The 5 Top Personal Loans For Fair Credit

A man and a women hands hold a money bags

So, you are thinking about a personal loan. All you know at this point is you need the money and you need it sooner rather than later. It may help you to know that you are not the first person to find yourself in this position. We all have moments where we need money quickly. Often times, we just have no idea what to do next. You do not know where to get a loan. You do not know if you can afford a loan. And you do not even know if you can qualify for a loan. Believe me, I understand the stress that needing money causes, as well as the anxiety of not knowing if you can qualify for a loan. While you practice taking deep breaths, continue reading to find out more about personal loans for fair credit.

Personal Loans for Fair Credit

Thinking about a personal loan can be scary. I am a firm believer in knowledge being power. The more you know about personal loans, the less scary they become. You also put yourself in a position to make the best decision. You cannot possibly make a good decision when you do not have all of the information. That being said, let’s talk about the basic for a bit.

Personal loans for fair credit are similar to those for good credit. You have an option to choose if you will get a personal loan online or go into a bank. A personal loan is a set amount of money that you borrow from a lender while making a promise to repay it. You are promising to repay the amount you borrowed, which is called the principal, plus interest. Interest is what the lender adds on to the loan as a fee for letting you borrow the money. The amount of interest you pay depends on your credit.

This is where you begin to see differences between fair credit and good credit. More on that in a little bit. Loans can be secured or unsecured, although most personal loans are unsecured. The terms of the loan can differ from lender to lender, but typically you are going to make monthly payments until the loan is paid.

One of the most important things to do when getting a personal loan is finding a good lender. Loanry can help you with that. This entire blog is devoted to reviewing lenders and their offers, and after you’re done reading, you’ll be ready to choose the best lender for your situation. If you want to get offers instantly, fill out the form below and we’ll start working on it:


 

What Is Considered Fair Credit?

You probably know by now that your credit score is the largest driver in you getting loans, mortgages, cars, insurance and sometimes jobs. It is important to understand your credit score and what that means for you to obtain a loan. Before you start researching loan places, you should find out your credit score.

If you have a credit score between 620 and 659, you are considered to have fair credit. Some lenders also use the term average to describe this credit score. You are not alone. A little more than 10 percent of people have fair credit. A typical person with fair credit is in their early 40s and makes about $54,000 a year. Does that sound like you? Are you wondering what that means when you want personal loans for fair credit?

The bottom line of what this means for you is higher interest. You are going to pay higher interest on loans and credit cards than someone with good or great credit. The other side to that is you are going to pay lower interest than someone with bad or no credit. You are looking at an interest rate around 22 percent on a credit card and potentially in the 20 percent range for a personal loan, also. You are not in the worst place, but not in the best, either. Good news, you have room for improvement and it can happen.

Loan #1 For Fair Credit – Avant

Avent LoansNow that you are in the know, it is time to find personal loans for fair credit. The best way to do this is to do some loan shopping. There are many different lenders available. The key is to pick the right one for you. The right one is the one that meets your needs and gives you a loan that you can afford. There are traditional banks and online lenders available to you. There are also short term loan lenders that can provide loans. Each one of them has positives and negatives. As I mentioned earlier, it is about knowing all the information and making the best choice.

One of the best choices for personal loans for fair credit is Avant. They are willing to provide loans to those with credit scores as low as 580. Also, they have no specific income requirements, so if you have low income, it will not stand in your way of getting a loan from Avant. They have additional loan requirements that tend to be more flexible than most. They provide loans with a huge range of amounts from $2,000 up to $35,000. Also, they provide loan terms in two, three, four, or five year increments. They do have an origination fee that can be up to 4.75 percent of the loan amount. They offer APRs that range from 9.95 percent all the way up to 35.99 percent.

Loan #2 For Fair Credit – Lending Club

Lendingclub loansThe next lender on the list of potential personal loans for fair credit is a bit different from your average lender. Lending Club is a peer to peer lending facility. What that means is that they borrow the money from individual people to be able to offer loans. They are a great debt consolidation option because they may offer the option to pay your other creditors directly. This eliminates the need for you to do it. Their loans vary in amount from $1,000 up to $40,000. They have loan terms of three or five years in which you can pay back your loan.

You should be aware that Lending Club has a hefty origination fee. It is anywhere between 1 to 6 percent of your loan amount. Lending Club offers interest rates from 6.95 percent to 35.89 percent. They do require you to have a credit score of at least 600. They do not have any set income requirements, so a low income should not stand in your way. But they do have some other requirements of which you should be aware. They want you to have a credit history of at least three years. They also want your debt to income ratio to be under 40 percent.

Loan #3 For Fair Credit – Upstart

Upstart LoansNext on the list of lenders of personal loans for fair credit is Upstart. This is a great lender for someone who does not have a long credit history but is on track to continue to increase income. They are willing to loan money to those who have a credit score of 580 or higher. They do want their borrowers to have an income of at least $12,000 per year. And they allow you to borrow anywhere from $1,000 to $50,000 with loan terms of three and five years. Pay attention to how much money that takes off the bottom line for you. They do have a heavy origination fee of anywhere from 1 to 6 percent of your loan amount.  They are looking for their borrowers to have a debt to income ratio of less than 45 percent.

Loan #4 For Fair Credit – Freedom Plus

Freedomplus logoWhen looking for personal loans for fair credit, you should make sure that Freedom Plus is on your list of potential lenders. They want you to have a minimum credit score of 640. This lender is also a great choice for debt consolidation because they will pay money directly to your other debtors for you. You do not have to worry about making any of those final payments. Their minimum loan amount is $7,500, but they go as high as $40,000. They want their borrowers to have an annual income of at least $40,000. They are also looking for a debt to income ratio of less than 40 percent. Their average borrower has a debt to income ratio of 20 percent. The term length of their loans is anywhere from 2 to 5 years.

For some loans, they do not charge an origination fee, but it can go up to 5 percent of the loan amount. Their interest rates fall between 5.99 percent to 29.99 percent.

Loan #5 For Fair Credit – Upgrade

Upgrade logoLast, but certainly not least on the list of lenders for personal loans for fair credit is Upgrade. They are willing to loan to lenders that need to build up their credit history. They provide credit health tools and hardship plans. Their interest rates range from 6.98 percent to 35.89 percent. They are a good lender for debt consolidation because they will pay your debtors directly. They want you to have a credit score of at least 600.

