How to Use A Personal Loan for A Major Purchase

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OK, I’ll admit it. This probably sounds like a silly question. Why would we even open with something so… obvious?!

I’m glad you asked.

Too many times, we dive into new debt without fully thinking through what we’re committing to. If we don’t fully understand what we’re applying for, we can’t properly determine whether or not there may be loan options that make more sense for our situation. There are as many varieties of loans as there are borrowers and lenders, and unless we stop and think about the specifics of what’s in front of us, we’ll most likely agree to the first offer that waves “low monthly payments” or “zero percent interest” in front of us like a hypnotist’s shiny watch.

Any offer that doesn’t hold up well to a few simple questions probably isn’t a very good offer.

Use Your Personal Loan In The Best Way

The “personal” part means you’re taking out this loan based on your individual credit score, your credit history, your current income and employment, and your assurance of repayment. The funds aren’t committed to purchasing a home, a new vehicle, or starting a business. With most personal loans, once approved you can do pretty much anything you wish with the money. If you’re taking out a personal loan for a major purchase, the assumption is that you anticipate a major purchase of some sort – but that may not matter to the lender. What matters to the lender is how likely you are to make your payments on time, every time. Unless your purchase is specifically required as collateral on the loan, it’s only a personal loan for a major purchase because of YOUR decisions and goals.

Most personal loans are “term loans”. These are the most standard sort of loans with which most of us are familiar. You reach an agreement with a lender to receive a lump sum upfront, and you repay it over a set amount of time in regular monthly payments until the loan is paid in full.

Secured and Unsecured Personal Loans

A personal loan for a major purchase can be “secured” or “unsecured.”

“Secured” means you’re offering the lender some form of collateral – your home, or automobile, or perhaps the item you’re purchasing. If for any reason you’re unable or unwilling to make your payments, the lender has the right to take possession of the collateral to recoup their losses. Because the lender is protected in this way, secured loans are often easier to get approved even with less-than-perfect credit. Sometimes you can negotiate lower interest rates as well.

An “unsecured” personal loan for a major purchase relies entirely on your credit history and personal guarantee for approval. Lenders may require higher credit scores to approve unsecured loans, and interest rates will likely reflect their higher risk. On the one hand, you’re not risking personal property if anything goes badly; on the other, the loan will probably cost you more and defaulting will seriously damage your credit. Secured or unsecured, you want to make sure you’re able to make each and every payment on time, every time.

How Much Interest Will I Pay on a Personal Loan for a Major Purchase?

“Interest” is the primary cost to you of borrowing money. There are sometimes other fees or extra charges for late payments. But interest generally makes up the bulk of the lender’s profits. Most basic personal loans carry a fixed interest rate. Your monthly payments remain the same each month until paid in full. And you know the day you agree to the loan exactly what it will cost you and the date of your final payment.

Some lenders will offer adjustable-rate interest for personal loans as well. These usually start off at a lower interest rate, but after a set amount of time can rise or fall based on current market averages. The lower initial rate is tempting for many borrowers, but over time loans calculated under this method tend to cost more than locking in a set rate at the outset. That’s the risk of adjustable rates – you can’t predict for certain which way rates will go during the life of your loan.

Whether fixed or adjustable, your interest rate will largely depend on your credit history and your current three-digit credit score. If you shop personal loans today, you’ll find rates from major lenders are running anywhere from the single digits – around 7% or so – to 35% and higher. With a little searching, you’d no doubt find someone offering lower rates in the right circumstances. I’m positive there are other folks paying far more. It all depends on your specific credit history and timing.

What Determines My Interest Rate?

The stronger your credit history, the better the rates available to you. This doesn’t mean that every lender will offer you the same rate, however. Different lenders weigh the same factors in different ways. Some are quite myopic about your credit score and barely pay attention to anything else. Others look at your credit history to see what sorts of debt you seem to do well with and which sorts have led to difficulty. A chain-store retailer, for example, may give extra attention to your track record paying on store-issued credit cards and less attention to outstanding medical debt that hurt your credit score years ago.

In short, interest rates are strongly shaped by your credit, but they’re not 100% determined by it. Be prepared to do a little personal loan shopping until you’re confident you’ve found the best terms available to you.

Factors that Determine Interest Rate
  • Credit Score
  • Credit History
  • Employment Type and Income
  • Loan Size
  • Length of Term

Your Credit Determines Terms for Your Personal Loan

In the same way, your current credit history and three-digit credit score shape the rates and other terms available to you, the way you handle this loan going forward shapes your future credit history and credit score in return. As you make your monthly payments, your credit history grows stronger and your credit score gradually rises. It takes time to build, repair, or strengthen credit – but it may not take as long as you think it will.

One day, you’ll need financing again. You’ll want to make another major purchase, finance a vehicle, buy a house, pay for a wedding, or go on a vacation. The amounts and terms available to you when that day comes will be largely shaped by what you do between now and then. If you have good credit, you can make it better. If you have no credit, you can establish it between now and then. And if you have bad credit, you can start fixing it.

It may not be easy, but it doesn’t have to be as hard as it sometimes seems. And you don’t have to do it alone.

Should I Use My Savings Instead?

This isn’t a bad idea, especially if you’ve been saving up specifically for whatever it is you’re about to buy. On the other hand, you don’t want to empty your emergency funds or other savings accounts if you can avoid doing so. It’s sometimes worth financing small purchases (anything that costs less than a new car, for example) in order to keep money in reserve.

That’s assuming we have savings, of course. As Forbes recently reported, more and more of us are living paycheck-to-paycheck these days.

A new survey shows that 49% of Americans expect to live paycheck to paycheck each month this year. More strikingly, 53% say that they don't have an emergency fund that covers at least three months of expenses. At the same time, 91% say they want to develop better money habits this year.

They’re talking about our language. Taking more effective control of your personal and small business finances is what Loanry and the rest of the Goalry family are all about. It’s why we keep sharing these articles and offering free access to online money management tools. It’s also why you should keep reading.

If you can realistically put off your major purchase for another six months or a year until you’ve saved enough to simply pay cash, that’s often ideal. If not, the first “better money habit” you might want to develop is taking the time to explore your financing options before you buy.

Why Not Use Credit Cards?

You can certainly use your credit cards to purchase appliances, home electronics, or whatever else you need. It’s important to consider several things before making that decision, however.

High Interest-rate

Credit card interest tends to be higher than the rates you may be able to qualify for on a personal loan for a major purchase. A few percentage points may not seem like a big deal on paper, but over time, the dollar difference adds up faster than you’d think.

I’m sure you’ve noticed that paying your minimum payment on your credit card bill doesn’t seem to lower the balance very much from month to month. That’s because credit card billing is intentionally set up to keep you paying interest each month and very little towards the principal. A personal loan is a term loan. Your payments are the same each month and you know exactly when it will be paid in full. There’s no temptation to pay just enough to get by until next month.

You Shop More Than You Need With The Credit Card

Finally, credit cards make impulse buying much easier than it should be. You are thinking to buy a new laptop or desktop pc and you see in the store – it’s shiny and new and the description makes all sorts of promises. The plastic practically leaps out of your wallet or purse, begging to be used. How often have you been excited about a major purchase only to realize a few days later that you overlooked something very important to you in the excitement of the moment? That you probably didn’t need the “extended warranty” or should have negotiated better delivery options? Plus, it never hurts to let the salesperson see that you’re a methodical shopper, not likely to pull the trigger five minutes into your first visit.

