funding. This allows you to borrow money from people instead of institutions. Many of these sites are geared towards those who have less than great credit. You may also be able to find lower interest rates on these sites. Depending on why you need the loan, you could consider a government loan. If you need a loan for higher education, you could get a federally subsidized loan that has lower interest rates and more flexible policies.

Will A Budget Help Me?

A budget is always helpful. If you do not currently have a budget, then you should create one right away. There are many benefits to having a budget. In the most basic definition, a budget is the understanding of your income and balancing your expenses. A budget gives you an understanding of how much money you spend each month and in what categories. There are many different types of budgets. The easiest one is when you list all of your income in one column and then add all the numbers in the column together. In the next column, list out all of your expenses. Do not skip over any of your expenses. Remember to list them all. If you want to create a complete budget, you have to be honest about all of your expenses.

You subtract your total expenses from your income and hopefully you have a positive number. You know that personal loans cost you money each month. When you create a budget, you can assure yourself that you can afford to make that monthly payment. The number you have left is how much you can afford to pay each month for your loan. If you have a negative number, that means that you cannot afford a loan and you should not even consider a loan. The worst thing you can do for yourself is to obtain a loan if you cannot afford to make the monthly payments.

Should I Save Money?

If you have a negative number after creating a budget, that means you need to make some adjustments to your budget. Even if you do not have a negative number, you probably still need to make some adjustments to your spending. I have mentioned this throughout this article, but personal loans cost you money. As you are creating your budget, you should keep in mind that you need to take control of your spending and make cuts where needed.

I want to talk to you about spending cuts for a moment. I know, you do not want to cut any spending. The reality is you probably have to make some adjustments. There are few of us that have a large enough income to support all of our spending and saving. Many of us have to make tough choices when it comes to saving more money. Since we already know they are going to be tough choices, you have to decide what you really want. You have to decide if you want to save more money. You have to make the choices based on what you really want because when it gets hard, you need to remember why you are making the hard choice.

There are a couple of easy ways to begin saving money. The first is have money deposited directly into your savings account with each paycheck. This way it happens automatically and you never see the money. The money never goes into your checking account and it is easier to pretend you do not even have it. Next, you can cancel and remove all of those items that you do not use. Think about that gym membership that you are not using and cancel it. Remember,  personal loans cost you money. So, save some money now but cutting expenses and you may not even need to obtain a personal loan.

Conclusion

There are many other ways you can begin to save money. That is for another article on a different day. This article is about personal loans cost and how to reduce that cost to you. The best way I can think of is to not obtain a personal loan. Sometimes, we find ourselves in positions where we need a loan. That is ok. Do not beat yourself up for being in that position. Instead, educate yourself and find out all the information about the cost of personal loan so that you can make an informed decision. When you know as much information as possible, you can feel secure that you are making the best decision for yourself at this time.

11 Important Things to Consider About Personal Loans

Posted on | by Julia Peoples | Leave a Comment on 11 Important Things to Consider About Personal Loans

Personal loans are often a sticky subject. Most times, you need money fast to purchase an item, or to pay off a bill. That does not leave you with a good feeling. Thus, you have come to dread consumer installment loans. I can understand that needing a loan is not always a good thing. Sometimes, a personal loan can help, but not always. Obtaining a personal loan may be a good thing if you use it properly. The key is to make smart financial decisions and use credit wisely. Continue reading to find out all the things to consider about personal loans. Understanding these 11 things helps you make smart financial decisions and keeps you from drowning.

Things to Consider about Personal Loans

As anything related to finance, personal loans are complex. But not so complex that you cannot have a high understanding of them. As a matter of fact, I cannot stress enough how important it is that you fully understand personal loans before you decide to get them. If you have absolutely no idea, you should start from the basics. And this is what we’ll do right now. Besides this, we’ll also get into some details, so you can fully understand this financial concept.

Number 1 – What Is A Personal Loan?

Since we are talking all things to consider about personal loans, it is important to truly understand personal loans. I am going to give you a basic breakdown of loans and dig in a little deeper throughout this article. A personal loan is money loaned to you by a financial institution. You promise to repay the money by making regular monthly payments for a specified amount of time. The financial institution can be a bank, credit union, online lender, or even family and friends. The amount you repay per month is static, so it typically does not change. There is interest added onto the money you borrow. That amount varies based upon your credit score.

There are typically fees associated with a personal loan. It is important that you read all the fine print and understand what you are signing. This is a contract you are binding yourself to and you should not enter it without thought and consideration. Lenders expect you to repay the loan and you give your word you will. I know it is easy to get lost in all the details of a loan agreement, but it is important that you understand it. There are implications if you do not pay the loan timely. If you do not understand your agreement, you may find yourself in default.

Number 2 – Different Types Of Personal Loans

When thinking about borrowing money, some more things to consider about personal loans are the different personal loan options. As I mentioned, there are different types of lenders. You can borrow from a personal loan finance company or online lenders. Honestly, you can borrow money from just about anyone. Always make sure you have some type of binding contract. This protects you just as much as the lender.

When you think of a personal loan, the first type that comes to mind is one from a well-known bank. Today, online banks are a huge part of lending money. In the past, online loans were for those with bad credit, but that is not the case anymore. Online loans are fast and easy. You apply and submit all documents online. You receive a response in about 24 hours. If approved, the money is in your bank account in less than a day. Interest rates tend to be a little higher, but that might be worth it to you for the ease of applying.

There are also fast cash loans and payday loans. Be careful when it comes to these types of loans. They are a quick way to get small amount of cash. They have high-interest rates and short repayment schedules. If used properly, they can help you through a time when you are hurting for cash. However, if used poorly, they can only hurt you, your financial outlook and your credit. If you do not pay them back on time, you get hit with large fees. If you know for sure you can pay the money back on time, it may be a good temporary solution. These types of loans should not be used as a permanent fix and should not be used often.

Number 3 – How Can I Get A Personal Loan?

One of the first things to consider about personal loans is which one is right for you. There are many different lenders out there, but they may not all fit your needs. It is on you to do some research. I realize this may not be how you want to spend your time, but it could save you money. There is so much information available to you online, a few searches should produce the information you need.

Remember, lenders have different fees and interest rates. If you get a loan from the first lender you come across, you could spend more money than you need. It important that you educate yourself. Banks are not going to do all the work for you, no matter how friendly they seem. Remember, they are in the business to make money. I am not trying to paint banks in a negative light, just reminding you that you need to arm yourself with information.

It is important to understand how much money you really need. Remember, this is not free money. You have to pay it back. The more money you borrow means the more money you repay. Only borrow what you need. Do not think ‘oh, it would be really nice to get a new TV’ and add that into your loan. There may be better ways to pay for a TV other than a loan on which you are paying interest. Focus on your goal for borrowing the money. Do not get sucked into thinking about all the things you want to buy.

If you’re thinking “Oh my, this process sounds incredibly daunting!”, we agree. Another thing you can do is let Loanry try to help you. We partnered up with Fiona to bring you the best lenders for your needs. All you need to do is enter your information and see whether you could be paired up with lenders which may make you an offer.

Number 4 – How Do I Apply?

Knowing how and where to apply for a loan definitely falls into the things to consider about personal loans category. Believe it, or not, this is the easiest step when it comes to personal loans. I remember a time when applying for a personal loan meant going into the bank and sitting for what seemed like hours. You had to sit in one of those uncomfortable chairs and wait for someone. You hoped that you did not see anyone you knew. Finally, someone became available and then the tedium of filling out the form, which was on paper. Then it seemed to take weeks before you got a phone call telling you if you were approved.

Thankfully, those days are long gone. Now, you can go online and fill out a loan application. Most banks, even the big ones, have the ability to apply online. They may call you and gather more information, but you probably will not have to go into the bank. If you prefer to talk to someone in person, you can still go in and handle your business. Banks are more comfortable and friendly now. So, once you are so you want to apply for a loan. After you do your research to find the right lender for you, applying for a loan can take only minutes.

Number 5 – What Role Does My Credit Play?

It always seems to come back to your credit, right? And yes, that is true. Your credit makes a difference when it comes to loans. Honestly, it makes a difference in just about everything. That is why it is important to protect it. Your credit is absolutely one of those things to consider about personal loans.

A credit score is a three-digit number that prominently appears on your credit report. Your credit report is a list of your entire credit history, including payments and credit borrowed. Any late payments you made are on your credit report. If you have not paid a bill, guess what? It is on there, too. Your credit score is an indicator to lenders. It tells them how risky it is to lend you money. It tells them how likely you are to repay money you borrow. The lower your credit score, the more of a risk you are to lenders.

It is important for you to pull your credit report to see what is on there. If there are errors, you can correct them. It also informs you what lenders know about your credit. It gives you a place to start when trying to repair your credit, or get a loan. You can get money loans for bad credit, but it may be harder. You’ll have to do more work to get a loan. You end up paying more money because your interest rate is going to be higher.

Number 6 – Interest Rates

So, about those pesky interest rates…another one of those things to consider about personal loans is interest. Sometimes, the interest rate on a loan breaks you. It can change a loan from something you can afford to something you are crazy to consider.

Stay with me while I dig deeper into interest rates. This is information that is important for you to understand. There are two types of interest, fixed and variable. A fixed rate is just that, one that is fixed and does not move. A lender calculates this type of interest based on your credit score and adds it to the principle. Interest rates can vary from 8 percent for great credit to 30 percent for poor credit.

Below I highlight the difference in numbers:

Good credit = 10 percent interest on a loan for $10,000

10 percent of $10,000 – $1,000 of interest

$10,000 (principle) + $1,000 (interest) = $11,000 loan

$11,000 divided by 36 months (repayment period) = $305.56 per month

Poor credit = 30 percent interest on a loan for $10,000

30 percent of $10,000 – $3,000 of interest

$10,000 (principle) + $3,000 (interest) = $13,000 loan

$13,000 divided by 36 months (repayment period) = $361.12 per month

Your monthly payment went up almost $60 per month simply because of your credit.

Variable interest is an interest rate that changes based on market changes. Typically, variable interest starts lower but most likely climbs higher before the end of your loan repayment. A loan with a variable rate is often reassessed every 6 months and adjusts based on the market. Sometimes, it goes down, but it often goes up. Be careful when considering a loan with a variable interest rate.

Number 7 – Fees

Other things to consider about personal loans are the fees associated with loans. Every loan has some type of fee schedule. It is important that you read all of the fine print to understand the fees. A lender must disclose all fees and penalties to you in writing. It is your responsibility to read and understand them. If you do not understand, you must ask questions until you do. It is on you to protect yourself when it comes to understanding the documents you sign.