You may be able to qualify for a lower rate if you sign up for their automatic payment option. They do not have an income requirement, but their borrowers have average earnings of $30,000 per year. The terms of their loans range from 3 to 5 years. They do want their borrowers to have at least $800 cash flow per month. They are looking for a maximum debt to income ratio of 60 percent. Their origination fee ranges from 1.5 percent to 6 percent. They offer loan amounts anywhere from $1,000 to $50,000. A point of awareness for you is that Upgrade is not available to those living in Iowa, Maryland, Vermont or West Virginia.

How Can I Use A Personal Loan?

When it comes to personal loans for fair credit, you can use them for whatever needs you have. There are some smart ways to use a personal loan. You may be in a position where you need the money for an emergency expense, such as a medical bill or a house repair. In those cases, using the money for those needs is a smart way to make use of a personal loan. There are some other ways to use the money from a personal loan that may help you improve your financial outlook.

Pay off Your Debt with Personal Loan

If you have a large amount of debt at high-interest rates, it may be a good idea for you to use a personal loan to consolidate your debt. You pay off all of the high-interest debts, like credit cards and pay just one monthly amount to one lender until that debt is paid.  This is when you determine how much money you owe all of your debtors and you take out a personal loan for that amount.  You must be cautious when you do this because you still have the same amount of debt, you have just consolidated it into one. You have to be mindful of how you spend money and not get yourself into a position where you have a large amount of debt again.

Use a Personal Loan to Make More Money

You may also want to consider using a personal loan to make more money. Before start making more money, it is very important to be familiar with how personal loans work. If you have a business or some other way to make money, you could take out a loan to invest in that endeavor. For example, you have a business baking cakes but you need another oven and expensive equipment so you can make more than one cake at a time. You take out a personal loan to invest in the equipment and the money you make from a greater production can go towards paying off the personal loan. If you can, make double payments so that you can pay off the loan faster.

Can I Improve My Fair Credit?

The good news about fair credit is you are able to fix it. It is going to take a little bit of time and consistent work, but it is possible. Before you look for personal loans for fair credit, you may want to take some steps to improve your credit score first. One of the first steps you want to take is to pull your credit report and look at it. Do not bury your head in the sand and pretend it is not there. Request it and look at it. Look for any errors that are contained and dispute them. If there is something wrong with your credit report, you must address it immediately. That alone can help your credit score improve.

Steps to Take Before Taking Out a Personal Loan

Begin paying all of your bills on time. Making late or missing payments is the fastest way to lower your credit score. One of the best ways to begin to improve it is by making payments on time. When it comes to credit cards, make sure you make at least the minimum payment each month. You should pay off your credit cards each month, but I realize that may not be possible. When you cannot do that, pay as much as you can, but at least the minimum amount. You should pay off the highest interest debts first to prevent a large amount of interest from continuing to grow.

You should also work to reduce the amount of credit you utilize. Lenders prefer that you stay under 30 percent utilization. That means if the credit that is available to you, you are only using 30 percent of it. To highlight this, I will give you an example with numbers. If you have a credit card with $10,000 available credit, 30 percent of that is $3,000. That means that at any given time, you should not have a balance of more than $3,000.

Conclusion

Hopefully, with all the information I provided on personal loans for fair credit, you are feeling a little better about your options. You have some solid information on which to consider your choices. I have listed some good options for you to consider when thinking about a loan. Two things I did not mention that I think are important to understand: the reason why you are getting a loan and if you can afford it. There are lots of reasons why you might want a personal loan. You should understand your reason and make sure it makes good financial sense.

Sure, we would all love to have a bigger television and upgraded furniture, but do you really need it? Is that the best reason to take out a personal loan? Maybe, for you, it is. Only you can make that decision. Just make sure it is a sound one. My second point was to make sure you can afford it. Remember, a personal loan is not a gift. You must make payments every month until it is paid off. Make sure you can make those payments. Look at your budget and determine what you can afford to pay each month and stay in that range. If you go over it, you may end up regretting it when you do not have the money to pay. Remember, make good choices when it comes to your finances. You will be glad you did.

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Short Term Loans When You Need It Most

A short-term loan provides you with emergency funding. You have experienced a catastrophic one-time event or a temporary hardship? The loan helps you get by until additional funds are available.

Short Term Loans for Emergency Situations

Short term loans are offered by a variety of personal loan lenders with myriad requirements. They are an option when you need fast loans and cannot wait for traditional approval procedures.

Short Term Loans From Traditional Lenders

When you have good credit and need short term loans to overcome a hardship, consider visiting with traditional lenders first. If your bank or credit union can provide you with the funds, you are likely to receive better interest rates. Bank loans also enjoy more manageable repayment schedules than going through short term loan lenders.

Your bank or credit union is already aware of your financial situation. This allows you immediate access to the best loan terms possible given your assets.

In-person Application for Short Term Loans

Stop by your bank or credit union in person to speak to a representative familiar with your account or immediate access to it for research. By connecting with a local person, you also increase the likelihood of the lender reviewing all possible avenues for you to obtain funding.

A local bank often has the same parameters for lending as a national bank but can find alternate ways to match you with the appropriate loan.

Short Term Loans and Credit Scores

For example, some banks or credit unions may not lend to you if your credit score is below a certain number or your debt to income ratio is too high. However, a local bank or any financial institution specifically reviewing your credit information can assess these variables both together and independently.

If your debt to income ratio is a little high but you have an excellent credit score those two can balance each other out. Likewise, a lower credit score with an excellent debt to income ratio would suggest that you are a responsible user of credit. A bank can then determine you are likely to repay the loan in a timely fashion.

When you are speaking to a person directly, you are more likely to encounter a little more flexibility in this area. Local representatives are able to review all of this with you in person without other demands.

For example, when you call a bank’s toll-free number it often leads to a call center. This means you encounter someone who is going through the standard script in terms of loan paperwork. If you don’t check all of the checkboxes, the representative is not necessarily going to research other options available. This makes the in-person approach best.

Benefits of Obtaining Local Short Term Loans

When you are researching short term loan options, visiting with traditional lenders like a bank or credit union is also instrumental because you may find yourself able to secure a better loan.

Short term loans may be what you think is best for you because you only need money for a brief time. However, a long-term loan may provide you with the funds you need while providing financial flexibility in terms of repayment.

For example, you took out a $6,000 loan to pay all of you bills for a couple of months of unemployment or to finance a vacation. This way you may be able to repay the loan quickly. When you can, it is a solid option. However, you will be temporarily reducing your cash flow while you repay the loan in full.