Then again, getting a personal loan for a major purchase isn’t the time-consuming, laborious process it was a generation ago. You can log in from any connected device and in a matter of minutes submit your information.

“Zero-interest” Trap

So you’re at the electronics store, and there’s the amazing new 240” HD Quantum Plasma something-or-other TV and home entertainment system you’ve been lusting after ever since you first heard they were coming out. Or maybe your wife or girlfriend wants you to buy a brand new washer and dryer. The salesperson asks if you have any questions, then casually mentions that they have “interest-free” financing or that you get special terms if you sign up for one of their store credit cards today. Awesome, right?!

Well, maybe. Sometimes major chain stores offer promotional financing similar to what automobile dealerships do periodically. It’s possible that if you look over the details, you’ll discover it’s a pretty good way to get yourself that TV or entertainment system and finance it for practically nothing. The key is to really look at those details because other times you’ll find that “zero interest” only applies to the first few months, after which all of that interest is suddenly added back in and you’re actually paying a rate closer to your age than your shoe size. And most credit cards from chain stores are just that – credit cards. You may save a few points here or there when you use them at that store, but otherwise, they have the same advantages and disadvantages as any other card.

Be Patient and Compare All Loan and Credit Card Options

Store financing isn’t always bad. Like so many things, it’s all about knowing what you’re getting into. Compare the terms you’re being offered to those you get on your existing credit cards, then compare both to the terms you could get with a personal loan for a major purchase. You might be surprised how much difference you’ll find.

Oh, and by the way… are you SURE you need that 240” HD Quantum Plasma whatever-it-was? I mean, that thing will hardly fit in your house. Did you notice the great price on last year’s latest and greatest home entertainment system – the one they’re replacing to make room for this one? Ask your salesperson about that one; I’ll bet you could get a pretty good deal.

How About Rent-to-Own Places?

No. Just… don’t. Unless you for some reason need to fill a living room or office for a month or two then return it all, there’s no point even walking into most of these places. I’m happy to talk pros and cons of credit cards, dealer financing, personal loans, how to lower your interest, when to consider refinancing, etc., but if you’re seriously considering rent-to-own, I respectfully advise you save yourself some trouble. It’s better to simply withdraw all of the cash you have in your account and go throw it into the street and walk away.

Start Looking For Personal Loan Online With Your Cup of Coffee on the Table

The explosion of the internet in the 21st century has opened up possibilities inconceivable a generation ago. That includes a plethora of online lenders with low overhead and national reach. Have you ever noticed that in almost every other industry, companies compete for your business? In traditional lending, however, you’ve been expected to persuade financial institutions to accept you as a customer. That’s backward.

At Loanry, we maintain a curated database of reputable online lenders. When you’re ready, let us know a little bit about you and what you need. And we’ll hook you up with a lender we think is most likely to win your business. In other words, the lenders compete for you – not you for them.

It’s always up to you, of course. If you don’t like what they offer, you walk away – no cost, no-obligation, no hurt feelings. But I gotta tell you, from the feedback we get, that doesn’t happen very often. It turns out we’re pretty good at this, and oddly, we enjoy it.

When you’re ready to explore that personal loan for a major purchase, let us know.

Benefits of using an Online Personal Loan.

In Conclusion

If you’ve decided it’s time to make the move and finally get new tv and audio equipment or replace those old kitchen appliances, then it’s also time to talk about a personal loan for a major purchase. You have several options.

Your local bank or credit union may be willing to consider extending your credit for purchases like these, assuming you have pretty good credit and can document your income from the past several years. It’s also helpful if you have an existing relationship with the institution – maybe a checking or savings account you’ve had for a while. We’ve already looked at credit cards and store financing as options. And you’ve probably figured out I’m not a fan of rent-to-own.


Common Loan Definitions and Related Terms: Lending 101

The Merriam Webster dictionary defines a loan as a temporary lending of money to an individual or organization with an interest rate attached. Of course, while the dictionary makes it sound simple, loans are a little complicated.

An Abridged Dictionary of Loan Terms and Definitions

When you begin looking for a loan, you hear a lot of unfamiliar terms. You need loan definitions. Your lender probably won’t sit down and explain them all to you. We will. This glossary explains loan terminology in the most straightforward manner as possible. It breaks the terms down into categories that reference the context in which you’d read the term.

Loanry does not lend money. We function to help you find a lender. We set up a loan mall so you can easily shop personal loans among many lenders, almost as easily as you could visit a shopping mall to pick up a new pair of jeans. Because of this, we just do not have contact with you; your lender does. So, we want you to understand the loan procedure basics and loan terms. We find it better to educate you and give you the tools. The Loanry team wants you to ultimately save money. If you do decide to borrow then please use our library of personal finance education tools to borrow smart.

We are not trying to frighten you with this huge list of terms, but financial institutions use their own lingo. You will get a much better loan deal if you understand what the lender refers to with each term and know what it will cost you. We’ll break this up into types of loan definitions, for example, explaining fees in one section and references to loan terms in another.

The great news is that once you learn the lingo, it remains the same regardless of the loan type or the type of lending institution you find. Whether you need a student loan or a home loan or a car loan or some other type of loan, these terms apply to every situation.

General Loan Terms 101

Let’s start with the loan definitions you will come across regardless of the type of installment loan you consider. You’ll read these terms in all types of loan documentation.

This refers to the equal loan payments planned out during a specified period to pay off the debt on time.

An installment loan also gets referred to as an amortized loan due to its planned series of equal installment payments that repay the loan amount, plus interest without the need for a balloon payment.

The annual anniversary of the loan. The initial anniversary date occurs on the twelfth payment’s due date. Thereafter, it occurs on the same annual date noted on the MOP Promissory Note.

The percentage rate referring to the amount of interest charged on the loan

A final payment to fulfill the promissory note on an installment loan in order to discharge the debt. The balloon payment is typically much larger than the monthly installment payments.

The lender listed on the promissory note that is secured by a deed of trust.

The person eligible for the loan and who carries the primarily responsible for its repayment.

A term that refers to one of the five criteria that lenders use to determine whether to extend a loan to you. Lenders base your character on your credit score and credit history.

A term that refers to one of the five criteria that lenders use to determine whether to extend a loan to you. Lenders determine your capacity or ability to repay a loan, based upon your monthly income and your outstanding financial obligations.

A term that refers to one of the five criteria that lenders use to determine whether to extend a loan to you. Collateral refers to the property of merit you provide as a guarantee of re-payment when you apply for a secured loan.

A term that refers to one of the five criteria that lenders use to determine whether to extend a loan to you. Capital refers to your savings or other assets a bank can claim if you default on the loan.

A term that refers to one of the five criteria that lenders use to determine whether to extend a loan to you. The conditions of your loan describe how you intend to use the loan.

This refers to an extra payment that reduces the loan’s principal balance before the final balloon payment.

Essentially, failure to repay the loan as specified in the Deed of Trust or Promissory Note.

The term demand note refers to a loan the lender can recall at any time that has no fixed term or repayment schedule.

The phrase friendly loan refers to a financial agreement between friends, family, or business associates. These rarely have legal documentation since they are typically verbal agreements. This makes it tough to legally challenge them.

The term loan commitment, also called loan approval, refers to the letter issued by the lender that commits to funding for the specified borrower and property. It contains conditions that must be met prior to funding the loan. It expires 60 days from its date of issue.