There are a handful of fees you should expect. An application fee is something a lender charges simply for you to fill out the application and run a credit check. While these fees are often inexpensive, they are a waste for you. They add up quickly, if you decide to apply for many loans. You do not get your money back if your loan is denied. If a lender charges you an application fee, you should find a different lender.

Loans have administrative fees. These fees pay for the administration and paperwork processing of your loan. Administration fees may also include an application fee. Some lenders combine all of the different fees into one large fee called an origination fee. This typically covers the application, running your credit, processing everything and paying out the money. The most important thing to keep in mind is this fee comes out of your loan. You do not have to put out any cash, but you do not see the full amount of your loan.

Here is an example:

You apply and are approved for a loan of $2,500. The fees total $300. The amount deposited into your bank is $2,200. This is the amount you borrowed minus all fees. This can be a problem if you needed the full $2,500. You should understand the fee schedule before you apply for your loan so you ensure you receive the amount of money you need after all fees.


Number 8 – Documents

You have decided to take the plunge and apply for a loan. Before you so, more things to consider about personal loans are the documents you need. You need to prove your identity. In today’s world, banks cannot be too careful about verifying your identity. Identity theft is rampant, so banks need assurance you are who you say you are. They require picture ID, such as a drivers license, passport, or military ID. This identification must be valid and not expired.

Banks also need to know you can repay the loan. Your income is a large factor in this. You must provide proof of your income to the bank. They may want recent paystubs or bank statements showing how much income you receive regularly. If you do not have a standard job and do contract work or some other form of self-employment, the bank may want to see your tax returns. The sooner you have all of these documents prepared and ready for the bank, the faster you can be approved.

A lender may ask for some other type of document or may have additional forms for you. You should respond quickly to any and all requests. Failure to do so may result in your loan being delayed and even denied.

Number 9 – What Is Pre Approval?

Many people often wonder about pre-approval when thinking about things to consider about personal loans. The reality is that not many people understand what pre-approval really is. To complicate matters, you probably heard the terms pre-approval and pre-qualified. Many lenders use them interchangeably even though they really are not the same thing.

A pre-approval means that the lender has done a hard pull of your credit and taken a good look at it. As a result, the lender believes you are a great candidate for a loan and offers you a pre-approval letter. This letter basically gives you a belief that you can receive a loan with the lender. A pre-approval does not guarantee you an interest rate or monthly repayment amount. The bank may be able to give you an estimate but often you do not lock into a rate until you apply.

A pre-qualification is a little different. The lender has to a soft pull of your credit and made a cursory glance at it. From the quick look, the lender thinks you are a good candidate. This is not a guarantee and you still need to go through the entire application process for approval.

Number 10 – Budget

Your budget is absolutely one of those things to consider about personal loans. Not many people like to talk about a budget, but it can change your life. Creating a budget puts you in control of your money and your spending. Often people see a budget as a limit to your life and spending, but it really is not. It helps you regain control of how you spend your money. It allows you to spend money on the things you really want and need instead of random things you do not even realize.

You should sit down and list out all the items on which you spend money. Prepare to be shocked. You most likely spend money you do not even realize. You probably spend more money on random things than you know. When you write it all down, you can take a hard look at it and remove those extras. This is the time to end that gym membership you do not use. Are you paying for subscriptions you do not use? Now is the time to cancel them.

Once you have slashed all those items you do not use from your spending, now you can look at where else you spend money. You can compare it to your income and begin to make changes. It may be hard at first, but once you see all your savings, it is worth it. You can decide whether you will budget or get a personal loan. You may decide that you save enough money and you do not need a personal loan. Or you may see that you really cannot afford to repay a personal loan and decide to make some changes first. Creating a budget puts you in the driver seat to make decisions instead of feeling like things are out of control.

Eight key steps to creating an effective budget

Number 11 – Do I Need Collateral?

A personal loan is typically an unsecured loan. This means that there is no collateral associated with the loan. This is a risky loan for a bank because there is nothing to hold you to repayment. Collateral is something of value that you offer to the lender as a promise to repay the loan. If you do not repay the loan, they can take the item. A mortgage on a house is a perfect example of a secured loan with collateral. You and the bank own the house together. As long as you repay the mortgage, the house is essentially yours. Once you repay the mortgage, the house legally becomes yours. However, if at any point during the mortgage repayment, you do not pay the loan, the bank can take the house.

If the bank is requiring collateral from you, it means that you have poor credit and they do not want to take the risk. When thinking about things to consider about personal loans, you can decide if you are willing to put up an item as collateral, or if you want to work on repairing your credit. Repairing your credit is possible, but it takes consistent and hard work. It may be something you should consider.

What Does It Mean To Default On A Loan?

One of the major things to consider about personal loans is can you afford it? This is one of the first things to consider about personal loans. If you cannot afford to repay the loan, you should not apply for one. The last thing you want to do is default on a loan. Defaulting on a loan means you are not paying the loan. This often happens when one cannot afford to repay it. You want to do everything you can to avoid defaulting on a loan.

Defaulting on a loan is a huge negative hit to your credit score. It causes it to plummet. In addition, defaulting on a loan is incredibly stressful. Lenders want their money and they work hard to get it. This could mean they send you to a collections company. These companies are ruthless. They do not care about you or your situation. All they want is to get money. The lender may take you to court to get their money.

There are ways to prevent yourself from falling into default. If you realize that you cannot repay the loan, contact the lender before you miss payments. Lenders often work with you to change your payment schedule or payment amount so you can pay something. Lenders want their money and if they can get something from you, it is better than the cost of having to fight for it. Be upfront with your lenders sooner rather than later. It is better to try to work with them than against them. They have more resources than you do and they often win.

Conclusion

We talked about many things to consider about personal loans. There is one last thing I want to take the time to highlight while I still have your attention. That is your ability to afford a loan. Of all the things to consider about personal loans, that is the most important. If you cannot afford to repay the loan, do not apply for one. Look for other options before you dig yourself a deeper hole.

Taking on a loan that you already know you cannot afford is just a bad idea. All it does is hurt your credit and put you in a stressful situation. A loan is not free money. You must repay it. Even though it is money upfront and may feel like it is giving you some breathing room, it is only temporary. In a month, you must start to make payments. Enter into a loan wisely and thoughtfully.

9 Popular Lenders Offering Personal Installment Loans

Posted on | by Brandy Woodfolk | Leave a Comment on 9 Popular Lenders Offering Personal Installment Loans

Loans can be an extremely helpful tool to change your financial situation. That is, if you choose a good loan and handle it responsibly. Otherwise, the loan can make your financial situation even worse, and that is not what anyone wants. Personal installment loans are often one of the best loan options to choose if you meet the requirements. They can do a lot for you without breaking the bank. In this article, we are going to learn how they can help you, how they can hurt you, what you might need to apply, 9 popular personal loan lenders, and more so you can make an educated choice.

What is a Personal Installment Loan?

A personal installment loan is pretty simple to understand. In fact, they might be the most straightforward type of loan available. You likely know that the word installment means doing something in multiple steps or phases. That is how a personal installment loan works.

If you are approved, the lender will give you the full amount of the loan upfront, minus any fees. Then, you repay the loan in multiple payments, or installments. The payments are set, scheduled payments that are determined by calculating the interest, adding it to the total, then spreading it over the length of the repayment term.

In another words a $1,000 loan with a 10% interest rate would cost the borrower a total of $1,100 ($1,000 loan + $100 interest). If the repayment term is 12 months, payments would come out to $91.67 per month. After your 12th payment, the loan, any fees, and interest is repaid.

9 Popular Personal Loan Lenders

There are many lenders that exist, and they are from all over the place. If it would be possible to line up every lender that exists, it would appear never-ending. That is because there are numerous people who need loans and numerous people willing to make those loans. This can be a great thing for borrowers as they have so many options.

On the flip side, too many options can be terribly overwhelming. Have you ever stood on one aisle in a retail store trying to choose which cereal, crackers, pizza, deodorant, or any other item they sell? I have, and I can say that it is not enjoyable. Overstimulation can cause the brain to shut down.

We want to help you prevent that. So we put together a list of nine popular personal loan lenders for you to consider. They offer personal loans online to make it simpler to apply. There are options here for different credit scores and types.

Lending Club
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Lending Club is a peer-to-peer lending service and is a favorite among many. The requirements are a bit difficult for a lot of people, though, as the minimum credit score is 600. The trouble is that at any given point in time, between 1/3 and ½ of American citizens have credit scores lower than that. You also need a credit history of at least 3 years and a debt to income ratio of 40% or less.

They do have loan amounts that range from $1,000 to $40,000 with interest rates ranging widely between 6.95% – $35.89%, and repayment terms run 3 to 5 years. There is usually a loan origination fee that is 1% – 6% of the loan total. If you happen to run into some trouble paying your loan due to some extenuating circumstances, you might qualify for their hardship plan. Overall, if you qualify for Lending Club, it is a good loan option.

Prosperprosper

Prosper is another peer-to-peer lending service that requires a pretty good credit score- 640 or higher. They also require that there be less that seven credit inquiries for the last six months, and a debt to income ratio of 50% or less. You can borrow between $2,000 and $35,000 with interest rates from 5.99% to 35.99%, and repayment terms of up to five years. There are no prepayment fees, but there is a origination fee of up to 4.95%. If approved, it takes some time to receive the money so it is not a good option for an emergency loan.

Kwikcash

Kwikcash is another highly ranked option for our selection of the 9 popular personal loan lenders. They have very limited requirements for credit score and offer a wide spectrum of personal loan products. Loan amounts range from $500 to $3500 depending on your state of residence. The lowest rates and higher loan amounts are reserved for customers with excellent credit. On the other hand, they also have an available hardship plan, and receiving your loan is a fast process. Kwikcash is known for their integrity and have been ranked with 4.5 stars by trust pilot. 

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Avant’s qualification requirements are a little less stringent. They accept credit scores as low as 580, and they require that you have at least $20,000 in gross income. The loan amount options range from $2,000 – $35,000 with interest rates ranging from 9.95% to 35.99%. The repayment terms range between 2 and 5 years. There is an administrative fee of 4.75%. However, there are no prepayment fees and they offer a refinancing option.

OneMain FinancialСродна слика

OneMain Financial is less stringent when it comes to approvals. There is no stated minimum credit score, minimum credit history, or minimum annual income requirements. It seems to be based on case by case. The loans range from $1,500 to $20,000. A huge downside is the interest rates that start at 18% and go up to 35.99%.