If you took out the $6,000 loan for a 12-month period, even without interest, you are facing a $500 per month repayment schedule. With interest, that total is going up.

While your budget may be able to handle the loss of $500 per month short-term, you will still be paying interest charges. Often, some of the higher interest rates allowed are charged on short term loans.

By investigating a long-term option, you may be able to find a more agreeable repayment schedule.

A $12,000 loan over a 60-month period – the type of loan you would typically get for a small car purchase — would only require repayments of $200 per month plus interest.

If you are concerned about the added cost of interest, review the terms of two different loan types. The higher interest rates of short term loans can quickly add up to the same rates charged over a longer loan period.

High Interest on Short-term Loans

In both, the business and private sector, short term loans can be viewed as inherently risky. A person needs capital quickly and doesn’t have access to liquid assets.

For business loan shopping, there are many lenders for short term needs. However, they often carry heavy qualification requirements. Such as minimum assets required and years in business. Interest rates are high and repayment schedules aggressive.

When the average consumer applies for consumer loans with traditional lenders, the requirements are also strict. You will need an excellent credit score. You might also need to be able to show the ability to repay the loan.

For those in a financial bind that necessitates considering this loan type, the requirements often cannot be met. If unemployment or an alternate emergency leads to you needing short-term financing, it still pays to research the possibilities.

Payday Loan Options for Short Term Loans

A payday loan is one of the more common short term loans. It provides a loan in advance of your paycheck with the premise being that you will pay it off when you are paid next.

Payday Loan Pitfalls

The problem with payday loans for some borrowers is the likelihood of renewing the loan week after week. Each time the loan is renewed additional fees accrues, increasing the balance and making it more difficult to pay off.

When the loan is taken out, an initial processing fee is often required. Interest is then added to this processing fee to arrive at the total you must repay the lender by the due date.

After you receive your next paycheck, the loan is due. If you cannot pay the loan in full, the lender will charge a fee for renewing the loan.

Basically, the entire amount is refinanced as a new loan instrument. This means the interest accrued on the initial loan is added to your principal. New interest charges are also added on top of the processing fee.

When you are in a financial bind, it is easy to renew these loans week after week or paycheck after paycheck. The short-term financial crisis you experienced that led to the loan being necessary often can create hardships for repayment.

It is also possible the full cost of the loan equals the full value of your next paycheck. This often makes it impossible to pay off the total without neglecting other bills.

Over time, the processing fees and interest charges add up. If broken down over the cost of frequently renewed short term loans, they often add up to repayment over twice the original loan amount.

This is How Payday Lenders Make a Return on High-risk Short Term Loans

To avoid falling into this trap, avoid taking a higher loan than you need.

Develop a plan to pay back the money as soon as possible and stick to it. Even if you must refinance the loan, you can pay back a lump sum every paycheck. This lowers the balance and reduces the amount subject to additional interest charges.

When a large lump sum isn’t possible, make it a goal to pay back all accrued interest, the refinancing fee and a portion of the balance. This ensures your total is always going down.

Short Term Loans From Local Lenders

A variety of local finance companies as well as web-based lenders also focus on the short term loan market. These chains specialize in installment loans at a low dollar value.

The loans may include an abbreviated repayment period. For example six months, or lengthier terms in excess of one year. Like payday loans, short term loans offered by these entities make money through high interest.

Short term loans generally target a low-income demographic with limited access to other financing options with more generous terms. This increases the possibility of default for the creditors. Without charging higher interest rates to those who repay and those who are currently repaying but will default, the enterprises would not be self-sustaining.

Qualifying for Short Term Loans From Direct Lenders

Most short term loans, particularly those offered by chain lenders, have well-established terms. Those will require some form of collateral. For many people, this means allowing the company to place a lien on a paid for vehicle, piece of equipment, or parcel of property.

The collateral provides the lender with some tangible property or asset the lending outfit can attach itself it to for collections. If you default on a personal loan, the collections process would include seizing the item and forcing a sell to cover the terms of the loans.

The qualification will not require the high credit scores other lenders require or a specific debt to income ratio. The repayment of your other debts will be considered heavily. The loan company uses this to determine your likelihood of repaying the debt in a timely fashion.

Paying off Short Term Loans

In addition to collateral, many providers of short term loans will want to connect to your bank account to withdraw monthly or weekly payments. In this scenario, it is possible you will face garnishment of your bank account when you fail to pay.

Whether or not the lender is connected to your bank account, when your account goes into arrears, they can tap it. As part of the collections process, a loan provider can go through the court system to access your bank account or paycheck. The bank account or your checks are then garnished until the terms of the loan of fulfilled.

Benefits of a Short Term Loan

When you possess the ability to quickly repay a short term loan, the instrument is capable of helping you out of a financial bind quickly.

Most payday lenders and small loan providers are skilled in making quick eligibility decisions. Many also provide funds immediately in the form of a bank direct deposit or via check.

For an emergency trip home, imperative dental work or a necessary medical procedure, this option will provide you with the money you need quickly. When time is of the essence, a short term loan for an emergency can get you on track as soon as possible.

As long as you possess the ability to repay the loan quickly, the additional fees will be easily absorbed by your budget. While the cost may be higher than other loan types, convenience may be more important.

Should You Use A Personal Loan for An Emergency?

How to Find the Best Deal on a Short Term Loan

Do you want to find the best deal on a short term loan when you have the time to research? Firstly, review your credit score and your existing liabilities and income. A credit shop or site with free access to your credit report can help.

When you have a credit score of 640 or above, you are likely to qualify for a range of short term options. Then choose and pick the best one. An even higher score will open the possibility of a long term loan you can spend more time repaying while your cash flow improves.

For scores less than 640, the options start to narrow. However, an established credit history and solid income can help you negotiate with a local lender.

At 600 and under, you are largely looking at short term loan specialists and payday lenders.

Understand what your loan will cost along with all additional fees so you can be realistic about paying it back. Let Loanry try to help you. Enter your information and see if you qualify for any loan offered:


Researching Short Term Loan Options

To find the best option for you based on your current financial situation, consider using an online loan aggregator. These sites will take your basic financial information and present a variety of loans, including cash loans online, you could be eligible for.

Many sites will not require a hard pull of your credit report to provide a glimpse of the options. Instead, the individual lender you select will pull your report when you fill out a final application.