A letter from the lender that denies a loan to the specified individual. Depending on the type of loan, the letter may state the denial reason. These reasons may include credit history or score, inadequate monthly income or lack of verifiable liquid assets.

The process of operational procedures management and the collection of payments related to a loan.

The process and procedures of risk analysis including loan factors such as credit score and history, assets, employment, etc. used by a lender to determine whether to extend a loan to an individual.

A letter from the lender acknowledging a borrower’s desire to withdraw their loan application/approval from the lender. It may or may not state the reason for withdrawal.

Home Loan/Mortgage Specific Terms

Some loan definitions only apply to property purchases. These terms apply to home loans, mortgages, investment property, business properties, etc. If you visit Accury, our real estate related partner site, you’ll come across many of these terms.

The monetary value of a single-family home as determined by an approved appraiser.

A person who assumes loan responsibility, but does not take a title interest or live at the property.

The legal meeting at which the property officially and legally transfers between the lender, buyer and seller.

A second individual who assumes responsibility on a loan. This person also has a title interest in the property, meaning they co-own it, and they intend to occupy it as a primary residence.

The date on which a deed of trust is officially entered on the books of the county recorder in the county in which the property is located.

Sometimes used instead of a mortgage, this financial security instrument conveys the property’s title in trust to a third party to ensure the payment of the promissory note. When the borrower pays off the loan, the deed transfers to the homeowner.

The initial payment offered for the purchase of a piece of real estate. The loan amount covers the difference between the real estate’s purchase price and the loan amount. While some loan types, such as VA loans, allow for a borrower to forgo a down payment, the typical amount is at least 10 percent of the home’s purchase price.

Equity refers to the property’s fair market value less the current debt on the property. You can leverage the equity on your property to receive a loan, also called an equity line of credit.

In escrow, a third party handles the funds disbursement and paperwork as an agent and intermediary for the buyer and seller.

When the home needs repairs or treatment for termites, the firm handling the escrow withholds funds until the repairs or treatment is complete.

This insurance document confirms the property is insured by a homeowners’ policy. This is not a copy of the insurance policy, but a letter or statement of commitment to insure a specific property beginning on a given date at a specified premium.

This is more commonly referred to as the homeowner’s insurance policy.

Repairs and/or additions made to better the status of the permanent structure of the primary residence.

The person designated by the Chancellor of each campus and Laboratory Director as the Home Loan Coordinator. This individual serves as the primary contact at the campus level for loan applicants.

An organization of homeowners residing within a particular development whose major purpose is to maintain and provide community facilities and services for the common enjoyment of the residents.

An insurance policy available to owners of private dwellings that covers the dwelling and contents in the case of fire, wind damage, theft, and, personal liability. The typical policy does not include flood or earthquake coverage.

A document required by the Department of Housing and Urban Development (HUD) that discloses all financial information related to funds received and disbursed at a loan’s closing.

This term refers to reports generated by the inspector the borrower hires to assess the home’s condition before closing on the home. These usually include a home inspection report and a termite report. The home inspection may include specific detailed reports on the condition of the foundation and roof, as well as, a geological report and a septic tank inspection, when a septic system is present.

Interest has two meanings. The first is a reference to the annual percentage of the loan you will also re-pay in consideration for the loan. The second meaning is also a business term meaning a share, title or right in a property or business.

Joint ownership by two or more persons giving each tenant equal interest and equal rights in the property, including the right of survivorship.

Instructions produced by the Office of Loan Programs for an escrow or title company detailing the documentation and procedures required before a loan is funded.

The ratio of the principal balance of a mortgage loan to the value of the securing property, as determined by the purchase price or Appraised Value, whichever is less.

The lender that holds the Deed of Trust or mortgage.

The borrower who named on a Deed of Trust or mortgage.

The process of paying off an existing loan and establishing a new loan.

The restoration of the primary residence. Generally, this includes repairs, improvements and additions to the permanent structure of the primary residence

Monetary Transfer Terms

Some loan definitions you need to know, refer to the manner in which loan monies transfer from the lender to the borrower.

Automated Clearinghouse (ACH)

A money transfer network that electronically transmits funds from one participating financial institution to another.

Electronic Funds Transfer (EFT)

Electronic Funds Transfer (EFT) refers to the actual transfer of funds through an ACH. In loan terms, it refers to the transfer of the loan amount electronically from the lender to the borrower. Other EFTs include direct deposit and debit card transactions.

Types of Loan Definitions

You’ll find many types of loans available. Financial institutions specialize. Some offer credit cards, some offer mortgages, some offer unsecured loans and some offer many types of loans. Here are the unusual terms you might come across when exploring loan types.

Bridge Loan

A loan type used in real estate with a loan term of less than 12 months. Considered a temporary loan, the bridge loan provides the borrower the net proceeds from an impending home sale so the borrower can purchase a new home. The borrower repays the loan with the proceeds of the home sale.

Deferred Payment Loan

A loan that defers all monthly interest and principal payments to the promissory note’s maturity date. The loan principal balance, plus the accrued interest comes due when the deferment ends. These are common with student loans.

Graduated Payment Mortgage

You will commonly see this written as GP-MOP. It refers to loan type related to the Mortgage Origination Program (MOP) that provides an initial lower interest rate than the standard rate. There minimum rate is 2.75 percent. The interest rate will annually increase by 0.25 percent to 0.50 percent until it equals the standard rate.

Interest-only Payment Loan

This type of loan does not amortize. During the loan term, the borrower pays only the interest each month. They re-pay the principal as a lump sum when the length or the loan term ends.

Unsecured Loan

This type of loan typically charges higher interest rates but requires no collateral. Credit cards and student loans are the most common types of unsecured loans. This is the most common type of consumer loan.

Fee Definitions

Application Fee

A nominal charge, typically of $50 or less, that accompanies the loan application. You pay this fee at each lender, for each loan application submitted. If your loan application gets denied, you will get charged another fee if you re-apply. Some lenders waive the re-application fee if you have good credit.

Administration Fee

You’ll incur the administration fee to process the loan application. This charge ranges between $35 to $50. Some lenders bundle this into the application fee.

Origination Fee

The origination fee typically amounts to about ten percent of the loan. It can be charged in addition to application and administration fees or in addition to them. It is paid from the loan monies, for example, if you apply for a $1,000 loan, you’ll receive $900.

Late Fee

You only incur a late fee if you pay your monthly payment late or miss your payment. These range from $30 to $37. You get charged for each late payment. You may receive one-time forgiveness of this fee, if your lender offers it.

Prepayment Penalty Fee

Your lender counts on making back the cost of loaning you money by charging interest. If you try to pay it off more quickly, by making double payments or large lump sum payments, in addition to your monthly installments, you’ll pay a fee. It is a hefty fee, generally amounting to about 80 percent of six months of interest.

In Conclusion

The plethora of terms and loan definitions can seem overwhelming but we hope this short glossary helps you better understand them. Loanry wants you to find a lender for your financing needs. We try to make it easy for you to find lenders and their loan offers. While we cannot promise you will find a lender here that can get you a loan, we can make it as simple as possible for you to look for the right lender who can help you. We even offer money tools to help you compare different types of lenders.