There may be an origination fee according to your state, and available repayment terms are 2 – 5 years. It earns its place as one of the popular personal loan lender. It is because it provides fast funding and gives some who have no alternative a chance. Additionally, they are online and have physical locations.

OppLoans Personal LoansРезултат слика за opp loans

OppLoans has no specified minimum credit score required. They do require that you have a bank account that has been active at least 40 days, a minimum monthly gross income from employment or benefits, and have your pay on direct deposit. If you are self-employed, they will not consider you.
Available loan amounts range from $500 to $5,000. The APR is ridiculously high, ranging between 59% and 199%. However, as there requirements are not quite so stringent, they make loans more attainable. That fact keeps them as on of the popular personal loan lenders.

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SoFi is the next lender on the list, but it is definitely for those with higher credit score. Applicants need a score of at least 680, though I was not able to find any income requirements. Loans amounts range from $5,000 to $100,000 with APR from 5.99% to 16.99%. Repayment terms range from 24 – 84 months. The interest rates are great for those who qualify.

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If you have a credit score of at least 620, an annual income of at least $12,000, and less than 45% debt to income ratio, Upstart might approve you. In fact, they consider borrowers that are completely new to credit. They offer loans ranging from $1,000 – $50,000, APR from 7.69% to 35.99%,  and repayment terms from three to five years. There is a possible origination fee of up to 8% and a late fee if you miss your payment date. Once approved, funding goes through rather quickly.

RISE Personal LoansРезултат слика за RISE personal loans

If the other popular personal loan lenders do not work out, you might consider a RISE personal loan. They are for those with bad credit. So there really is no set minimum credit score, at least not that is shared. I was also not able to find any minimum income requirements. However, the loan amounts range from $500 to $5,000 with an APR of 5.99% to 16.99%, and repayment terms up to 26 months.

If you’re thinking about finding a credible, trustworthy lender, Loanry can help you. Put in your information below and see if you will get any offers from potential lenders.

What Popular Personal Loan Lenders Want to See

What does it take to get approved for a personal installment loan? The truth is that there is no formula to use that will let you know if you will get approved, and that is a good thing. Every person is unique and so is their financial situation. You do not want to be judged for someone else’s financial mishaps.

At the same time, though, it can be a little frustrating to have no straight answers here. I remember a time that we wanted to get approved for a mortgage loan, but the lender said that they could not approve us at that time. The representative said, “If you could just open a couple of accounts, wait a few months, get some payments going, then maybe we can approve you.”

Maybe? Some? A couple? A few?  When I asked the loan representative for some more information, she said, “Well, I can’t really give you specifics, but if you work on those things, you’ll probably get approved.” Thanks for the clarity. Without specifics, though, you might still be able to get a basic idea of whether you will be approved. There are a few common factors that lenders look at to determine if you are too risky to loan money to. These are the following:

-Credit Score/FICO Score

Different popular personal loan lenders require different credit scores. I can say that the lowest accepted credit score I have seen is about 530, but that does not mean that some popular personal loan lenders will not work with less. Do not let a low score keep you from applying for loans because you really never know what will happen until you try.

FICO Score Factors

-Credit History

In order for a person to get a good feeling of your propensity to repay, they will popular personal loan lenders will analyze your credit history. They pay attention to how much you have borrowed in the past and how much of that you have repaid so far. Getting a loan with good credit is not as problematic as when your credit history is not great. The type of debt that makes up your credit mix is also important.

One way to help you keep an eye on your credit and determine what needs to be changed, you might use a free service such as Credit Karma. The company alerts you of any changes to your credit. They also tell you what steps you need to improve it.

-Debt to Income Ratio

Popular personal loan lenders want to know that you have enough money coming in to make your payment, so they check your debt to income ratio. This is basically a comparison of how much you have coming in, to how much you have going out.

If they are too close to one another, you will likely be denied for the loan. You can calculate yours by adding together all of your debt and monthly bills, then divide it by your gross monthly income (before deductions). A good debt to income ratio is about 35% or less.

-Income

I am going to go ahead and say that if you do not have some sort of income coming in, lenders probably will not loan you any money. If you are out of work injured or sick for a short time, or some other extenuating factors occur, they may still consider your application. However, if there is no money coming in now or in the near future, it is safe to assume that you probably will not get approved. Lenders loan you money with the intention of getting it back. Someone with no income is too much of a risk to a personal loan finance company.

-Collateral

If it is a secured loan, they will want to assess your collateral. As it is intended to be used to recoup losses in case you do not pay, lenders want to know that the collateral you are offering is valuable enough. If you have multiple assets that are valuable enough to use as collateral, try using the one that would affect your life the least if it is gone. You need to do all that you can to repay your loan, but if something goes wrong, you do not want to lose your most valuable asset. Bottom line is it can help those with collateral but prevent others from getting approved.

Pros and Cons

Pretty much everything in life has ups and downs. The key is in finding things in which the good outweighs the bed. Depending on your individual financial state, a personal installment loan can help you in many ways, but you have to understand the downsides before you jump in head first.

The Pros of Personal Installment Loans

It can definitely help you improve your credit if you are responsible with the loan. By making your payments on time, your score will increase – barring other negative things hitting your credit at the same time. Additionally, opening a loan should improve your credit mix.

You typically get much lower interest rates than you do with any other loan. While other loan types come with really high interest rates, you can find personal installment loans with interest as low as 3.99%. The lower your interest on a loan, the easier it will be for you to pay it off- which is the end goal.

The interest is fixed and added to your payments. With a personal loan payment, the interest is typically calculated at the beginning of the loan, added into the loan payment, and spread out over the entire payment term. There is no paying separate interest because the loan payment you make each month includes the interest.

You know what you owe every month and how long you must pay. With personal lines of credit, credit cards, and any loans with variable interest or interest that are calculated monthly, you do not know for sure what you will be paying that month until you get your bill. That makes it extremely hard to add into the budget.

With a personal installment loan, however, you know exactly what is due each month. When you first get the loan, you will know what your monthly payments will be. Generally, it will be stated in your contract. Since you know what your monthly payments are, you can much more easily make a plan for repaying it.

The Cons of Personal Installment Loans

It can destroy your credit if you are not responsible about it. As much as a personal installment loan can improve your credit, it can just as easily destroy it. Actually, it can probably destroy it much more easily. Diligence, persistence, and a sense of responsibility can play a huge role in getting your loan payments paid, but you cannot control everything.

If an external force, i.e. job loss, eradicates your ability to make your loan payments, you might find your credit torn to pieces. If a situation such as this occurs, immediately call your lender and explain the situation. Often times, they will try to work with you so you can stay on track. They would much rather you pay than to have to chase you down or sell your collateral. All of that is extra work on them, and it is not free. Also, they want to keep you as a customer. The more you borrow, the more interest you pay. If you do not repay your loan, they lose a customer, so working with you is in their best interest and yours.

The earlier you call them, the better. Waiting until five minutes before they close on your payment due date when you lost your job three weeks ago is not going to look very good. If the lender does work with you, do not take advantage of it. Be grateful and make your payment as soon as you can. Eventually, they will be forced to take action.

They are often harder to get approved for. Other loan types can usually be approved much more quickly than any other. Personal installment loans often have requirements that many people cannot meet. The first ones are obviously credit scores and credit history. However, there are also income requirements, debt to income ratios to meet, and, sometimes, free cash flow minimums.

It is tempting to take more than you need. If you need $1,000 for car repairs but find out that you can get up to $5,000 with your credit score, what would you do? Those with really strong will power might be able to say, “No, thanks. I just need the $1,000.” Many others would be tempted to go for the higher loan. I know that my mind would immediately start calculating how much that $5,000 could do for my family, and I would have a hard time turning it down.

That might be okay if you can use it to put yourself in a better financial state, i.e. consolidate your debt so you owe less monthly. It is not okay if you take the full amount out, blow it all, then not be able to make your rent or mortgage payment next month. If you are going to take the full amount, be sure that you use it to help you and that you can afford the payments.

There are sometimes fees attached to them. With many of the popular personal loan lenders, you can expect fees. The most common ones are origination fees, late fees and returned payment fees. Some charge prepayment fees, so be sure you check on that before accepting a loan.

You may need some form of collateral. Depending on your credit, a lender might require some form of collateral from you. This is called a secured loan. Collateral might be a car title, property deed, or any number of things. The idea is that if you happen not to pay the loan back, the lender can recoup some of the losses with your collateral. It makes you less of a risky investment. And sometimes it will help you get a little more on your loan.

If you are asking how any of this is a con of a personal installment loan, I’ll tell you: not everyone has collateral. Secured loans are okay for people who have available assets, but not for those who do not. What about the people making car payments or renting their home? Some lenders may accept other forms of collateral, such as music equipment or electronics, but not all.

When Should You Get a Personal Installment Loan?

How do you decide when to get a personal installment loan instead of any other loan or using your credit card? It is actually pretty simple. Personal installment loans give you larger amounts and longer repayment terms than most others. As stated previously, your total amount is spread out and interest is added into those payments. Additionally, interest is calculated once, not monthly.

Credit cards, on the other hand, calculate interest monthly and continually add it to your bill. Getting out of credit card debt can be an excruciating process because of this never-ending interest. Quick-term loans, payday loans, title loans, and other high-interest options are the same. So if you need large amounts of money or a long time to pay, you should get a personal installment loan.

In my personal opinion, if you qualify for a personal installment loan, I would always go for that. Most popular personal loan lenders start with loans as low as $500, but I have gotten them for as low as $100 in the past. This is beneficial because you do not have to take large amounts out.

Some people, though, prefer (or it is their only option) to go through much more expensive lenders for small loan amounts because they can repay them so quickly. Others think that they could never get a better loan, so they immediately go to high-interest lenders for title loans, payday loans, and so on. Before you make that decision, understand that going through a company like that is not helpful if you cannot pay it off in that first month. After that, the interest will begin costing more than the loan and you will find that you have paid out hundreds in interest for a measly $100 loan.

If we are referring to large amounts, you should really aim first for a personal installment loan. It may seem like you cannot qualify for a loan with decent rates, but do not write yourself off just yet. If you can work patiently and diligently, you should be able to find a personal installment loan to help you cover your needs.

 

Where to Get a Personal Loan with Bad Credit

The beauty is that there is a loan out there for almost every credit score and financial situation. But it can be difficult to figure out where to get a personal loan with bad credit. The trouble is that lower credit scores tend to produce higher interest rates. It does seem to be easier to find a lender online if you have bad credit.