Look at the possible interest rates for each loan, the repayment schedule, and what your monthly or weekly payment will be. Pick a loan that provides a low cost of borrowing while keeping payments you can manage until your financial situation improves.

Credit Card Options

If your credit is okay, you may also consider utilizing a credit card as an alternative to a short term loan. While most credit cards maintain high-interest rates, the rates are usually competitive with those charged by short term lenders. They are also better than the higher rates and fees charged by payday lenders and cash loans based on your car’s value.

New credit cards often feature fixed or low-interest rate offers on introductory charges. They also routinely issue checks with promotional financing featuring similar terms.

Utilizing such an option provides you with the repayment flexibility of a long term loan. You can make lower monthly payments while you need to focus on your finances. After you move past your emergency, you can focus on paying the credit card off in full.

A benefit of this is the ability to improve your credit score. And gain access to a larger credit limit capable of helping you out in a future emergency.

Unlike qualifying for a short-term loan, you can keep a credit card you maintain a solid repayment history with for years and use it repeatedly. If you needed another short-term loan in the future, it would be necessary to reapply and meet all of the original terms.

Moving Forward From a Short Term Loan

By actively focusing on paying off a short term loan, you will suffer no financial repercussions for pursuing this option. In fact, a lender who reports your payment history to the credit bureaus can end up boosting your score for the long term.

This means you will qualify for more, better loans in the future. Instead of taking out a short-term loan to fix a clunker car or buy a used vehicle, you may find yourself qualifying for a full auto loan or leasing arrangement.

The key is to use any offer of credit you accept or any loan you take out to build a history of responsible usage. Avoid late payments and added fees, and you will benefit if you use a personal loan wisely.

After you pay off the loan entirely, work on other ways to build up your credit, such as responsible credit card usage, to expand your loan options for the future. Establish a savings account when possible to build a cash fund you can tap when the unexpected happens, and develop a cash flow that will allow you to help others in the future.

Pros and Cons for Personal Loans with Bad Credit

Pros and Cons for Personal Loans with Bad Credit

Those needing money and needing it fast often grab at any opportunity bad credit lenders throw at them. These people operate from their need instead of from a logical, informed place. They need to know the pros and cons of bad credit personal installment loans before they type in the first letter on an online application or pick up the phone. What are these personal loan pros and cons?

You’ll want to keep reading before you act…

Advantages and Disadvantages of Personal Loans with Bad Credit

Before you take out a loan, you need to know how it’s going to affect your financial situation. This is exactly what we’re going to do in this article – list all the pros and cons of taking out a personal loan if you’re a bad credit borrower.

Personal Loans with Bad Credit – PROS 

They’re Personal

If you were to take out a car loan but didn’t buy a car, you could be facing fraud charges. The same situation would be much more serious if you borrowed money to buy a house but didn’t. Since you don’t want charges of fraud and misuse of funds, a car or a house should be bought. It’s not the same with taking out a personal loan with bad credit. There are as many reasons under the sun to use a personal loans with bad credit as there are bad credit loan lenders ready to provide you their offer.

Loan Consolidation

Lots of people use cash loans with bad credit to consolidate credit card, student loans, and installment loan debt. The result is one low payment with lower interest rates than the loans themselves. Bankrate tells us that the last month for which there were records was February 2019. The Federal Reserve stated that the median rate on 24 month personal loans with bad credit was ten percent as opposed to the general credit card rate of 15.

No Collateral To Risk

While the house is security for a mortgage loan and the car for an auto loan, the personal loans with bad credit is only secured by the knowledge that you have a good job, even if your credit could use some help. Bad credit short term loan lenders are taking a chance you’ll repay the loan. Time on the job and few debts are good signs you’ll repay the loan. You won’t be risking your car, house, collections, or anything else.

Time To Repay The Loan

If you’re strapped for cash, having a difficult time paying bills, or suddenly need an influx of cash to pay for something unexpected, then repaying any loan could be difficult. With bad credit personal loans, you have between one or two years and five years to repay the loan. One low monthly payment is fixed for this period of time.

Credit Profile Will Improve

Credit bureaus like to see people with varying credit accounts. Repaying loans on time and in full means you’re a good credit risk. Personal loans with bad credit show the credit bureaus that you’re working on improving your credit. Okay, so you won’t be able to borrow as much as if you had had good credit, but each loan you pay off on time will inch your credit score up a bit.

That’s a good thing. As your credit improves, you’ll be able to borrow more and at better interest rates. Keep paying them off on time, and you’ll soon have A-list credit (a score of over 750.)

Establish An Emergency Fund

My parents always told me to put away ten dollars out of each paycheck for an emergency. I’ve always lived paycheck to paycheck like most Americans, so I was never able to save anything. That’s the story of nine out of ten people, unfortunately. However, personal loans with bad credit can help you establish an emergency fund with which to meet anything life can and does throw at you.

They’re Quick

In most cases, bad credit short term loan lenders can give give you a loan within hours. Sometimes it takes until the next day after application to receive the funds. This is a giant step above bank loans which can take days up to a couple weeks.

Not As Many Documents

Most loans require your banking records, proof of all your debts, paycheck stubs, the deed to your house, and your first born. Okay, I’m kidding, but with a bank or other personal loans with bad credit lenders, you have to provide a mighty lot of information.. You’ll only need a picture ID, paycheck stubs (at least four, six to eight is better,) and your bank account number. That’s it. Short and sweet, and you’ll have your money within hours.

There’s Perks

Lenders offering cash loans bad credit have some stiff competition. They’ll offer you all kinds of perks in order to get your business such as unemployment protection. This would pay off your loan if you lost your job. Some lenders even offer counseling to help you get another job.

Tax Benefits

If you use personal loans with bad credit to upgrade your home or help towards buying a new one, you can get credit or a deduction for the interest on the loan come tax season. Be aware that you’ll need tons of documentation that you actually spent the money for this purpose. After all, it’s the IRS with which you’ll be dealing.

Available Anytime

When an emergency occurs, it usually happens in the middle of the night, on the weekends, on vacations, on holidays, or when you aren’t home. Personal loans with bad credit can be applied for online anytime of the day or night anywhere in the world you happen to be at the time. All you need do is fill out the application, upload your documents, and wait for acceptance. Loanry can help you find the best lender for your situation, with the help of our partner Fiona. To get a personalized offer (or more of them), start here:


Hidden Charges

We’ve all done it. We’ve gotten into something in which we were told that the price would be this, but six months down the road (when you’ve forgotten all about it) suddenly you’re paying extra. Those hidden charges are how most companies make some of their money, and they always hike up the interest rate. This is of benefit to the company, not to you.