Our service lists numerous types of personal loan options from a plethora of lenders. These consumer loans include credit cards, installment loans, payday loans, mortgage loansstudent loanscar loans, and more with both short-term and long-term options. Our loan mall has lenders who offer high and low-interest rates. You’ll find options for those with great credit, bad credit, and no credit. Print this article or keep it open in a separate browser window while you loan shop. That lets you refer back to it easily. Make your loan search simpler. Start at Loanry and find the lender you need. Loanry connects you with reputable companies that may give you a loan if u qualify for it. You can check whether you qualify right now, by putting in your information below. We do not loan money, but we do make it easier to help find a lender for you.


Your Guide to Personal Loans for Emergency Home Repairs

As a homeowner, there are times when you will have to carry out emergency home repairs. Whether the repairs are from faulty systems, wear and tear, or natural phenomena, it will be important to figure out where you will get money to finance the works. Personal loans for emergency home repairs are becoming increasingly common and popular. However, you should familiarize yourself with the products and the various options available to you before taking out this type of personal loan.

A good number of consumers do not know where to get a loan when they need extra cash for such an emergency. This is why we make it easy for consumers to not only find a lender but also help them avoid common scams. By facilitating the process of financing home repair services, we help ensure a seamless process and convenient borrowing experience. Here is what borrowers need to know about emergency cash loans for home repairs.

Emergency Home Repair Loans

Sometimes, you may find yourself stranded when your home needs emergency repairs, but you do not have money to pay a contractor to do the job. What most people do not know is that personal loans for emergency home repairs can make for a great way to access the financing you need, allowing you to pay back the loan later over a period.

Emergency home repair loans are one of the many types of personal loans available in the loan market. This type of loan would be ideal in case you do not qualify for other loans if the amount required is too small to take out a home equity or you cannot afford to pay for the emergency home repair yourself. Just as with any other type of personal loan, home repair loans have a fixed interest rate and are paid back in specified installment amounts over a fixed time.

Numerous lenders offer repair loans for emergencies. However, the loan terms vary by the lender. This means that you should not only find the right lender for your circumstances but also understand what you are getting yourself into before making a financial commitment. In short, borrowers have to take time to shop for emergency repair loans and carefully consider the different options available.

How a Personal Loan Works

The period after your home has been affected by destructive events can be characterized by confusion and a feeling of helplessness. This could leave borrowers wondering where to get a loan. However, before taking any step, it would be essential to understand how these personal loans work.

Personal loans are consumer loans that are granted for personal, family, or household use. As installment loans, it means that borrowers borrow a fixed amount of money. And pay it back in monthly installments over the life of the loan. This period will normally range from 12 to 84 months, with the borrower paying back both the principal and accrued interest by the end of the period. The account is usually closed once the loan has been repaid in full.

There are two types of personal loans: unsecured and secured loans. Unsecured loans are not backed by collateral, meaning that the lender will determine whether you qualify for the loan based on your financial history. Secured loans, on the other hand, are backed by collateral. As such, the lender will have the right to claim your asset if you are unable to make your payments.

Personal loans for emergency home repairs are consumer loans meant to carry out repairs after your home has been damaged. In fact, using a personal loan to carry out home repairs is one of the smart ways to use this type of loans. This is because home repairs and improvements will help to increase the value of your property. Similarly, by making your home more functional and comfortable, you will enjoy the peace of mind you need to do other things productively.

Several tools and dollar banknote in pocket.

Common Home Repairs

Home repairs come in different forms. While some make for small projects that you can do yourself, others are larger and will require that you call in a contractor. If you find yourself in need of personal loans for emergency home repairs, you should take time to loan shop to ensure you find the right product for your needs.

  • Water heater replacement – if your water heater is older than 10 years, there is rust in your faucet water, rumbling and noise or water leaking from the heater, you should consider replacing it.
  • Roof repair – roof damage can occur as a result of weather damage, damage from trees and power damage, missing or cracked shingles or leaks.
  • Frozen or broken pipes – decreasing water pressure, water discoloring, and reoccurring leaks are some signs that you may have broken pipes and need emergency home repairs.
  • Damaged gutters – if you notice broken seams where gutters meet, cracks and leaking or water around the foundation, you should determine whether you need home repairs. You can take personal loans for emergency home repairs to help you cover the costs upfront.
  • Restore walls and ceilings – discoloration, holes, and dents on walls as well as a buckling ceiling will need to be repaired. If you notice such defects, it could be time to call a contractor.
  • Replace flooring – you may need to take out emergency cash loans to replace flooring that is stained, chipped, weathered, or has stains from flooding or leaks.

Ways to Finance Emergency Home Repairs

While personal loans for emergency home repairs can help cover these costs, this is not the only way to finance such repairs. Before you start thinking about where to get a loan, you should explore these options to find out if they will work for you.

Before paying for any home repairs out of your pocket, you should find out if the damage is covered by your home insurance. You may only have to pay the deductible, a factor that will save you a significant amount of money.

How much equity you have in your home may make it possible for you to take out a home equity loan or line of credit. However, you should carefully think about interest charges to determine whether taking this step will be worth the while.

There is a possibility you will qualify for a program issued by the local Housing Authority. This will depend on your age, location, and income. Homeowners may also be eligible for repair loans and grants offered by the government.

If your home suffers damage as a result of a natural disaster, you may be eligible to receive funds from the Red Cross or the Federal Emergency Management Agency. It is important to note that these funds are suppose to cover only small repairs that ensure safety and sanitary living conditions.

Depending on the circumstances, there are several nonprofit organizations that may be willing to help home repairs.

Other Options to Consider

In addition to the options mentioned above, there are other alternatives to personal loans for emergency home repairs. Here are some of these options that are available to almost every homeowner.

Before taking out personal loans for emergency home repairs, you should consider the other options available to you. There could be more affordable ways of financing home repairs.

  • Credit cards – you may want to consider financing some of the home repair projects using a credit card. You will be able to save some money if your card has an offer of 0% introductory APR on purchases. This would also be a great way to access the money you need within a short time and without much hassle.
  • Peer-to-peer loans – this is a creative way to raise the money you need to repair your home. Several investors fund a loan by providing a small amount of money to various projects as a way of diversifying risk. Most of these loans have relatively short repayment periods, meaning less interest and allowing you to get out of debt quickly.
  • Alternatives other than loans – there are other ways that you can finance repairs apart from loans. You should consider saving up cash before such emergency repairs become necessary. This effectively means planning for such occurrences in advance. In case your project can be completed in phases, you can pay for the project when you have money for each phase.

Emergency repair loans require that you pay back the money you borrow with interest. Borrowers should have this in mind when applying for the loans.

Factors that Determine Your Eligibility

Even as you shop for a repair loan, it would be important to check the eligibility criteria for most lenders. This will go a long way in helping you to avoid the frustration associated with getting your loan application rejected.

Here are Some of the Factors that Determine Your Eligibility for Personal Loans for Emergency Home Repairs
  • Your income – lenders will only be willing to make loans to borrowers who can pay them back. Depending on how much you are looking to borrow, the lender will consider your income to determine whether you can afford the loan. Borrowers are more likely to be approved for a loan if the payments are a small portion of what they earn.
  • Your employment history – since most people get their income from employment, most lenders will want to know if your work situation is stable. Borrowers with steady employment will find it easier to access the funding they need to repair their home.
  • Other debts you owe – apart from income, the number and amount of debts you owe will affect your likelihood to pay back. It may be difficult for lenders to give you another loan if you are already drowning in debt.
  • The loans you have applied for recently – lenders consider you to be a high-risk borrower if you have several loan applications over a short period in the recent past. Going on a borrowing spree is one of the signs of a possible default.
  • Collateral – in case some of these factors make it difficult for you to qualify for a loan, some lenders may consider offering you a secured personal loan. If you have collateral to guarantee the loan, you may increase your chances of getting an approval for the loan.