Whether applying online or in person, do not take the first offer you receive. I know that you probably just want to get over with the whole thing, but not shopping around can be a big mistake. There is often a loan with better terms out there. At least get two or three offers before deciding. By that point, you should have an idea of the types of terms your credit can get you.

Handle the Loan Responsibly

After receiving your loan, you need to be responsible with it. Use it for the purpose you got it or you might put yourself into a worse position. For instance, if you intended to use the loan to consolidate your debts but you decide to go shopping or buy a new car instead, you have done nothing more than added a new debt onto yourself.

Some of you may be asking who would do something like that but believe me when I say it happens. Think about it: Imagine a person struggling for a long time and gets a loan to help himself or herself. Suddenly, there is money in their hands. It is not unusual that the temptation is too strong to ignore. Really, it is not as crazy as it seems.

It is also important to add your loan payment to your budget immediately. Do not put it off until later because later rarely comes. Add it to your budget as quickly as you can so that you don’t find yourself without your payment money on your due date. Otherwise, you might find yourself back in the hole you just dug yourself out of. Creating a budget means including everything in it, so don’t skip this step.

Conclusion

Personal installment loans are a great loan option, and most people can find a lender if they are diligent in their search. Searching for personal loans online tend to be the easiest method, unless you are a community credit union member. Credit unions love helping their members and community, so always check in with them as well. Otherwise, settle down with a cup of coffee and enjoy the ease of applying online for a personal installment loan.

Debt Consolidation Loans for All Types of Credit

Posted on | by Julia Peoples | Leave a Comment on Debt Consolidation Loans for All Types of Credit

We have all seen bad times when we are in a bad financial place. Sometimes, it comes out of no whereas some emergency that was not expected. It could be medical bills or some major household expense that just was not planned. No matter how it happens, we all have found ourselves in that position. It is not fun and it takes work to get out of it. Fortunately, we can always turn it around and there are some tools to help us. There are many different types of personal loans available, but that may not be exactly what you need when you are already drowning in debt. Debt consolidation loans may be a better option for you.

There are different ways to go about debt consolidation regardless of the type of credit you have. Continue reading to find out more about how to consolidate your debt no matter what your credit score is.

What Is Debt Consolidation?

I like to start with basic information so that I know everyone has a basic understanding. I am going to give you some fundamental information about debt consolidation loans so that you can make informed decisions. Debt consolidation is a way for you to regain control of your debt and your money. When you consolidate your debt you are taking multiple different bills and merging them all into one larger monthly payment. You can do this on your own, or you can work with a debt management company.

A debt management company may also be referred to as a personal loan finance company. This is a great way to pay off any credit cards that have high-interest rates. Often, you are able to get a debt consolidation loan that has a lower interest rate than those credit cards.

There is a process that you should follow if you are interested in consolidating your debt. Understanding the process of debt consolidation is equally as important as understanding the basic terms. I am going to outline those steps for you later in this posting. Stick with me as we travel through all the things you need to know about consolidating your debt no matter your credit.

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

Advantages to Debt Consolidation

There is a lot of information about debt consolidation loans available for you to read. Unfortunately, some of it is speculation and opinion. I am going to give you the real truth about the benefits to consolidating your debt.

The biggest advantage to consolidating your debt is taking multiple monthly payments and combining them into one large payment. This is helpful from a mental perspective because it is easier to wrap your thoughts around one payment. You only have to worry about paying one bill instead of multiple bills. Since you are focused on one payment, it is easy for you to determine if you can pay more each month. This can help you pay off your debt sooner. It is common to feel overwhelmed by bills and debt when you have to make multiple payments.

Also, consolidating your debt can help you improve your credit score. One of the most common reasons a credit score drops is due to late or missed payments. If you are only making one payment, it is easier to make sure you pay that bill on time and make the full payment. As you decrease your debt, you are improving your debt to income ratio. Even with these advantages, you should seriously consider all factors when determining if you should consolidate your debt. Do not take this step without careful thought and consideration.

Disadvantages to Debt Consolidation

As with anything, there is good and bad to debt consolidation loans. Much of it depends on how you use it. I am going to list all of the possible disadvantages to debt consolidation so that you can have all of the information.

Often times, debt consolidation loans come with a high-interest rate. This is especially true if you have less than perfect credit. This interest rate may be higher than what you are paying on your existing loans. However, this may be an instance where you need to look at the bottom line. Even though the interest rate is higher, is it better for you in the long run?

When you consolidate debt, you are often consolidating credit card debt. This makes sense because credit cards get out of control quickly and it is hard to reign them back in. A debt consolidation loan is incredibly helpful with that. However, if you do not close your credit card accounts, they remain open and available for use. If you do not put parameters on yourself when it comes to your credit card use, they could get out of control again. You should close all but one of your credit cards so that you are not tempted to use them. This is where your self-control comes into play. This is where you need to actively change your habits so that you do not get yourself back into a bad situation.

Another downside to debt consolidation is that it is easy to think you have decreased your debt since you only have one payment. That is not the case. You still have the same amount of debt, it just now is merged together into one large amount instead of several smaller pieces.

Debt Consolidation for All Types of Credit: Does it exist?

So let us talk real talk about bad credit and debt consolidation. It makes sense that the person needing debt consolidation loans tends to have bad credit, right? Typically it means that your debt is out of control and you are struggling to pay it. This does not mean you have bad credit. You may still be able to pay your minimum payments on time. Your credit is probably not great because you have a lot of revolving credit and a high debt to income ratio. It is safe to say that those looking for debt consolidation come from all credit score areas. However, most of those needing debt consolidation have bad credit.

If you have bad credit, you may want to consider some other options. Again, before doing this, you must thoughtfully consider if these are the best options for you. You may decide that you do not need a debt consolidation loan. You may only need some money to get you through a tight spot. In that case, bad credit emergency loans may be what you really need. These are fast loans so you can get cash right now when you need it. These types of loans are completely different from a debt consolidation loan and have a short turn around time. That means you have to pay them back in a short period of time. They usually have high interest rates and huge penalties if you do not pay them back on time.

Will Debt Consolidation Hurt My Credit?

Initially, it may seem as though debt consolidation loans negatively impact your credit score. Keep in mind, these are loans and initially, it seems like you are taking on more debt. When you get a debt consolidation loan, you can approach it a couple of different ways. You can handle it yourself, or you can use a debt consolidation manager. No matter which way you go, you apply for the debt consolidation loan while you still have all the other debt. So, all of your debt is being considered at this point. If you are approved, you take on more debt up front. This negatively impacts your credit score because it changes your debt to income ratio. Once you have the money, you can begin to pay off those smaller debts. It is important to do this quickly.

The last thing you want is money sitting in your account that you begin to use for other things. You should immediately pay off all of your other debts. When you do this, those debts are considered satisfied. This may take a little bit of time, a couple of payment cycles, before it is reflected on your credit report. For a few months, it may not show that you have paid off all of that other debt. During this time, your credit score may go down. The good news is once those other debts are paid, it should begin to come back up. As you are paying your debt consolidation loan, that also positively impacts your credit score. You must understand the process and be willing to have the possibility that your credit score is impacted.

Should I Consolidate My Debt?

When deciding if debt consolidation loans are the best option for you, only you can make that decision. Consolidating debt to a lower interest seems like a smart idea. You can get advice from many people about the best path, but at the end of it, you have to decide for yourself. The first thing you should do is educate yourself about all of the options you have. When you look at all the loan options available to you, is debt consolidation the best one? You need to understand your credit score and how it impacts your everyday life. You need to understand your finances and know what you can afford. The key here is knowledge. The more knowledge you have about your situation and all of your options, the better able you are to make the best decision for you.

The bottom line for you is can you continue to afford to do what you are doing? Is what you are doing today going to continue to pay your bills so that you can get ahead of them and regain control? If the answer to those questions is no, then you should consider looking at other options. If what you are doing today is not working, you need to make changes. That change may very well be a debt consolidation loan. That change may be to create a budget, yes it is coming, and make changes to your spending habits. You may have the money you need and you are spending it on the wrong things. You are the only one that can make that decision for yourself.

Knowing Your Goals Is The First Step

When you are considering debt consolidation loans, you have to start with the end in mind. You need to be able to define your goal and go through the process of debt consolidation smoothly. Your initial response may be that your goal is to get out of debt. That is a great goal, but is that the only one? While getting yourself out of debt is great, does that change what you are doing today? If you do not make real changes to your habits and behaviors, you are going to find yourself right back here again.

In addition to getting out of debt, you should have a goal of changing your lifestyle to remain debt-free. Now, it is almost impossible to stay completely out of debt. Many of us cannot afford to buy a house in cash, so we need a mortgage. I would argue that is good debt and it is beneficial to you. This is why it is important to truly understand your goals and to break them down into manageable pieces.

You need to write down your short and long term goals. Once you see them on paper, it becomes easier to make them real. A long term goal may be to save towards retirement. Another long term goal is to have a set amount of money saved in five years. A short term goal may be to actually begin saving money. Possibly a short term goal is to save money for a vacation. You may have other short term goals that you have not been able to think about because you are swamped in debt.

Consolidating your debt may give you some freedom to begin to actually think about other goals. You want to make sure that consolidating your debt does not stand in the way of your other goals. If you decide to work with a debt consolidation manager, you may have your credit cards and other assets frozen. Be sure to understand the details of any program that you enter. If freezing your credit cards is part of their process, make sure you know how long they remain frozen. Also make sure that is something you truly want to happen.

Next, It Is Time To Gather Your Debt

You have made the decision that you want debt consolidation loans to help you achieve your goals. Now, you need to understand just how much debt you have. You also want to make sure that you consider all of your debts when thinking about how much money you need to consolidate your debt. Until you take this step, you may not fully appreciate just how much debt you have. There always seems to be one that gets forgotten or falls between the cracks. Do not guess or estimate. It is important that you work with accurate figures.

To get that, contact your credit card companies and any loans you owe to get the pay off amount. That amount may not be what you think, so you should always check. That payoff amount is changeable, so even when you get the number from the lender, it could be off just a bit when you pay the debt. Typically, it is off in your favor, but not always.

You may make another payment between the time you get the estimate and you pay off the debt. This makes the pay off amount decrease. If it is a credit card, there could be interest payments that have not hit your account when you received your payoff amount. This can change the amount to be higher than what you thought. You can use a debt consolidation calculator to help you get close to the amount you need.