Bad credit personal installment loans may not have hidden charges. You’re told the interest rate and payment amount up front. They’re both fixed. You won’t pay another penny. That’s of benefit to you, and one you won’t find elsewhere.

No Penalties

With any other lender or creditor, you may pay a penalty for paying off your loan early. Additionally, variable rates and payments loans means you never know what you’ll be repaying from month to month. Bad credit lenders don’t always operate that way. Personal loans with bad credit lenders give you fixed rates and payments. Paying it off early with no penalties attached to you is another perk, and a great one, at that.

Personal Loans with Bad Credit – Cons

There are some great advantages to taking out loans with bad credit. However, everything in creation has two sides. If it has an advantage, then it also has a disadvantage. Those considering checking with these types of lenders for one of their bad credit personal installment loans should consult the other side of the coin. They might or might not be able to handle the downsides of personal loans.

Debt Consolidation

If you’re using a personal loans with bad credit to pay off credit card debt, you could be getting in over your head. By that, we mean that you’re only morphing from one payment type to another. You’re trading monthly credit card payments with ever-changing interest rates to one payment with a fixed interest rate. That leaves your credit cards free and clear to be used again. Consider freezing your credit cards (literally, it doesn’t hurt them) until the cash loans bad credit are paid off.

Higher Interest Rates

Bad credit, however, gets you higher interest rates. Loan Shop around for the best rates on personal loans with bad credit.

Smaller Loan Amount

As your credit score improves, you’ll be able to borrow more money at better interest rates. For now, though, bad credit lenders can’t give you the same loan as you would have gotten had your credit been better.

Defaulting On The Loan

If you default on a car loan or a mortgage loan, they come and take away your car or your house. In the case of bad credit loans, if you default on the loan, the bad credit short term loan lenders take you to court. A lien will be placed on any assets you possess, it goes on your credit report, and you will be liable for the court costs and attorney fees as well.

Origination Fees

Not all lenders do this, but some bad credit lenders charge origination fees. This is a one to six percent fee to cover the costs of processing the loan. It’s paid up front instead of paying it back with the monthly payments. If your credit isn’t good, expect to pay a higher fee than if your credit had been good. Shop around for lenders who don’t charge this fee.

No Partial Payments

Some lenders allow you to pay money down on the principle, since most payments go toward repaying interest on the loan. Bad credit lenders aren’t of a mind to accept partial payments. You have to pay back the stipulated amount on the stipulated date for however long the loan is financed.

Monthly Payments

If you’re used to paying small amounts on credit cards each month, then a hefty monthly payment schedule might be too much for your finances to manage. Repayment of personal loans with bad credit can run into the hundreds, depending for how much the bad credit loan amount was. If your budget can’t handle that, reconsider bad credit loans.

Qualifying

Banks and credit unions are different from other personal loans offices. One thing they both need, though, is qualifying for the loan. Personal loans with bad credit might require more information and documentation. In addition to a picture ID, paycheck stubs, and bank information, be prepared to upload or bring with you whatever information the loan office needs such as information on assets.

Debt To Income Ratio

Taking out personal loans with bad credit increases your income to debt ratio. With bad credit to start with, this can go two ways. Paying it back on time and in full will improve your credit score. However, if your credit score isn’t what it should be due to too much debt, you might not get the loan in the first place. If you do get the loan, pay it off in order to decrease your income to debt ratio.

Credit Hits

Each time you apply for a loan or for credit at a store, the loan officer or store manager checks your credit reports. Each hit on your credit report lowers your credit score. This will make it difficult for personal loans with bad credit lenders to give you a loan.

Begins A Bad Habit

Bad credit personal loans are meant to get you out of a bind, purchase something necessary, deal with medical problems, you get the picture. The problem is that it’s not too difficult to get one. When it’s paid off, it’s too simple to get another, whether you truly need it or not. Just like using your credit cards right after you get a bad credit personal loan to pay them all off, beware getting another personal loan just because you can.

Bank Account

Monthly fees, per check fees, and other sometimes hidden fees keep many people from using bank accounts. Why bother with plastic when it’s so easily boosted from your wallet or your pocket? Why bother with long lines, tired tellers, and traffic getting to the branch office? It costs less than a dollar to get a post office money order with which to pay bills and 45 cents for a stamp. Cash is king, dude.

The trouble is that personal loan offices need a bank account into which to put your personal loan money. When you deal with finance, you deal with transfers, ones and zeroes. Not having a bank account means to a loan officer that there’s nowhere to transfer those ones and zeroes. This messes up finance people’s heads, and you won’t get the loan.

Pitches

Bad credit personal loan seekers often get pitched at the closing of the loan. For instance, the loan officer might try to get you to buy life insurance. He’ll tell you that for the price of a cup of coffee every day, you could protect your family from loss if you die. Life insurance is an important thing, and you don’t want some random loan officer selling you a policy. It almost always doesn’t cover much in the event of your death, added to the fact that it’s almost always more expensive than it’s worth. Skip the pitches.

Risk Of Scams

The more our lives are led online, the more scammers and hackers have chances to steal our information. Identity theft and loan fraud are two of the most prevalent types of online scams. These scammers will do and say anything to get your personal and banking information. If you’re looking for bad credit personal loans online, there are a few things you can look for in order to protect yourself:

No Credit Check

The only way a personal loan officer can judge whether or not you’ll repay the loan is by examining your credit and work history. Legitimate online loan companies will do two credit checks: a “soft” credit check to see in what state your credit is. The second will come following your agreement to rates and terms. This credit check is more detailed, and tells the loan officer just what rates to charge. Avoid anyone who advertises loans with no credit check.

Up Front Fees

The only fee a legitimate loan officer will ask of you is the origination fee. It’s paid the instant you get your money, and no more will be asked of you. Scam loan “officers” will ask you to give them your debit card as a sort of security for the loan. They’ll tell you they won’t touch the card, but have it on record. In reality, the instant your back is turned, they clean off the card and disappear. Avoid anyone asking for up front fees.