Another factor that will play an important part in determining whether you qualify for these loans is your credit score. It is important to have a good credit score to increase your chances of qualifying for a loan as well as accessing higher limits.

Best Ways to Qualify for a Personal Loan

Every borrower will want to increase their chances of getting approved for personal loans for emergency home repairs. Here are some of the best ways to qualify for loans.

  • Ensure your credit is in good shape – your credit score and history is what lenders rely on to establish your financial habits and borrowing behavior. Since emergency home repairs are usually unexpected, you should prepare for such incidences by improving your credit score early enough.
  • Reduce your debt as much as you can – your debt-to-income ratio, as well as the amount of debt you owe, will determine whether you qualify for a personal loan. To increase your chances of qualifying for these loans, you should try to reduce your debts as much as you can.
  • Consider a co-signer – in case you have a low income or poor credit score, getting a cosigner with a higher income, and better credit score will increase your chances of getting a loan. By agreeing to be your co-signer, the person agrees to pay the loan in case you default, reducing the risk to the lender.
  • Personal loan shopping – shopping around for loans will help you know where to get a loan. Such information will help you identify lenders with flexible requirements and loan terms.

Why Consider a Personal Loan for Home Repairs?

There are many reasons why you should apply for and take out personal loans for emergency home repairs. Considering that events that lead to emergency repairs occur unexpectedly, these loans allow you to start repair works immediately. Defects in your house can greatly compromise the functionality of your home. With home repair loans, you will have the money to cover the costs upfront and payback in installments that are spread out over time. Compared to credit card loans, personal loans for emergency home repairs have a lower interest rate. This means that the cost of borrowing will not be as high, allowing you to pay back the loan comfortably without much strain. These financial products can also help you make repairs conveniently and affordable.

Home repair loans are a type of personal loan. As such, the loans require that borrowers pay fixed monthly installments over a specified period. With such an arrangement, borrowers will be in a better position to plan their finances and make payments on time.  Another reason to get a home repairs loan is that it allows you to access a considerable amount of money. Most lenders will actually offer the amount you need to ensure that you complete your project. It would be important to find out how much you will get from each lender when looking for where to get a loan.

Factors to Consider Before Taking Out the Loan

There are several factors that borrowers should consider before taking out these loans. This will help them to find the right loan for their needs. And to understand the financial commitment they are making as they take the loan.

  • Find the right lender – the importance of finding the right lender cannot be emphasized enough. As you shop personal loans, take time to go through the terms of the lender to avoid making common mistakes.
  • Interest rates – different lenders have different interest rates for their home repair loans. You should remember to compare interest rates from several lenders to ensure that you take out the most affordable loan.
  • Fees – just as with interest rates, the fees charged on the loan will directly affect the cost of borrowing. Make sure you find out whether there are any hidden loan fees and charges.
  • Loan term – how much time you will have to pay back the loan will be an important factor to consider. This will determine how comfortable you will be able to service the loan.
  • The amount you need – the amount you need to carry out repairs should guide you on how much you should borrow. The loan amount will, in turn, affect how much you will pay in interest as well as determine whether you will get your application approved.
  • Your ability to repair – most borrowers take out loans once they find out they qualify without taking time to evaluate their ability to repay. Ensure that you will be in a position to pay back the loan without financial strains that could result in frustration.
An interior view of a house attic under construction.

Disadvantages of Personal Loans for Emergency Home Repairs

For all the advantages associated with personal loans for emergency home repairs, they are not without some disadvantages. Knowledge of the downsides of these loans will help you decide whether you need to borrow money.

Every time a borrower applies for and takes out a repair loan, it shows on their credit report. Too many applications over a short period will make a borrower less attractive to lenders, making it harder to access loans in the future.

Any rejections will also show on your credit report, a factor that could damage your credit score. It is important to not only check your score before submitting your application but also take the necessary steps to boost a weak score.

Just like any other personal loan, late or missed payments on these loans will hurt your credit score. It is critical to ensure that you can afford the loan before approaching lenders to funds to finance home repairs.

In case you have a poor credit score, there is a good chance you will pay very high-interest rates. Financial experts advise borrowers to resist the urge to apply for these loans in case the lender’s interest rates are too high.

How to Use a Home Repairs Loan Wisely

While emergency loans can help you meet your financial needs, they can also land you in a lot of financial trouble if not used correctly. Borrowers should ensure that the money borrowed is used in the way it was intended.

Before you take out personal loans for emergency home repairs, it is important to know the specific types of repairs you would like to do. You should consider listing the repairs down, before working with your contractor to estimate the cost of each of the repairs. This will help you to determine how much you need for the project. Once you have received the funds in your bank account, you must ensure that you stick to the plan. All the money meant for home repairs should be used for that purpose without diverting it to other activities. By doing this, you will benefit from the loan in terms of restoring your home to its rightful condition and increasing its value.

Choosing the Right Lender

In addition to choosing the best personal loans for emergency home repairs, borrowers should also pick the right lender for their needs. Below are some of the ways to identify a good lender with whom to work.

  • Recommendations from friends and family – friends, family, and colleagues who have taken out these loans before can help you to identify reliable lenders. Based on their experiences, you will be able to gather information relating to the terms of different lenders. Some may also suggest lenders who offer tailored loan products to consumers.
  • Loan brokers and aggregators – the process of looking for the right lender can be tedious and time-consuming. Working with experienced loan brokers and aggregators will make your work easier. You will not only save time but will also get a list of potential lenders with whom you can work.
  • Doing research – one of the best ways to find a lender is to shop for personal loans. Today, it is possible to use the internet to access reviews from former customers. And also learn more about different lenders. There are also third parties that can help borrowers to identify reliable lenders. We make it easy for consumers to find reliable lenders who give personal loans for emergency home repairs.


Lastly, borrowers should remember that they have the responsibility to pay back their personal loans. This requires that they not only make sure that they can afford to make payments but also that they put in place measures to see to it that all payments are prompt.

With this information, borrowers will not only know where to get a repair loan but will also be in a better position to make informed decisions. Taking the best personal loans for emergency home repairs can help borrowers to enhance the functionality of their homes. To ensure that the funds help to meet the set goals, it would be important to do some research. One of the best ways to achieve this is through a third party that is not a lender, but helps you find one. We strive to help consumers to find reliable lenders easily and avoid falling prey to scams. Work with us to improve your borrowing experience and find a home repair loan that might meet your needs.


Secured Loans for Bad Credit: Personal Loans 411

Many of us are concerned about our credit scores. We know that those three numbers make a big difference in our lives. They dictate if we can get a new car, or house, sometimes even a cell phone. We all know what it like when unexpected expenses come up and we do not have the money for them. It can be a scary place to be. There may be ways to find help. Continue reading to find out more information about secured loans for bad credit.

Secured Personal Loans for Bad Credit

A personal loan is money that you can borrow from a lending source, such as a bank, or credit union. You pay the money back in regular monthly payments for a set amount of time. The payment amount is set, so it will not change. Personal loans have interest that you also payback. The interest rate can be anywhere from 6 to 40 percent, depending on your credit score.