An important tip here is continue to pay your bills while waiting for the debt consolidation approval. Do not stop paying your bills thinking it all works out in the end. It might, but it might not. You do not want to play around with your debts by not paying them. If you overpay them, they issue a refund. It is better to overpay. If you do not pay the bill, you receive interest charges and fees. It also negatively impacts your credit. You are working hard to improve your credit. Do not make that misstep and hurt it.

What Are My Options?

Depending on your credit, you have options other than debt consolidation loans. You can negotiate a debt settlement with the lenders. Often times, if you are honest with those to whom you owe money, they work with you. Every lender wants their money. When they have to take steps to force you to give them their money, it costs them more money. They do it, but it comes with a price. If they can avoid all that by working with you, they will. It is important to talk to your lenders. By negotiating a lower debt, you and the creditor agree to new terms. This may be a positive end to a tough situation.

However, keep in mind that during this negotiation period, you may not be paying your debts and they continue to grow. This could negatively impact your credit score in the short term. It may not, but you should be aware that it could. Often times, when a debtor is in negotiations with you, they do not report to the credit agencies. This is not a guarantee. You just never know what a debtor might do.

You may be able to borrow money from family or friends to consolidate your debt. If you have a large amount of debt, this may not be possible. However, you may know someone that is able and willing to lend you that kind of money. Often this money comes with lower interest, or no interest at all. You could take out a home equity loan on your house to pay off your debts. This allows you to use the collateral in your house to borrow money. Often times, the interest rates on a home equity loan are not as high as a debt consolidation loan.

Do I Need A Debt Manager?

It is possible to obtain debt consolidation loans without using a debt manager or debt settlement company. However, you have to do the work yourself and that may be something you just do not want to take on. Using a company handles all of those steps for you. I can understand the appeal of that, but be sure you understand what that means for you.

When you opt to use some type of company to handle your debt consolidation, they often require you to have credit counseling. That may be something that you feel you need and you are wondering where to sign up. There are also fees involved with a debt manager. They are doing work for you and they want to get paid, too. If the thought of dealing with lenders and creditors causes you stress and anxiety, those fees may be a small price to pay for peace of mind.

Anything Else I Need To Know?

In all this talk about debt consolidation loans, I have not addressed bankruptcy. Yes, that is an extreme, but depending on your current situation, it may be something you feel you need to consider. I just want to give you a little information about bankruptcy. It used to be really easy to do but that is not the case anymore.

Also, bankruptcy does not forgive all of your debts. You may go through the process and take a huge hit to your credit only to find out that you still have debts you need to pay. It becomes a huge black mark on your credit report that hangs out there for 7 to 10 years. It is possible to start to begin to build credit again in about a year, but that smudge lingers for a long time.

Even when you file for bankruptcy, you still have to go through the debt settlement process. That part is a huge headache for you. These days, there is a huge stigma with bankruptcy, so it is something that should not be considered lightly. It may not be the right option for you at this time, or ever.

Why Should I Have A Budget?

I cannot ever stress enough how important it is to create a budget for yourself. It is even more important when you are working hard to pull yourself out of debt. Debt consolidation loans only do part of the job for you. They can help you merge all of your small debts into one larger, more manageable debt, but they cannot change your habits. You must do that for yourself. The first step in that is listing out all of your expenses and seeing how they compare with your income. You may be surprised to see where all your money is going. I am willing to bet that you are not even aware how much money you are spending and where.

Debt consolidation loans are a great way to get control of the money you already spent. A budget is a great way to get control of the money you are earning and how you plan to spend it in the future. When creating a budget, you can look at the things you pay for that you are not using, such as a gym membership. If you have it and do not use it, cancel it. This is the time when you can stop paying for things you do not need or use.

Conclusion

Here we are at the end of the article about debt consolidation loans and I hope you have learned valuable information. No matter which path you choose, it is important that you do so in a smart and meaningful way. Make sure you have all the information you need before making a decision about debt consolidation loans. You must do what is the right thing for you, but you cannot decide that if you are not informed about all of your options. On the surface something may look like a good choice for you, but when you dig a little deeper, you may find out that it really is not.

How Can a Personal Loan Save You Money?

Posted on | by Kevin Strauss | Leave a Comment on How Can a Personal Loan Save You Money?

Most people have some kind of debt and the majority of people have a lot of debt. Getting a personal loan to save money can be the answer to help your debt problem. Better debt managing can save you money later on.

A personal loan is money from a lender that you pay back in monthly payments. You will borrow money with a certain interest rate. The interest rate will depend on your credit score and where you get the money.

While there are different variations of personal loans, there are primarily two main types. Unsecured loans are loans that don’t require any collateral. This means the personal loan finance company makes a decision about whether or not you will qualify based on your financial history and credit score. If you don’t qualify for this type of loan with a low interest rate then your second option is a secured loan. Secured loans require collateral. If you don’t pay back the loan then the lender has the right to take your collateral as a form of payment for the loan. Many of the consumer installment loans available are unsecured and since the lender isn’t able to get your assets if you don’t pay back the loan, the interest rates can be higher compared to other types of unsecured loans.

How to Use a Personal Loan to Save Money

There are multiple ways to use a personal loan to save money, but not everything will suit your situation. To help you get informed on how you can help better your circumstances by taking out a personal loan, we will describe the most frequent situation where you can use a personal loan. If you are in a position to think about a personal loan, you should definitely do it.

Consolidate Debt

Debt consolidation is the process of taking your debts and using one loan to pay them off at once. A personal loan may allow you to have a lower interest rate on your debt to help you pay it offer faster. First, you must add up all your credit card debt and other debt. Most people choose not to include their mortgage in debt consolidation and instead just choose credit card debt. Types of debt that can be consolidated are credit cards, auto loans, payday loans, lines of credit, medical bills, legal debt, and gambling expenses.

Loan Shopping Advice

Once you have an idea of how much debt you have then you know the amount of money you will need for a personal loan. Be sure to do some personal loan shopping, in order to find the best rates. You can choose to visit your local credit union or search online. Online lenders will let you pre-qualify for a personal loan so it doesn’t affect your credit score. In addition to looking at interest rates, you should also look at other fees upfront, such any origination fees that can vary between 1% and 5% of the total loan amount.

One of the best places to look for reputable lenders online is Loanry. This is what we do. We connect you with credible lenders and help you go through this process a bit quicker.

After You Get Approved for a Loan

Once you have the money deposited in your account, which doesn’t take long if you get approved online, then you can pay off your debt and on your credit cards with that money and afterwards focus your attention on payments to your personal loan. When choosing a personal loan, be sure it’s an unsecured loan. Unsecured loans don’t require any collateral. Even though there may be higher interest rates, this won’t put any of your assets at risk if for some reason you have issues with payment.

When you use a personal loan to consolidate debt, you can reduce your interest rate. If you qualify for a lower interest rate then you can use a personal loan to save money. It also helps to lock in a low rate. Sometimes when borrowing money your interest rate is variable and changes. This means that it can go up and down. If you don’t want to owe money at variable rates anymore then a fixed rate personal loan can allow you to know exactly what your payment will be. Avoid personal loans with low teaser rates since these rates do go up. Find the maximum rate you could be charged for any loan you are using for consolidating debt.

Repaying a Loan

With a personal loan, you have a repayment timeline. You agree to pay back the money you take out from a personal loan on a set schedule that is specified in the loan agreement. Since you will have this payment schedule you know exactly when you will become debt-free if you pay on time. If you want to pay off the loan early, check with your lender about any prepayment penalties. Depending on how your interest is structured within the loan, you may or may not have a prepayment penalty. If you don’t have one and can pay off the loan early then that means you can get out of debt faster.

When to Use a Personal Loan to Consolidate Debt

In your order to use a personal loan to save money, it needs to make sense. If you aren’t prepared, taking out a loan can just open you up to spending more money.

You Have a Plan to Pay Debt

Before you make a decision on a personal loan, you need to have a plan. If you just roll up the credit card balances into a big personal loan without an idea of how you will pay it back then there is no point. Will the new monthly payment be feasible? If you are struggling to pay it and end up relying on balance-free credit cards then you won’t be saving any money. It helps to be honest with yourself about your will power and what you can afford.

How Big Your Debt Is

Using a personal loan for consolidating debt is a good idea if you have a moderate level of consumer debt. If you can pay off your debt within the next five years then a personal loan can make sense. If you can expect to pay off the debt within the next six months to a year then a personal loan may not be worth it. The small amount of interest money you can save may not be worth the trouble. If you have no idea how you will pay off your debt in the next few years then a personal loan may not be enough. You likely need credit counseling and a professional that can help you out.

You Have Spending under Control

Consolidating doesn’t just make your loans disappear but instead it moves it around. The debt means you are living beyond your means. If you know the reasons you aren’t charging on your credit cards is just because they are maxed out then a personal loan may actually enable you to spend more. If you have already come to the realization that your spending was out of control and have vowed to lower it then a personal loan can help you streamline and simplify your debt.

Your Credit Score Is High Enough

If your debt has already affected your credit score then a personal loan may not be cheap enough to make it worth it. The credit score requirements for the best interest rates on a personal loan can be high. In order to get a single-digit interest rate, you need a credit score over 760. If you always make your payments on time despite your high balances then your credit score may be high enough to get a lower rate than what you currently have on your credit cards.

However, if you have missed payments then your score likely isn’t high enough for a good interest rate. If you can’t get a lower interest rate than your existing one then you may still have an advantage. You have fixed monthly payments and the loan will eventually be paid off. This can help you from getting stuck in the trap of just making minimum payments all the time and not actually making a dent in the debt.

How to Apply for a Personal Loan

Applying for personal loans can be an easy process, especially if you are working with an online lender. Online lenders will speed up the application process and give the money to you in a short time. Before you settle on any particular lender, you need to check interest rates and their charges. Every online lender will have its own customized rates and structures so you have to shop around before you decide on one. Shopping around is very important if you are trying to use a personal loan to save money. When shopping around and determining your rates, you will be required to provide some information and the lender will look at different factors. Some of the factors lenders will use include your credit score and history, your income and employment, and your debt-to-income ratio.

Advantages of Personal Loans

There are a number of advantages of a personal loan and if used correctly, you can use a personal loan to save money.

Consolidate Credit Card Debt

Debt consolidation might be one of the top three reasons that people use a personal loan. This is one of the ways for a personal loan to save money. If you have a lot of debt, why are you paying through the nose with high-interest rates when you can manage debt with a cheaper interest rate? A personal loan has become an easy-to-use tool for which a consumer can swap out higher interest rate credit card payments with a more manageable schedule of a personal loan.