Sure Signs Of A Scam

  • If it has to do with money, it has to be registered with a state. Call your state’s Attorney General to see if the online lender you’re considering is registered.
  • If an email appears out of nowhere with an address saying it’s from, let’s say Amazon, make sure “amazon.com” appears at the end of the email address. If not, it’s a scam.
  • Legitimate lenders have a legitimate address, either a brick and mortar address or an online address. Online lenders have company or corporate offices located somewhere. The address will show up on Google maps.
  • Check the spelling and grammar. If you’re not well versed in correct usage and grammar, then use a free checker like Grammarly. Lots of scam artists are located outside the U. S. English isn’t their first language. When you see misspelled words, improper English usage, and other grammar mistakes, nine times out of ten it’s a scam.

Interest paid based on credit

Let’s review some real examples of why you might take our a Personal Loan even with Bad Credit

These are just a few scenarios involving people with a serious need for money, but no idea where to go for it. They have bad or no credit which means most lenders won’t give them personal loans with bad credit. www.creditry.com Many people in these and even worse situations turn to payday loans, credit card advances, or cash loans bad credit.

Abby’s house was too small. Abby, her husband, and her two toddlers bumped into each other no matter where they were in the house. She had a choice: she could add on to the house, or she could buy a new one. She had only been on her job for a year, though. Her husband was self-employed. They made enough money to get by, but not enough to qualify for a mortgage.

Brian had been hospitalized for an abdominal problem. He lived in great pain. The doctors told him an operation would get rid of the problem. The snag to that was that he’d be out of work for six months. There would be no telling if his job would still be there when he returned to work. His wife could pay the bills, but the job thing was a serious setback.

Let’s take a Few more to Drive the point home

Janet was going through a hostile, messy divorce. She got the house in the settlement, but she could seriously use another bedroom. The kitchen was so small she met herself coming in the door. Janet needed to renovate the house, but from where would the money come?

Will was so nice that he couldn’t turn anyone away when they asked to borrow money. Sometimes he was into negative numbers when someone asked. His wife needed expensive special medicine to right a medical wrong. He’d no idea where he’d get the money, and she needed it right now.

Karen’s car had died on July 4th, the transmission sitting on the road, so to speak. She could walk to work or catch the bus if it rained. Though she had a temporary solution to the problem, she needed money for a new car. It’s kind of difficult to carry groceries on the bus. Where would she get a down payment for a car?

Many people come across difficult financial situations

Jeff’s son had recently buried his wife. He traveled for his job and had nowhere to leave his little girl. Jeff therefore took care of his granddaughter, but the kid cost a lot of money. The shoes alone were breaking Jeff. He needed extra money, before the girl grew out of the shoes she was wearing that week. His retirement fund wasn’t enough to feed and clothe a growing little girl.

Anne’s house had burned a few years ago. Since then, she’d been living with anyone who would rent her a room or their basement. She’d love to get a place of her own, but she couldn’t work due to a disability. She made what she could online, but it wasn’t enough to pay for an apartment. Anne could use some extra money for a place of her own.

Neal was slowly losing his teeth due to diabetes and its resulting bone loss. He needed either dentures or dental implants, but both cost more money than his insurance at work would pay. Neal needed extra money for new teeth, but hadn’t an idea how to get it.

Conclusion

There are definitely advantages to getting a bad credit personal loan. Renovating your house, paying for specialty medicine, taking care of a growing granddaughter for your son, or laying out a down payment on a car are important things. However, the disadvantages are serious enough to give most anyone seeking a loan pause. We’re not trying to turn you off by any means, but a smart person looks at both sides of the coin.

You should also know that while you’re scrolling for personal loans, you’ll run across companies who locate personal loan companies for you. These companies are not lenders, rather they save you time and trouble. They talk to you, learning your needs, your repayment capabilities, and your time frame. Then they pair you up with the loan company that best suits your needs. This is an attractive thing to someone who’s never applied for a bad credit personal loan before. Now that you have all the facts, we’d love to hear what you accomplished with your loan.

Personal Installment Loans for Good Credit: Better Terms!

Personal Installment Loans for Good Credit

At some point in your life, you’ll need more money than you actually have. If you can wait for the reason you need the money, save up for it. If you cannot wait, look for personal installment loans for good credit. Do not take out a loan just to keep living at a certain level. Only take out a loan to meet a genuine emergency need like paying for medical bills for an emergency or for a major purchase like a home. When it comes to personal loans, use it smartly. One example is to consolidate higher-interest debt into a personal installment loan for good credit. Often that means better terms!

When looking for a lender, you need to be very careful and do your research. Make sure you are choosing the best option for you. You can always look for help here, on Loanry! We partnered up with Fiona to bring you reputable lender choices you may qualify for depending on the information you put in below. Start here:


How to Get a Personal Loan with Good Credit

Depending on what you want to use it for, you have multiple choices of where to go for your loan. Start at the Small Business Administration (SBA) for a loan for your small business. Their loan guaranty programs ensure most of the US small business installment loans. They favor offering longer repayment plans so you can spread out the payments as your business grows.

If you do not need a large loan like the SBA would make, try banks and credit unions. Banks and credit unions have conservative lending policies. This can turn into a frustrating route. Walt Disney approached 400 banks before one was willing to finance the cartoon “Mickey Mouse.”

For car, boat or home loans or funds for renovation, try banks and credit unions. They make these types of personal installment loans every day. They are your best bet for a loan. You’ll probably need to put up collateral for a home loan or renovation loan, but this will result in personal installment loans for good credit with very low-interest rates.

The Seemingly Never-ending Search

Normally, the process of getting personal installment loans for good credit takes a while. It starts with your research.

  1. Check interest rates. Wait until the rates drop.
  2. Contact all three of the main credit reporting agencies. Maintain your good credit rating. If it is not already good, raise it through credit repair before applying.
  3. Call each bank or credit union or visit their website to research both secured and unsecured loan options.

Meet with each viable lender, if possible. This means to start your search for personal installment loans for good credit locally. Offer a large down payment of at least 20 percent if trying to obtain a home loan. Once you have the loan, work closely with the lender to communicate progress on the loan’s goal.

Short Cut to Your Search

If that entire process sounds long and arduous, you can use a few shortcuts. Here’s the 21st century way to find a lender.

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

Personal Installment Loan Defined

Typically, for smaller unsecured loans banks try to get the applicant to take out a credit card. This won’t work for larger ticket items like cars, boats or homes. That’s where personal installment loans for good credit come in handy.