Lenders look at many factors when determining if they should lend you money. Your credit score is one of the first things at which a lender looks. They also look at your actual credit report and your debt to income ratio. The higher your credit score is, the better interest rate you receive. Some lenders will not give a loan to someone with a credit score below 600. Others will, but it will have a high-interest rate. When you have less than perfect credit, shop personal loans to find the best rate you can.

When looking for a loan with poor credit, you should make sure you have a good understanding of the loan process. Read all of the fine print and be sure you understand everything. There are two major types of loans, secured and unsecured.

What is the Difference Between Secured and Unsecured Loans?

If you are interested in obtaining a personal loan, it is important that you understand the difference between secured and unsecured credit. A secured loan is one in which you give something as collateral for a long. That makes the money you are borrowing more secure. If you do not pay back the loan, the lender can, and will take the item you have promised as collateral. In most cases, the collateral is your house or vehicle. If the lender has to take your home and it is not enough to pay off the loan, you may still owe money. Usually, secured loans for bad credit are the route you may have to take if you have a low credit score.

An unsecured loan is one that does not have collateral attached to it. However, that does not mean that if you default, or do not pay, on your loan that your assets cannot be seized. The lender can still have rights to the things that you own. It really depends on where you live how much a lender can take from your assets. In general, the lender is risking more with an unsecured loan, which is why the interest rate may be higher.

What is the Difference Between Secured and Unsecured Credit Cards?

In addition to unsecured and secured loans, there are also unsecured and secured credit cards. A secured credit card comes from a bank and has money behind it. It is secured by money that you have deposited into the account from which the credit card is using money. That also means that the limit on a secured credit card is based on the amount of money in the account. These cards are great for those with no or bad credit history. This is a great way to build or repair your credit. By making payments on this credit card, it positively impacts your credit score. Those timely payments show up on your credit report.

An unsecured credit card is what most people think of as a credit card. You do not have collateral with this type of credit card. In this case, your credit limit is tied to things like credit score and payment history. There is a downside to having an unsecured credit card. You should keep in mind when considering an unsecured credit card that it may have high-interest fees. Be sure to take a look at the interest you on any credit cards you have. In addition, if you carry a balance each month, it may take you years to pay off the fee and interest on your card. There could be fees that you are not aware of. You must pay attention to your credit cards, their balances, and your statements. Make sure your credit card does not have an annual fee. If it does, find another one. There are plenty of cards without annual fees.

Good Way to Build Your Credit

This can also be a good way to build your credit, but be smart. Purchase small amounts on your credit card. Pay it off every month. This way you will not get yourself into a situation in which you will not be able to find a way out. Lenders pay attention to if you pay off your bills on time. If your credit card does not have the best terms initially, as you improve your credit, you may be able to get better terms. You can also find a different credit card more easily with improved credit. Typically, you need secured credit cards or secured loans for bad credit.

Can I Get a Personal Loan with Bad Credit?

This is the question that many people ask when they feel they have no options. When you are already living paycheck to paycheck and an emergency comes up, what do you do? The short answer is yes, you can get a loan with bad credit. The reality is there are more details in which you should be aware of.

First, let us talk a little about credit. A credit score can be anywhere from 0 to 850. 0 shows up for someone that has no credit at all. That can be as bad as low credit because lenders do not know your creditworthiness. An average credit score ranges from 650 to 700. Anything below 650 is bad. Credit scores in this category are considered high risk. Lenders are less willing to lend to those in the high-risk range. If you are in that category, you should consider secured loans for bad credit. You may also consider short terms loans. More about those a little further down in this article.

High-Risk Category

If you fall into the high-risk category, getting a loan is not the only problem you may have. You may not be able to get an apartment, a car, and in some cases even a job. Do not despair. Even if you are in the high-risk category, you can still get a loan. However, you need to use that loan wisely. You may need a co-signer on your loan. This means that you need someone to agree you will pay back your loan. If you do not pay it back, your co-signer has to. Be sure to pay back your loan, if you have a co-signer. You do not want to mess up that relationship.

Get a Loan From a Credit Union

You may be able to get a loan from a credit union. Credit union’s rules tend to have more relaxed rules when it comes to lending. They are more often willing to loan high-risk individuals money. You can also shop online for loans. They usually have higher interest rates, but you can get secured emergency cash loans.

No matter what type of loan you get, you must pay it back. Do not get a loan that you cannot pay back. All this will do is put you in a worse place financially than you are right now. It will hurt your credit score. Creditors will call you. That is a stress that you do not want. If you get a loan, make sure it is for the smallest amount you need. Do not get a loan for more money than necessary. Getting a small personal loan is a great way to increase your credit score. It only works if you pay back the loan timely. You may need to consider secured loans for bad credit.

Are Payday Loans a Good Idea?

When your credit is less than stellar, you may wonder how you get secured cash loans bad credit? Whatever approach you take, you must do so carefully. Any loan can be good or bad, it depends on how you use it. There are some ways to get fast money when you have less than perfect credit. While there are benefits to these types of loans, there are pitfalls. Arm yourself with knowledge about the various types of loans and the hidden costs. You want to make a smart decision that helps you build your credit, not hurt it.

They are a type of secured loans for bad credit. They do not have collateral associated with them. Payday loans have a short repayment time frame. You usually have to repay within a month. That is not much time. However, if you know that you are getting a bonus check, or you are expecting money owed to you, then this might work.

High-interest Rates and Fees

These loans have extremely high-interest rates and fees. Each state determines the maximum amount a payday lender can give. The state also sets a cap on the allowable fees. Even with the caps, you can pay well over 300 percent in interest charges. A payday loan must be paid back all at once. When you make the payment in 30 days, it is for the full amount. When you sign the contract for the loan, the lender requires a check that is post-dated. They may also get permission from you to debit directly from your bank account on a certain date. They make sure they get their money. If you cannot repay them, you can take out another loan to pay what you owe. This can put you in a terrible cycle of taking out a loan to cover the cost of an existing loan. It is a cycle from which you cannot easily remove yourself.

Payday loans should be a last resort. You should only get a payday loan if you are guaranteed to have the money to pay it back in 30 days. In addition, paying back this loan should not put you in a worse place. There may be other secured loans for bad credit for you to consider.

What Are Title Loans?

Title loans are secured loans for bad credit. Like payday loans, they also have a short repayment schedule. This is another way to get a quick cash loan. Title loans differ from payday loans in that you are putting up collateral for this loan. You are using your vehicle. Lenders will accept cars, motorcycles, trucks, and SUVs as collateral. The vehicle must be worth enough to cover the amount of the loan. These loans also have a high-interest rate. It can be well over 300 percent. Title loans must also be paid in full at the time you make the payment. This can put you into that same cycle of acquiring new debt to pay off the old debt.

To obtain a title loan, you must bring the title of your vehicle to the lender. The company puts a lien against your vehicle until you pay off the loan. The maximum you can borrow is about one-third of the value of the vehicle. Some lenders will give you up to one half. Many states cap the loan amount at around $5,500.

These lenders do not run a credit check for this type of loan. Since you are using your vehicle as collateral, that is all the lender needs to give you money. If you do not pay them back, they get to keep your vehicle. It is that simple. The lender also reports your default on the loan to the credit bureaus. You lose your car and your credit score is impacted. There may be better ways for you to get secured loans for bad credit.