By using a personal loan to consolidate debt, there are multiple benefits. The first benefit is clearing off debt from credit cards. This is known as revolving account debt and it will usually lower your credit score when the balance is high. The second benefit is changing the debt schedule. Personal loan balances don’t keep growing and are capped. As long as you make your payments then the loan will decrease and be paid off. However, this will only work if you don’t continue to rack up more debt on your credit cards. The third advantage is switching your debt to one payment. This can be easier from an organizational advantage.

Cash flow management can be a big problem, especially if there are multiple accounts to juggle. When you have your debt in one payment, you can pay it right when a paycheck comes in and it’s easy to manage.

Used for a Number of Purposes

Many bank loans are purpose-specific but personal loans can be used for just about anything. The funding gets approved almost immediately when you search for loans online. The lender doesn’t get in your business about what you are using the money for. Instead, they are focused on whether you are a good borrower, don’t have any late payments, and will pay back the loan on time.

Efficient and Convenient

With a personal loan, the process is quick. With a bank-funded loan, the process can take weeks. Sometimes, you may not have eight weeks to wait for financing to happen. There is a very fast approval process when you choose to get a personal loan. It will usually take to three business days. The funding will go directly to your bank account and show up quickly. The payment can also be very convenient. Electronic payments mean you don’t have to remember to put a check in the mail and can make sure you are paying on time.

How Does a Personal Loan to Save Money Impact Your Credit?

There are a number of ways a personal loan to save money can affect your credit. A personal loan can affect your credit score depending on the different actions you take.

Applying for a Loan

The formal application for a loan will trigger a credit check. This type of hard inquiry will take away some points for your credit score, although it doesn’t make a big impact.

Shopping for a Personal Loan

Many loan places will allow borrowers to pre-qualify using a soft credit check that won’t affect your credit score. This will allow you to shop around for different lenders in order to find the best rate and terms. When you are comparing multiple lenders, inquire about whether or not the lender offers the soft check to help protect your score.

Repaying the Loan

If you repay the loan regularly then this can help your credit score. Your ability to repay a loan will make up about 35% of your credit score. A consistent record for one-time payments helps build your score in the long run. However, if you miss a payment this can negatively impact your credit score. Even if you don’t miss a payment and are just a few days late, your credit can still be affected.

Different Elements of Personal Loans

There are several elements that can affect a personal loan. If you are getting a personal loan to save money, you will need to be aware of these different elements and how they can affect monthly payments.

Interest Rate

The interest rate will have a big impact on payments. It’s the amount of money you pay to the lender on top of the money you took out for the loan. The interest rate on a personal loan will stay the same throughout the length of the loan term.

Term Length

This is the amount of time the lender gives you to repay the loan. Personal loans will have a fixed time length and you need to make the payments on time. Payment amounts will always be the same. The terms on a personal loan can range between just a few months to even longer than five years. Three years is the average that people have to pay off their personal loans.

Borrowing Maximum and Minimum

This is the minimum amount and maximum amount you can borrow. Some lenders can give higher amounts to those with great credit scores.

Prepayment Penalties

Like many other loans, personal loans can come with stipulations when it comes to repayment. If you want to repay faster than the stipulated period then be sure to check the prepayment agreement to see if there are any penalties.

Inclusive Fees

Many lenders will apply several different fees to personal loans. These fees can include origination fees and service charges. An origination fee is the amount of money you have to pay at the start in order to have the loan set up. When applying for different loans, be sure to read the fine print so you know what fees you will be responsible for.

APR

This is the amount of money you pay every year in order to borrow a loan. This fee will also include the interest rate. This is the total amount of money you are charged with every year when you borrow for a personal loan. Just like interest, your APR will depend on your credit score.

Personal Loan Basics Spelled Out: Loan Shopping 101

How Interest Rates Impact a Personal Loan to Save Money

Personal loan interest rates make a huge difference to the monthly payment. Your credit score is one thing that will directly impact the monthly payment. The better your credit score, the lower the interest rate you can get. If you want to consolidate debt then you need a lower interest rate. If you don’t get a lower interest rate, then what is the point? For example, if you get a personal loan of $20,000 and the interest rate on the loan is 10% then the total interest you will be paying is $2,000. If you have bad credit and have a 25% interest rate on the same amount of money you are now paying an extra $5,000 on your loan amount.

Ways to Qualify for a Personal Loan to Save Money

If you are getting a personal loan to save money then it’s about more than just getting approved. You want to get the lowest interest rate possible. The best thing to do is to make sure that your credit score and history are in the best shape. This is what lenders will rely on to establish your finances and borrowing behavior. In order to improve your credit score, be sure to check your credit reports and notice any errors. If you notice an error then file a dispute to fix it. Be sure to fix any late payment issues.

You should also reduce your debt as much as possible. Your debt-to-income ratio and the amount of debt you have helps determine whether you qualify for a personal loan. In order to increase the chances of qualifying for these loans, you should reduce debts as much as you can.

In order to qualify for a personal loan with low income or bad credit, you can get a co-signer. However, if you are looking at using a personal loan to save money then this may not be the best option. Even with a co-signer, you still may have high-interest rates and you are putting your co-signer at risk if you don’t pay back the loan.

One way to make sure you get a good interest rate is by personal loan shopping. Shopping around for personal loans will allow you to identify lenders with flexible loan terms and requirements so you can make sure you are getting a good interest rate and avoiding fees that will not end up saving you any money.

Uses of a Personal Loan

There are plenty of different ways to use a personal loan. It’s even possible to use a personal loan to save money. The flexibility is one of the biggest advantages of using this kind of loan. These types of loan can cover anything as long as you have a credit score that allows lenders to take a chance on you.

Home Repair

Sometimes you may find yourself needing to make home repairs but you don’t have the money to pay a contractor. Emergency home repair loans can help. These loans give you the financing you need and allow you to pay back the loan over a period of time. Home repairs can come in different forms and while there are some projects that you may be able to do yourself, sometimes you just need to call in a contractor.

Car Repair

Car trouble is almost always unexpected and it can be hard to go without a car. A personal loan for auto repair can be a good way to get your car fixed with a lower interest rate and monthly payments you can afford. While there are other options for getting your car fixed, you need to make sure you evaluate them in order to make the best decision. While a car is a necessity, check to make sure the auto repair is worth it before you go into debt.

Medical Expenses

Medical expenses are one of the top reasons people use personal loans. Examples can include dental work, fertility treatments, and other procedures that generally cost $5,000 or more and aren’t typically covered by medical insurance. Other expenses, such as medical travel, medications, and aftercare, can also be financed by a personal loan for medical expenses.

A Large Purchase

If you need a new washer and dryer or a new computer and don’t have the funds then you would have to dip into savings. Some of these items can end up costing you more than what you have in a savings account. Personal loans will allow you to purchase major household appliances and electronics now when you need them, instead of having to wait months to save up.

Debt Consolidation

Many people want to use the money they get from a personal loan to improve their financial situation. One of the ways to do this is by using a personal loan to reduce higher interest debts. Using a personal loan makes it possible for people to pay down their debts and lower the interest on the debt. When you reduce the overall interest amount, it reduces the amount of money you pay on your debt or the duration it takes to pay it off. You can also make single payments to make managing debt even easier.

Whatever your reason for getting a personal loan is, it’s important to keep a few things in mind. You only want to borrow what you need for the expense and what you can comfortably pay back. Don’t increase your debt for reasons that aren’t important. Taking a personal loan when you don’t have a source of income to be able to pay it back can be a costly mistake. While personal loans are flexible in their uses, this may not be a good strategy for buying gifts, paying for vacations, or other luxuries.

Conclusion

Personal loans have a lot of different uses. It can be easy to apply for a personal loan online where you can shop around for different rates to make sure you are getting the best interest rate possible. In order to use a personal loan to save money, you need to make sure you are getting the best interest rate available.

One of the main advantages of a personal loan to save money is to use it to consolidate debt. When using a personal loan to consolidate debt, you need to know when it’s best to use it. Unless you have a plan in place for debt repayment, a personal loan may not be the best choice. In order to increase your chances of lenders approving you and getting a better interest rate, you need to work on your credit score. Personal loans can also negatively impact your credit score if you aren’t careful about payments or fail to shop around for a loan correctly.

Should You Get A Personal Loan for a Washer and Dryer?

Posted on | by Carlie Lawson | Leave a Comment on Should You Get A Personal Loan for a Washer and Dryer?

Unless you have a spare $750 to $2,000 in the bank, you’ll probably start quickly thinking “I need cash now” if you washer and dryer break down. It is not as if you can go to work or the grocery store in filthy clothes. Since you have to remain clean, you’ll need a personal loan for a washer and dryer.

Personal Loan for a Washer and Dryer

Are you surprised to learn that financial lenders offer personal loans specifically for washers and dryers? Since there are some good reasons to get a personal loan for various things, this is actually expected. The truth is you can find a personal loan finance company that specializes in almost any kind of loans – medical, student, home improvement, purchasing a computer, and yes, personal loans for washer and dryers.

Even if you only need to replace one of the appliances, their prices can run pretty high. In fact, depending on the quality of the machine you buy and the number of features, some appliances can vary by a little more than $7,000 in cost.

  • Dishwasher: $400 to $700
  • Dryer: $400 to $1,000
  • Oven: $650 to $2,000
  • Refrigerator: $900 to $8,000
  • Washer: $350 to $1,000

You probably didn’t plan on your washer or dryer breaking. That means you probably did not have funds set aside for its repair or replacement. Resist the temptation to put this on a credit card.

Avoid a Huge Credit Card Bill

Many reasons exist to avoid making a major appliance purchase on an existing credit card, or worse, taking out a new credit card to cover the purchase. If you compare credit cards and personal loans, you will see that the reasons for getting a personal loan outweigh using a credit card for buying a new appliance. The top three reasons to avoid slapping this on a credit card are:

  • the interest rate,
  • increase to your utilization rate,
  • you reduce your available credit for emergencies.

The Interest Rate

Those with amazing credit and a great job can qualify for zero interest or a low-interest personal loan. But, the rest of the world will get gouged. If you have poor credit, you will end up paying up to 25 percent interest. That’s one quarter of what the appliance cost you’re your washer and dryer cost $1,000 combined, you’ll end up paying an extra $250.

Increased Utilization Rate

Putting a huge purchase like appliances on your credit card lowers your credit score by increasing your credit utilization, also called the balance-to-limit ratio. Creditors look at this second only to your payment history. In order to keep your credit score healthy, you need to keep your credit utilization score under 30 percent. You can calculate your credit utilization to check your ratio:

credit utilization ratio = cumulative balances of all credit cards/total credit card limits

Reduced Available Credit

The obvious reason to not use your credit cards is that you will reduce your available credit remarkably. That means if you have a genuine emergency like your car breaking down on the side of the road you may not have enough open credit to take care of the problem.