A personal installment loan or personal loan refers to a loan extended by a financial institution to an individual that gets paid back in small, monthly payments over a specified period of time. The payments usually combine principal and interest. The loan repayment term may span only a few months, or it stretches out over 30 years.

Unlike a credit card which is a revolving credit loan, a personal installment loan is a one-time loan. The interest rate at which the bank extends the loan consists of the bank’s standard rate combined with the factors of your personal credit history and available collateral. You can also obtain an unsecured personal installment loan for good credit, but these are tougher to get.

You will normally obtain a better interest rate with a secured loan. While mortgages and car loans are generally secured installment loans, smaller loans like that for a home renovation or a micro business loan are usually unsecured.

Co-Signer Personal Loans

Sometimes, you cannot qualify for a personal loan by yourself. This may be because of your age. A high school or college-aged individual will not have the credit rating to obtain a loan. You would need a co-signer with a good credit rating to obtain personal installment loans for good credit whether for a car loan or a student loan.

The Meaning of Defaulting on a Loan

The term default refers to your inability to repay the loan. If you stop making payments or fall behind in them, you default. If you put up collateral for a secured loan, you lose the collateral in the default. A default does not erase the debt even if the collateral was involved. The borrower remains liable for any amount of money the collateral did not cover. The lender can sell the item to recoup the money.

Financial institutions provide many opportunities for you to avoid default. They will try to work with each individual, sometimes restructuring the payment schedule. It is to their advantage to work with the loan recipient. The lender does not want to go through the copious amounts of paperwork needed to repossess a vehicle or foreclose on a home. These practices require court filings, incur legal fees, and may require court appearances. They default a loan as a last resort to recoup as much of the loan monies as necessary.

How to Avoid Default

You can avoid defaulting on a loan. It requires pre-planning.

  1. Do not take out a loan for more money than you can actually afford to repay.
  2. Keep at least six months’ worth of payments in a savings account. Has this saved before you take out the loan?
  3. Make sure you have reliable employment throughout the life of the loan at a pay rate that allows you to meet all of your bills and repay the loan.

Having six payments in a savings account ensures that if you do lose your job or your hours get reduced, you have a half a year cushion to repay the loan. This provides you a breathing room to find a new job.

Protecting Both Sides

While it may seem that the default process protects the banks and credit unions, consumer protections exist, too. These extend from consumer credit fraud protections to OLA guidelines for advertising. These protections coupled with the insurance provided by the FDIC protects consumers from unscrupulous lenders.

Loanry.com makes it really easy to find a lender who offers personal installment loans for good credit. Think of Loanry as a loan mall. Just like going to the mall to shop for jeans, you can go to Loanry to shop for a loan. It provides a safer route for you to find a loan. First, we only allow established, honest financial lenders in our mall. Second, we offer a single application for you to submit to initially hone down the list of personal installment loan lenders. Third, we provide you an extended knowledge base so you can make the best-informed decision when taking out a loan.

Loanry does not extend personal installment loans for good credit. Loanry simply indexes available honest lenders of many types. Some offer credit cards, some offer personal loans, some offer medical loans and there’s much more. If you find both purveyors of secured and unsecured loans.

Loanry is what the finance industry refers to as an online loan finder. The finder conducts the lender search for you and NEVER for a fee. This saves you time and you benefit from the finders’ existing knowledge of and relationship with the lender or through it’s third party participating partners.

Our initial form and all of our website’s practices follow OLA guidelines. We merely help you find a vetted potential lender whose minimum requirements you fulfill. If the lender decides they want to work with you may need to complete more than contact information by completing their full form.

Tips for Getting Personal Installment Loans for Good Credit

Even with great credit, you want to obtain a loan with amazing terms. You can help yourself qualify for the best interest rate and other loan terms possible by following these tips.

  • Ask the financial institution for an interview with the loan officer. This provides you with an opportunity to prove your creditworthiness.
  • Submit your last five years of tax returns as proof of your income.
  • Give them a detailed job history to show your continued gainful employment.
  • Provide a list and documentation of your most valuable assets.
  • Provide a list of your unsecured debts. This could be a copy of your credit report or it could be a list you made.
  • Bring copies of your bank statements for all accounts.
  • Provide information and amounts of any alimony or child support you receive.
  • Provide information and amounts of any other monthly payments or dividends you earn or receive.

When You Need the Money Fast

Some loans you can obtain really quickly. These are normally developed for those with bad credit though. Despite your good credit, you’ll be stuck with the interest rate at which these are offered. The benefit to them is that financial lenders use online applications and provide a response in mere hours. Some short term loan lenders will transfer money into your bank account the following day or later that week. If you need the money immediately, this provides it, but you’ll pay a higher interest rate, incur higher fees, and have limited flexibility on the re-payment terms.

Effects of Personal Installment Loans on Your Credit

Obtaining a personal installment loan online can help or hurt you. It depends on the circumstance.

How It Helps

If you do not have an existing credit history, you can build one by taking out an installment loan. This lets you build a positive credit history so long as you make timely payments.

You can use it to diversify your debt. Paying off these loans quickly with timely payments. This can help boost your credit score.

While dipping into savings carries zero interest, a personal loan saves you money over using a credit card. This lets you pay down the amount due more quickly.

If you make all the payments in a timely manner, you improve your payment history. Since you’ll have a payment schedule, this lets you show off your ability to plan ahead and budget.

How It Hurts

Let’s say you do miss some payments, or you are late. It goes on your record. Your credit history reflects it.

Any time you apply for any type of credit, it creates a credit inquiry on your account. Regardless of approval status, the inquiry lowers your credit score.

You will increase your debt level, even if it is your only loan. The exception to this is taking out a debt consolidation loan. This replaces your many loans and credit cards with a single loan. That still can hurt you if you close the revolving accounts once they’re paid off and if you had a number of loans.

One of the things credit reporting agencies use to calculate your credit score is the ratio of your total available credit to your debt. If you have five credit cards, for example, with a maximum available credit of $5,000 that are maxed out, but you take out a consolidation loan for $5,000 and pay them all off, then close them, you hurt your credit. That is because you went from having a potential debt of $5,000 between five entities to a debt of $10,000 very briefly between six sources to owing $5,000 to one source. By closing your credit cards, you erased your available credit and tanked your ratio.

So What Is a Good Credit Score?

What is a Good Credit Score? Your Credit 411.

Those with average or low credit scores may not understand quite how high a credit score needs to be to qualify as “good.” A good score equals 800 or better. Some lenders will still provide a low-interest rate to individuals with a score of 740 or better.