Consider All the Different Options Available

There are good and bad options for secured loans for bad credit. Some of the most important things are fully understanding the loan terms. Before you sign anything, make sure you understand what you are responsible to pay and when. Make sure you are aware of any fee and charges. Read all of the fine print and make sure you understand it. Do not put yourself in a worse place financially by not paying the loan back. Make sure that you can afford to pay the loan amount every time you have to pay for it. It does not matter if you make one payment in full, or a set amount every month, be sure you can pay it. If you do not pay back your loan, it impacts your credit. Lenders will always get their money.

Also, you should make sure you find the best lenders for your situation. And if you want some help with that, Loanry is here.


There are many potential options for secured loans for bad credit. Ultimately, you are the only one who can decide what is best for you. No matter what route you decide to go with a personal loan, you should find out as much information as possible. You should understand your credit score. You should also know what it on your credit report, so you can fix things that are incorrect. When looking at your credit score, look for inaccuracies. If you see them, fix them. This could improve your credit score. You should also know what your debt to income ratio is and find ways to improve it. One way to improve your debt to income ratio is to pay off as much debt as you can.

I know you are thinking, well if I could do that, I would not need a loan. That is possibly true, but there are ways you could save money. You could spend less money and use that savings to pay off debt. You can look for ways you are spending money that you are not using, like a gym membership, for example. If possible, you can get a part-time job to earn some extra money. That may not be possible for everyone, but it is an option.


How Much Income Do You Need to Get a Personal Loan

Applying for a personal loan is easy, but to get an approval is the hard part. There are several factors that determine your ability to get a personal loan; income being one of them. Therefore, the question “How Much Income do you Need to get a Personal Loan” is a relatively important one. Before we answer it, let’s talk about personal uses and the basics.

Some seek a personal loan to consolidate debt or improve their own credit score. It’s all about making available credit more accessible for other parts in your life. When it comes to gaining financial empowerment, one way to achieve this goal is securing a personal loan to improve your own credit situation.

Unlike other forms of financing, unsecured personal loans don’t require collateral to be put up before gaining approval from a lender. It’s important to remember that you will have to pay back the loan at some point. You can make the process go much easier if you plan out a timeframe to pay off the personal loan as this approach avoids any chance of being overwhelmed by the entire process.

How Much Do You Need to Make to Get a Loan

A personal loan is requesting a set amount of money that can range from $1,000-to-$100,000. The lender’s requirements are all based on personal and financial information. One of the main requirements answered by the information submitted is how much income do you need to get a personal loan.

Usually, the minimum salary requirement for how much income do you need to get a personal loan is in the area of $15,000-$20,000 a year for the lowest loan amounts. If you’re asking for a $100,000 loan then your income needs be about 10x the minimum salary. You may get up to $100,00o with high income of at least $150,000 a year.

It is important to note that when it comes to getting a personal loan there is no set income requirement. The above figures are simply average markers. Each lender will have difference requirements. Income also just one factor in the lenders underwriting criteria.

What Is The Minimum Salary to Get a Personal Loan

When you’re applying for a personal loan, the lender must be confident that you have the capability to repay the loan. There is no set dollar amount that can secure a personal loan. Instead, you must at least qualify for the minimum income requirements that do vary with the terms of the personal loan. Again, it will come down to how much income do you need to get a personal loan.

The one plus that is in your favor will be having a good, steady income. But, if you have high debt, you might not be able to meet the monthly payment requirements. You will need to show how much disposable income is available each month as this number will show your money management skills.

Disposable income is the portion of your monthly salary that remains after you pay bills, rent and other living expenses. Many lenders call this dollar figure a borrower’s monthly cash-free flow. Often, they will adjust the final total after taking into consideration the amount of taxes paid and other financial obligations

Do You Need Proof of Income For a Personal Loan

You will need to show proof of income when applying for a personal loan. The standard form of documentation to prove income is showing pay stubs for a period of three months. Lenders use this proof to verify the borrower’s ability to repay back a personal loan. Before personal loan shopping based on your income, it’s smart to research the type of proof of income most lenders are looking for on an application form before approving a personal loan.

The reason to research how to get personal loan online could be if a proof of income verification is missing from the application packet, then your approval for a personal loan could be greatly jeopardized. Plus, research this topic will help answer how much income do you need to get a personal loan.

Why Does a Lender Need This Information?

Showing pay stubs will confirm that you’re a “W2 employee”. Other workers like self-employed or independent contractors will have to show other forms of employment documentation that will confirm their income amount. Lenders will need verification of their current financial state before determining how much income do you need to get a personal loan.

If your occupation on a tax form is self-employed or independent contractor, then you will also need to show proof of income. Usually, a lender will require you to show some form of regular depositing into your bank account as this will confirm that you do have a consistent source of income coming into your home each month. Other financial documents may be required during the review of your personal loan application. This information will help to determine how much income do you need to get a personal loan.

How Much Personal Loan Can I Get on My Salary

When, it comes to obtaining a personal loan, the guidelines on what a person can afford are very clear. It’s important to take a look at your own financial situation as there are questions that must be answered before moving forward. The biggest question is how much income do you need to get a personal loan.

One way to get a better understanding on how much personal loan can a person get on their salary is beginning the application process with a lender. After all, the lender’s main interest is keeping their business doors open. This is only accomplished by limiting the amount of money offered to potential borrowers. They achieve this by offering the right affordable dollar amount to a borrower who then can pay it back over time. Lenders determine how much income do you need to get a personal loan by the information submitted on the loan application. This course of action prevents them from losing money on the loan.

Income Types to Calculate

Most personal loans come with terms of two-to-five years. Most lenders will require you to fill out an application and authorize a credit check. The types of personal loans are either a single or joint. The difference is requiring one signature or multiple signatures on the final documents. The typical underwriting requirements include a minimal credit score between 640-750. It also requires your debt-to-income ratio being no higher than 45 percent.

The debt-to-income ratio will show how much debt you have already accumulated in your lifetime. The percentage number will determine whether you gain approval for the personal loan. In some cases, it will be the deciding factor over your income and credit rating score. Some lenders won’t approve a borrower over the above number (45%) on debt-to-income ratio.

Even, if you have a low percentage number, but have a large amount of credit card debt, you may have trouble getting approval for a person loan despite holding a high-salary job. The main reason is you’re too big a risk defaulting on the loan.

Here are important financial definitions in relation to determining how much income do you need to get a personal loan:

Income Definitions

  • Term is the length to pay back the loan. Often, when a lender is calculating and determining how much income do you need to get a personal loan, they will ask you how many years you need to repay the loan.
  • Interest Rate is the percentage of your loan balance that the lender will charge a rate over time.
  • Gross Income is all money you earn and account for on income taxes for the year. This figure excludes untaxed income like government benefit payments or money you collect from renting property.
  • Untaxed Income is funds you recieve monthly, but aren't subjected to paying taxes each year. This type of income could include work pension, social security, disability and child support. All fall under the untaxed income umbrella
  • Rental Income is the amount of money you earn from renting an apartment, home or any other living quarters. Once again, it's the number accumulated before taxes.

Individuals that fall short of the above criteria can still obtain a personal loan. At least, as long as they can afford to make monthly payments to repay the lender back. You may be eligible to borrow an amount of money between $1,000-$5,000. How much income do you need to get a personal loan you will know when you look at the information on the application.