Personal Loans versus Credit Cards: What is Better?

The answer is that if you cannot wait and save up the money for the appliances, you take out a personal loan for a washer and dryer. So, what exactly is a personal loan for a washer and dryer, also known as an appliance loan?

Appliance Loans Defined

There are many reasons to get a personal loan, but the term appliance loan describes a personal loan specifically for the purpose of purchasing a new appliance. It is typically an unsecured loan offered by a private lender or through a financing agreement with the appliance store or home improvement center. The diversity of sources for these loans result in a wide variation in loan rates and terms. Typically, the variation spans a vast berth:

  • loans of $1,000 to $100,000,
  • a repayment term of six months to seven years,
  • a range of interest rates that starts at five percent and goes up to 20 percent.

The wide range of loan amounts owes to the fact that a personal loan for a washer and dryer falls under the umbrella of home repair loans, including home repair loans for bad credit. This type of loan has less impact on your credit score than a credit card. You also obtain the funds quickly, generally within one week.

The process of applying

Lenders of this type frequently offer an online application. This simplifies the process and lets you complete the financing process before shopping. Knowing that you have the money to purchase a range of possibilities provides you more buying leverage.

While the final decision and funding might take a week, many lending institutions update your application status within 24 hours. You may need to provide additional information to the financial lender. If that occurs, the lender will schedule a verification phone call with you. They may have you upload additional documents and information which they will verify. After verification, the lender will send you a promissory note to sign. This may come as a online document that you can e-sign. After you sign and submit it, the financing institution transfers the funds to your bank account.

 Loanry Provides You with Another Method

While Loanry does not make loans, it may help you find a lender. The lender ultimately decides on giving you a loan or not, and you accept the terms, you might find the loan you need for a new washer or a dryer.

So how does it work? Even though Loanry does not lend, it offers space to lenders so they can communicate with potential consumers. It works similarly to a shopping mall, but instead of getting clothing, you shop for loans.

Institutions that participate offer various types of loans from car loans to student loans to home repair loans for bad credit to general-purpose emergency installment loans. If you are interested in this kind of service, here’s what you need to do:

  1. Go to Loanry.com
  2. Choose the type of loan you need and the amount you need
  3. Complete a form with your information

Loanry then goes through its database of financial institutions and it may find a lender for you. If this happens, you need to fill out that lender’s application and make sure to leave enough time for that, since it takes longer.

Another way you can use Loanry is by utilizing their money tools. This way you can compare lenders and gain better insight.

Saving Money on a Personal Loan for a Washer and Dryer

You do not have to go broke to have a washer and dryer in your home. In fact, even if you have to take out a personal loan for a washer and dryer, you can save money doing it. Implement these six tips to save money on your major appliance purchase.

Buy units that offer rebates.

This typically entails purchasing energy-efficient products. These products often provide a manufacturer’s rebate or the utility company offers the rebate. While applying for the rebate may entail a multi-step process, once completed, you receive cash back on your purchase. You can apply all of it to your loan payments and pay down your loan more quickly. Check the Energy Star website before you begin shopping.

Leverage online price-matching utilities.

Large retailers often offer the best price match on any product their store sells. It has to be the same manufacturer, make and model. Some retailers offer to beat the competition’s price. Price matching can let you combine the lowest price with the best financing agreement. Two examples of retailers who offer this price match are Home Depot and Best Buy.

Avoid the extended warranty.

Typically, the appliances outlast the warranty and the extended warranty. The extension just provides the retailer with another method of generating profit. The problems washers and dryers do sometimes develop during the warranty period cause such a small issue that the repair costs less than the extended warranty did.

Purchase Refurbished or Used Appliances.

We’re not talking about eBay or Craigslist. Many appliance stores offer used appliances that they have re-tooled. Many manufacturers offer refurbished appliances. You can still use the funds from your personal loan for a washer and dryer to purchase these appliances. The refurbished or used appliances from reputable bricks and mortar stores still come with a warranty.

Obtain Email Quotes.

Obtain online quotes from each major retailer. These all get sent to your email, enabling you to compare costs at your leisure. This also provides you with a printed quote that you can reference if a salesperson tries to raise the price when you visit the store.

Consider the Delivery Fee

Comparing these fees gives you an apples to apples look at prices. It is unlikely that you will pick up something as large as a washer and dryer since few individuals have a vehicle large enough to haul these items. The delivery fee of a store could change its final price remarkably. Look for stores with free delivery.

By combining these six items you can save a remarkable amount of money on your appliance purchase. For example, you might find a store with free delivery that offers price matching. When you find a terrific price on a refurbished unit at another store that the retailer with free delivery also carries, you can nab a washer and dryer combo for a teeny, tiny price.

Discount Retailers: Costco and Sam’s Club

Perhaps your appliance shopping will lead you to search for a personal loan for a washer and dryer from a major discount retailer like Costco or Sam’s Club. There are trade-offs to these discounters. In a Consumer Reports satisfaction survey, Costco earned the highest ratings possible for its prices on major appliances. Costco also received the lowest ratings possible for its product selection. Their appliances are sold only on Costco.com with a limited selection of display units in warehouse stores. You’ll find less than 100 models from which to choose. That includes all available electric and gas dryers. The selection includes only major manufacturers like LG and Whirlpool.

Finally, beware that getting your new washer and dryer delivered can take a while. At Costco, the delivery service requires two to three weeks. Sam’s Club offers a similar set of options. Its delivery also includes a haul-away of your existing washer and dryer.  You’ll still need to visit the laundry or dry cleaners for a few more weeks with these options though.

Pros and Cons

While you may save a little because of your membership to these discount stores, you may sacrifice selection. That chalks up to cutting down your number of available makes and models for price comparison. Avoid only considering discount store retailers. You may also end up having to buy accessories if you purchase a set of appliances from a discount store. Costco, for example, sells front load machines that require pedestals. The machines do not cost as much as regular washer/dryer combos, but the pedestals cost $500 each.

By getting pre-approved for a personal loan for a washer and dryer, you open up your selection of retailers and improve your chances of landing a really great deal.

The upside of these stores is they typically offer a two year warranty outright. They also usually include their delivery fee in the price quoted on their website.

Your Personal Loan for a Washer and Dryer

You won’t obtain your personal loan for a washer and dryer the same way your next door neighbor will. What worked for them may not – and probably won’t – work for you. That is because you both have different credit histories, credit scores, jobs, and appliance needs.

The quickest way to obtain a personal loan for a washer and dryer remains Loanry.com. Before you visit Loanry to begin your quest though, visit Creditry.com to learn about your current credit situation. You can obtain your credit score without creating a hard hit to your credit report. You can educate yourself on the options available to you. Your credit score will fall into one of the following categories:

credit score factors

Conclusion

You may decide that you need to improve your credit score before applying for a shopping loan for a washer and dryer. You might see mistakes on the report or notice entries that do not actually belong to you. A creditor may have reported late payments, but you can prove that you made them on time. Take the time to refute the incorrect information before you apply for your personal loan for a washer and dryer. You will improve your chances at approval and at obtaining a lower interest rate. Then, visit Loanry.com to jump-start your loan search.

 

Getting A Personal Loan to Consolidate Debt to a Lower Interest

Posted on | by Julia Peoples | Leave a Comment on Getting A Personal Loan to Consolidate Debt to a Lower Interest

If you are like most people, you have some kind of debt. Maybe you have only a little bit of debt that is good for you, like a mortgage. Unfortunately, the reality is that many people have a lot of debt. According to Forbes, 40 million households are house poor, meaning they have a house they cannot afford.

Many more than that are in so much debt, it would take them over ten years to get out of it. As a result, we have resigned ourselves to being in debt and constantly putting ourselves further into debt. It does not have to be like that. There is a better way. Continue reading to find out how to consolidate debt to a lower interest. This could be the start of a debt-free life. Wouldn’t that feel like a huge relief?

Debt Consolidation With Low-Interest Personal Loan

I never want to assume that people fully understand their finances. The more people I talk to, the more it seems that people often just let things happen when it comes to their money. They open credit cards and accumulate debt without ever understanding how it works. They apply for loans without ever reading the fine print. I want to change that. I want everyone to take control of their finances and understand the decisions they are making. Let us start here with basic information about personal loans.

What Is A Personal Loan?

A personal loan is when you borrow money from a lender with the promise to pay it back in regular monthly payments. That lender can be a bank, a credit union, a personal loan finance company, or even a friend. You borrow a set amount of money at interest. That interest rate depends mainly on your credit score and from whom you borrow the money.

You agree to pay back the money within a set amount of time, usually three to five years. As long as you make your payments each month on time for the specified time, everyone is happy. If you miss a payment or make late payments, your credit could be negatively impacted. Personal loans can be a great tool to get control of your finances if used properly. You can use a personal loan to consolidate debt to a lower interest.

Can I Use A Personal Loan To Consolidate Debt?

Yes, absolutely, you can get a personal loan to consolidate debt to a lower interest rate. That is really the ideal scenario when it comes to debt consolidation. What you are hoping to achieve is lower interest, with one monthly payment from you to pay off all of your debts. You can choose any loan places you wish for a personal loan. You can even choose to find unsecured personal loans online to pay off your debt. The key is to get a loan that pays off all of your debts.

This way you focus on making one payment per month to decrease your debt. If you have extra money each month, you can make extra payments to pay off the loan faster. When you are focused on one payment, this is much easier to do. One thing I want to caution you about is when you have consolidated your debt and making only one payment that you do not get yourself back into debt. Making a plan for yourself to pay the monthly payment is the best course of action. When you have a plan, you are in control.

Is A Personal Loan A Good Idea?

This is really a question you must answer for yourself. It could be a good idea to consolidate debt to a lower interest, if you can afford to. Remember when you borrow the money, you have to pay it back. If you cannot afford to pay it back, you should not borrow the money. You need to take a long look at your budget and decide how much you really can afford to pay per month.

Do not get yourself into a situation where you cannot afford to pay back the loan. This only makes your financial picture much bleaker. By attempting to consolidate debt to a lower interest, that should free up money for you that you can use to pay back the personal loan.

How Can I Use A Personal Loan?

You can use a personal loan for anything that you want. A lender may ask you what your intention is for the loan, but that rarely is a determining factor. Once you have the money in your bank account, it is your to do with what you want. However, I would recommend that if your intention was to pay off debt, then you should pay off debt. Do not play with the money. Do not think you can gamble it and double your earnings. That rarely ever works out well. It is not worth the risk.

Can A Personal Loan Improve My Credit?

The short answer is yes, a personal loan can improve your credit. When you consolidate debt to a lower interest, you are paying off all of those other debts at one time and focusing on just one loan. This allows you to make your payments on time. This prevents you from missing payments. All of these things can help improve your credit. The biggest reason for bad credit is missed or late payments. When you are making only one payment, it should be easy to make sure you pay it on time.

Often times, when you take out a personal loan, even when the interest is high, it is still lower than credit card interest. Credit cards often get people into a bind. It is easy just to use them and not pay attention to how much you are spending. But, you always have to pay for it. When you get that bill and you cannot pay it in full, you have interest (or finance) charges.

When this happens month after month, those finance charges just pile up. So, when all you are able to pay is the minimum payment and the interest charges each month are more than the minimum payment, you are in a world of hurt. This is when a personal loan can help you. You can consolidate all of the credit card debt into one static monthly payment. Just remember, do not continue to use your credit cards.

Interest Rate By Lender
CLICK TO VIEW REAL-TIME RATES: Rates Subject to Change

What Is A Debt Settlement?

I want to shift gears slightly to talk about debt settlement. Many times when you owe money to a creditor, they may be willing to negotiate a lower debt. You can contact any of your creditors at any time and ask if there are willing to make a settlement. When you negotiate a lower debt, both you and the creditor are agreeing to the terms. Sometimes, the creditor allows you to pay a certain percent of the debt across a certain number of payment.

So, you may be able to pay 70 percent of the debt in 8 months. Another potential settlement is paying a one-time lump sum amount to satisfy the debt. It might be 25 percent or 50 percent, but the creditor sees one lump sum payment now is worth more than however long it might take you to pay the debt in full. This could be an alternative to consolidate debt to a lower interest.

That sounds great, doesn’t it? Well, there is a catch. You have to keep in mind while this negotiating is happening and you are only making partial payments, you are not paying off the full debt. That has the potential to negatively impact your credit. Once the debt is paid, your credit should recover a little. If you already have bad credit, it may not be a real impact. Once it is low, there is not much further for it to go down. Your credit may have a positive impact on paying off the debt. This may be a good option for someone with poor credit.

What Should I Really Know About Debt Consolidation?

While the advantages to consolidate debt to a lower interest may seem fairly clear, let us focus on some of the disadvantages. Disadvantages to debt consolidation can include high-interest rates. Most of the people interested in debt consolidation have poor credit and high debt.

As a result, they may face height interest on their consolidation which makes their monthly payment higher. It could make it higher than they are currently paying.

However, it is important to note that most likely, only the minimum payment is made and that gets you no closer to being debt-free. So you made need a larger monthly payment to reach your desired result. The amount of time it takes to pay off the consolidated loan may be longer than you think. The higher your amount of debt, the longer it will take.

It does not take much time at all to get into a debt problem. It often takes consistent and long work (repayment) to get out of it. Your best bet is to talk to a financial advisor to get educated advice on how to proceed. You really need to understand how that monthly payment impacts you. If you cannot afford it, you are not helping yourself at all.

What Types Of Debt Can I Consolidate?

Debt that can be consolidatedYou can consolidate debt to a lower interest in the way that you want. You can choose to consolidate any debt that you wish. If you are going to consolidate some debt, you should try to consolidate all of it. You can put yourself in a bad spot financially by consolidating only some of it. You should take a look at all the money you owe and get the payoff amount. The payoff amount may not be what you think, so you should contact your debtors to verify the amount.

Gather all those amounts so you can get an accurate idea of how much money you need to borrow in a loan.  When you look for a consolidation loan, you can find one that is for the exact amount that you need. This can give you a clear picture of your interest rate and monthly payment before you even apply for the loan.

This is helpful information for you when making these types of decisions. I mentioned this before, but it is important enough to repeat. Attempting to consolidate only some of your debt may not be a good idea. This could put you in a worse place financially. You still have to pay the individual debts that you did not consolidate in addition to the payment for the consolidated debt.

Why Do I Want A Lower Interest Rate?

Personal Loan interest rates can make a huge difference to your monthly payment. One thing to understand is your credit score directly impacts your interest rate. The better your credit score, the lower interest rate you can receive. And let’s be real, you want to consolidate debt to a lower interest rate. If you do not get a lower rate, then what is the point.

That being said, it is important to really understand interest rates. Forbes magazine shares an enormous amount of information about interest rates. You should learn as much about them as you can. It will be beneficial to you in the long run, if you can gain a better understanding of the interest rates.

What you need to know right now is how those interest rates impact the bottom line for you. That translates to the amount of money you pay for your loan. Interest is what the lender charges you to borrow money from them. This is how they make money. Let me show you an example to make it easier to understand.

Let’s just say you are trying to consolidate $20,000 worth of debt. You have a fairly good credit score, so you find a loan with 10 percent interest. That means the total interest you pay is 2,000. Your total loan amount is $22,000. If you are paying back your loan in 36 months, that means your monthly payment is $611.11. That might be a little high for you, so you choose to pay it off in 60 months instead. That changes your loan payment to $366.67.

Now, let’s take a look at that same scenario with bad credit. Since you have bad credit, your interest rate is 25 percent. You are borrowing$22,000 at 25 percent interest. That means your total interest is $5,000. Now, you are borrowing $25,000. For a loan of 36 months, you are looking at a monthly payment of $694.44. For a loan at 60 months, that payment would be $416.67.

The only difference between those payment amounts is your interest. It is best for you to shop around and find a loan with the best interest rate. It will save you money.

 

Should I Get A Personal Loan Vs Debt Settlement?

There is no one clear answer for everyone here. It really depends on your situation. A personal loan is a great way to consolidate debt to a lower interest. If you have poor credit, it might be hard for you to find a lender that allows you to borrow the amount of money you need. Then you find yourself borrowing some of the money you need and only paying off half of your debt. This probably does not put you in a better position. If you find a lender that gives you the money you need, the interest rate may be through the roof and come with a ridiculously high payment.

Debt settlement has some advantages. If you can get your creditors to agree to a settlement amount and you can pay a portion of your debt, it could be a win-win. The settlement might have the debt removed from your credit record sooner and improve your credit. Keep in mind, a debt settlement may come with fees. Often times to settle a debt, you work with a debt settlement company. These companies charge fees to handle this for you.

They negotiate everything with the creditor and handle all the paperwork, but you could pay a hefty fee for it. If they are not able to negotiate a fair settlement, it may not be worth it to you to pursue. You do not have to use a debt settlement company. You can work directly with the creditors.

There may be a clear choice for you. If there is, go with that. But, there may not be one. Maybe either situation is not appealing to you. Or, maybe they both have benefits. In that case, pick the one that works the best for your situation now. No matter what you choose, do not continue to spend money that you do not have. Getting yourself out from under a ton of debt is a great idea, but learn the lesson and do not go there again.

Should I Just File For Bankruptcy?

Do you remember the days when it seemed like everyone was filing for bankruptcy? The reason for that is because it used to be easy to do. You could file Chapter 7 bankruptcy, which eliminated all of your debt that a process of liquidating assets and getting rid of everything. Just like that, the debt was gone. It was a black mark on your credit report. You were told seven years, but really, you could start building credit in about a year. By the time you got to the seven-year mark, you were in fairly good shape, providing during those seven years, you worked on building up your credit.

Things have changed a lot over the years and Chapter 7 is not so simple or easy. First, you have to go through a process of debt settlement, but this time with the words bankruptcy on your credit report. That black mark is like a hole burned into your report. It is incredibly difficult to bounce back. Now, not all debts are resolved with bankruptcy.

There are items that fall outside of it. So, after going through all the headaches, and having a black mark, you still owe money to someone. Bankruptcy is far-reaching now. It can prevent you from getting insurance, and even a job. It honestly is not worth it today. There are much better ways to consolidate debt to a lower interest. Even when you feel like you have no other options, dig a little deeper and look a little more. There has to be something better than bankruptcy.

What If I Have Bad Credit?

Maybe you know your credit score already. If you do not, find out what it is. If you do not know it, you cannot do anything to improve it. You should always be working to improve or maintain a high credit score. Those three numbers are the difference between getting a loan, or not. They are also the difference in how much money you pay in interest. Sometimes, a bad credit score can prevent you from getting a job. It is that serious and you should take control of it.

You may realize by now that having bad credit can be a vicious little cycle. You have bad credit and high debt, but you cannot pay off the debt because all you end up paying is the minimum balance. It would be in your best interest to consolidate debt to a lower interest, but you are having a hard time getting a loan because of your bad credit. What do you do?

The truth is that it takes hard, consistent work to increase your credit score. It is possible, but it is not easy. You could consider a debt consolidation service for bad credit to help you get control of all of your debts. There are some benefits to this plan. You are letting a company handle your debts for you.

They take over and negotiate with your creditors and get all of your debt combined into one payment for you. You are able to focus on making that one payment. This is typically lower than all the other minimum payments you were making. If you stay on track and do not acquire any new debt, you can usually be debt-free in just a few years. There are some downsides to consider, too.

Interest Rate by Credit Score
There are certainly smart ways to use a personal loan, like to consolidate debt to a lower interest and pay off all of your bills. You can also use a personal loan to help increase your credit score. When you make payments on time and work towards paying off the debt, this increases your credit score. There are also some really bad ways to use a personal loan.

If you currently are swimming in debt, it is not a good idea to take out a personal loan to go on vacation, or to buy a new TV for your house. You are only compounding your current problem and most likely making it worse. It is never too late to take control of your debt. You may feel like you are drowning, but there are ways to swim. You have to be smart about your financial decisions.

Conclusion

I talked a lot about needing to consolidate debt to a lower interest. That is always a good move when you have a lot of high-interest debts that you cannot seem to get a handle on paying. There is one thing that you really must consider when looking to consolidate debt to a lower interest. You must be able to make the payments.

You should never enter into a loan agreement that you do not understand and always know what the fine print says. Make sure you always understand how much you have to pay and when. Plus, you should be aware of all fees. If there is something you do not understand, ask. Do not sign anything until you completely understand all of it.

Do not get yourself into something you cannot escape. Make sure you can afford the loan. There is nothing worse than taking out a loan you cannot afford to pay. If you feel confident that you are making the right choice and you understand all the information and you can pay back the loan, then proceed. Then you can begin to feel the freedom of being debt-free.