Borrowers will list all income earned as some falls under the heading entitled “reasonable expectation of access”. This terminology has a broad definition. Unfortunately, there is no guideline to calculate irregular income unless a person reports this amount on their tax return. It’s smart to use common sense when reporting income on a personal loan application. This information will help to answer how much income do you need to get a personal loan.

Other Factors Besides Income

Lenders look at factors like your credit score, your debt-to-income ratio (DTI), what you intend to use your funds for, number of other times you’ve looked for credit and sometimes even look into your employer.

The loan can serve in a number of ways. Some borrowers will use the money from a personal loan to get through an emergency situation. Others will pay off outstanding credit balances in order to get their finances in order to make a “big ticket item” purchase in the future.

The basics of a personal loan for a borrower is having a fixed monthly payment plan, a repayment timeline and securing an interest rate that is based on your current employment status and how much money you make in a given year. Besides offering your own credit score, you will need to figure out the exact amount of money needed to borrow, and the length of time you will need to pay back the loan. This information helps the lender determine if you (the borrower) have the capacity to repay a personal loan back.

The lender will want some assurances that you will be able to make the scheduled payment each month and still have the ability to weather other untimely expenses that will add debt to your finances.

What Credit Score Do I Need For a Personal Loan

Credit scores play a major role in what type of personal loan a person can obtain. Most lenders will offer personal loans up to $50,000. Other lenders will offer loans up to $100,000 to those borrowers who have an excellent credit score and hold a high income job. The more positive you can be in your credit history, the more money you will likely get in a personal loan.

714 is the average FICO score in the U.S. in 2021.

An average credit score is between 620-679 and a poor credit score fall under 580. If your credit score is below this range, you can still secure a personal loan. You may have to use your personal (car, home or land) property as collateral to gain a secured loan from a lender. These types of personal loans come with a higher interest rate. It remains all throughout until you pay back the lender in full. Plus, the lender will repossess the property if the borrower defaults on the personal loan.

Credit score scale

Using Collateral to get a Personal Loan

Most cases, individuals aren’t required to put down something of value as collateral in an unsecured loan. The lender may place a cap dollar amount on how much a person can borrow based strictly on their yearly salary. If you don’t own property that has some value, then you might want to reconsider your situation and work on rebuilding your credit score.

If you have provided all the information necessary to qualify for a personal loan, then once you’re approved, the money will be deposited into your bank account as fast as one business day. However, this is all based on a lender’s personal loan process.


How Can I Get a Personal Loan up to $10K?

Most people are going to need emergency financing of some kind during their lifetime. People borrow money for school, large purchases or to help cover expenses until their next payday. Whether you have an excellent credit score or a poor credit score, there are loan options for borrowing.

Money problems are the leading cause of stress in America and more than 85% of adults report they are worried about money, according to a recent poll by Varo. More than 30% said they felt stressed about their finances constantly.

If you are struggling with a financial burden, immediate needs you can’t afford or encountered an unexpected emergency, then you know how frustrating it can be. You want to borrow money, but you don’t want to end up in a rut.

We want to make the process transparent and as stress-free as possible. Check out your options and consider what loan will help you with the financing you need.

What Kind of Short Term $10k Loan Can I Get?

When you are in need of fast cash, there are lending options available. If you need a personal loan for $2,000 or even $10,000, you’ve come to the right place!

Whether an emergency has you in a bind or you need money to help make ends meet for a short time, a personal loan can help bridge the gap between your need and your pay. There are many loan options for borrowing, but let’s look at the three most common loans for everyday personal needs.

Personal Loan

A short term personal loan is usually unsecured (not backed by collateral). And it comes with a fixed repayment schedule. The loan has a fixed interest rate that is likely going to be lower than a credit card or payday loan rate.

They can be both secured or unsecured, depending on what you can put up for collateral and how much you need to borrow. Personal installment loans can be ideal for paying off debt and consolidating the payments into one place with a fixed amount and fixed interest rate.

However, it can be difficult to get a good personal loan if your credit score is low. If you use Loanry to shop for a personal loan lender, you will be able to find a lender in one place without multiple hits to your credit score. You can shop the Loanry store to find a lender that can provide their rates and payback options for the loan amount you need. Always look for lenders that are clear in their requirements and do not require an upfront fee. The internet is full of scam artists and predatory lenders, so make sure you are using a tool you can trust.

Payday Loan

If you just need a loan that will take you to the next payday, then a payday loan may be perfect for you. The payday loan is a much shorter term loan than a personal loan or a credit card—typically due on the next payday.

A loan based on your paycheck will not usually be a large amount and won’t cover major expenses.

Fees for payday loans typically range from $10-$30 per $100 borrowed, which is a lot so pay it off before the next payday and don’t fall into the trap.

A payday loan is usually given with access to your checking account or a post-dated check that covers the amount you are borrowing. These loans are usually options for people who have steady low-income jobs with poor credit scores. If you don’t pay back the money on time, your lender will apply high fees and penalties.

Credit Card

Credit cards are one of the most expensive ways to borrow money, but they are also the most common. Many people have cards that only require a monthly payment of 1%-3% of what was borrowed, but high interest rates are applied to any amount that isn’t paid for the month. The smartest way to use credit card lending is to only purchase what you will have money for by the end of the month.

Restrict spending on the credit card to less than what you will have in the bank by the end of the month and then pay off your statement every month. The credit card companies plan on their users getting into revolving debt. So the high interest rates kick in after you haven’t paid the balance for the month.

If you are able to pay off your card each month and use it more like a debit card, the credit card is the best way to borrow money. You won’t be able to pay off some forms of debt with a credit card, like your house or car, but most bills can be paid through your card.

You should be aware of how to compare credit cards based your credit type and things you want to get out of your card such as loyalty rewards.

Find a Lender for Your Loan

There are many loan options for borrowing with many varying details. This can make searching for a personal loan, credit card or payday loan overwhelming. With a tool like Loanry, you can find a lender and decide what works best for you. You can check out lenders who offer emergency cash loans or loan shop to help you find the funds you need. Save time by seeing a lender in one place and not having to search lender by lender to find the deals right for you.

Can I Get a Personal Loan if My Credit Score is Below 550?

Poor or bad credit can make it hard to qualify for a loan—especially given personal loan rates depend on your credit score. If you have a credit score of less than 550, you are considered a risk to your lender and may struggle to get a loan. When it comes to lending money, a FICO credit score of 580 or less is poor credit.

Over 60% of accounts that have poor credit scores become delinquent accounts, so many lenders won’t even consider applicants with scores under 600.

When you search for a personal loan with a low credit score on Loanry, you will still may find a lender. However, a lender will likely charge higher fees and fewer options when your credit history is low. Ideally, you want to work on raising your credit score before you apply for a personal loan.

Finding a lender on Loanry doesn’t mean you are under any obligation to take the loan. If you don’t like your rates, work on boosting your credit score to at least a fair rating with a score over 580.

Credit score scale

Beware of Predatory Lending

You cannot trust all lenders, especially many online lenders. There are a lot of loan options for borrowing out there for people who have poor credit scores and are looking for personal loans. If you have been searching for a loan to cover personal expenses, you may have noticed some of the scams that are offering advance fee loans.

According to the Federal Trade Commission, you should be wary if a lender demands an upfront fee, pressures you to wire money or doesn’t clearly display what fees apply.

At Loanry, we want people to shop personal loans to find fair offers and get the financing they need at a rate they can afford. Get personal loan online options and complete a short form to find a lender here today!