With a little extra work, like the bank interview and additional documentation, you can earn just as good of an interest rate with a score between 670 to 739. That area becomes the tipping point at which lenders look at supporting documentation to determine your creditworthiness.

You can still obtain a loan with a score of 669 or less but you will get a subprime interest rate. That means a high interest rate.

The lower your score dips, the harder it will be to even obtain a loan. You will end up likely resorting to payday loans or very short-term personal loans with exceeding high-interest rates. Legally, in the US, the interest rate could climb as high as 25 percent for prime applicants and much more for low credit sub-prime applicants. Would you rather take your time and save up the money or borrow it and pay it all back plus one-quarter of it on top of that?

On the other hand, if you do have a terrific credit score, this becomes your bargaining chip. You can negotiate for the best terms. You will have your pick of lenders.

Common Reasons to Borrow Money

A multitude of reasons exists to borrow money. Some of the most common reasons to obtain a personal installment loan for good credit include:

Each of these common major purchases requires a significant monetary investment. Most people do not have hundreds of thousands of dollars saved to purchase a home and a car or to launch a business. They turn to banks or financial institutions to borrow the money via personal installment loans for good credit.

Home Loans

Few people have the money saved up to buy a house outright. They make a down payment of about ten percent of the total cost and take out a loan to make the remainder of the purchase payment. They then repay the cost of the loan, also called the mortgage, to the bank who holds the loan.

Car Loans

Another commonplace type of loan is car loans. These smaller loans for $10,000 to $20,000 allow a person to purchase a vehicle and pay the bank the monthly payments. It takes the risk off of the car lot owner by moving the financing to the bank. This provides the most common reason to obtain a personal installment loan for good credit.

Boat Loans

Boat loans require a similar outlay of money as car loans, sometimes more depending on the size of the boat. The boat broker may partner with a financing company or you might go to your own bank for the loan.

Small Business Loans

Many businesses require equipment, supplies, and office space to start. The loans usually cover marketing collateral, too, such as business cards, letterheads, signage and advertising. There’s also hiring a consultant to draft a business plan and marketing plan. You really need the business plan to get a large loan though, so it’s common to either write the initial plan yourself or put the consultant fee on your credit card. The business plan includes sections on your expertise in the business field, competitive challenges, financial forecasts, and operating results and a line item budget of how you’ll use your loan.

Remodeling and Renovating Loans

These loans provide funding for you to renovate or remodel your house. This could refer to redoing the interior or to adding a room or wing to the home. These normally require collateral.

Debt Consolidation

These loans allow you to consolidate all of your debts under one loan. The lender provides you the money to pay all the other extensions of credit and you do so leaving only one loan. You can pay any type of debt using these loans – credit card, medical debts, other personal loans, student loans, etc. The result is you only have one loan and one payment to make each month. This is another very popular reason to turn to personal installment loans for good credit.

Student Loans

You might not have thought of student loans as personal installment loans, but they are. While in school, whether a vocational school or college, you receive a loan. The repayment is normally deferred until you leave school. You will have a short grace period then begin repayment.

These loans can feature a fixed interest rate or a variable interest rate. Interest accrues after the grace period ends. This can increase monthly payments.

Wedding Financing

Yes, you can obtain a loan to pay for your wedding. It is advisable to save as much money for this big event as possible and only take out a loan for what you really need. You need a really good credit history to qualify for this type of loan. You can find some event halls and event spaces that finance rental.

Vacation Funding

Although it is better to save the money up for vacation sometimes things happen, and you have to use your savings for an emergency. Then you need the vacation even more so. When that happens, you can obtain a loan to get going. These can be secured or unsecured loans. As a secured loan, you use your home’s equity to obtain an affordable interest rate. Unsecured vacation loans carry high-interest rates though. This does normally cost less than using your credit card.

Medical Loans

You can obtain a personal installment loan for good credit for a medical emergency. You will end up paying the medical costs plus the loan interest, but it will let you spread out repayment. It does ensure that you will have money for treatment.

About Loanry

Loanry connects people in need of capital with an array of available lenders. Whether you need an auto loan, personal loan, student loan, or another form of loans, we’ll help you find a trusted lender who may offer the kind of loan you’re looking for. We also provide free tips and money tools, so you can learn about the pros and cons of using a quick cash loan, traditional-term business loans, or find out if it’s a good idea to pursue an emergency car repair loan or refinance those student loans. Loanry provides financial access and education so you can make the right choice for you.

Visit Loanry today to find a lender who may provide the best fit for you. Our service may help you find a lender that offers the loans you need at an interest rate you can afford. We do not lend you the money. We introduce you to financial institutions that can. Get a personal loan online by using Loanry finder service. Enjoy personal loan shopping from home 24/7.

7 Smart Ways to Use a Personal Loan

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

Seven Ways to Use a Loan

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

1. Consolidate debt to a lower interest payment

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

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

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

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

2. Boost your credit score

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

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

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

3. Emergency medical expenses

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

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

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

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

4. Home improvement or maintaining your house

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

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

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

5. Repair a car that you use for work

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

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

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

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

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

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

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

7. Emergency Situations With Your Home

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

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

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

Key Points to Remember

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

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

Now that you are familiar with all the ways you can use a loan, you have to be smart about where you are looking for one. Borrowers should identify reliable lenders to work with. We make it easy for consumers to find the right lenders for their needs and avoid falling victim to scams. Check out these lenders, selected by our partner Fiona, put in your information and see which lenders may offer a loan for you:


 

What Credit Score You Need for a Personal Loan?

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

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

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

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

When You Should NOT Use a Personal Loan

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

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

When you are struggling to keep up with debts

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

You want to refinance a small amount of debt

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

If you can easily save the money

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

Covering expected major expenses

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

Unstable employment and income

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

Final Thoughts

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

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

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

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

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

Pre-Approved vs. Pre-Qualified

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

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

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

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

Personal Loan Basics

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

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

Pre-Qualifying for a Loan

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

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

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

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

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

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

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

Look Into All Options

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

It’s important that you go to the right lender when taking out a personal loan. Our advice is to consider the following lenders brought to you by Fiona, our trusted partner. By putting in your information, you will be able to see the lenders you may qualify for, and you may even get offers from them:


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

Pre-Qualifying Loan Process

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

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

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

The Best Ways to Qualify for a Personal Loan

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

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

Credit Scores for a Personal Loan

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

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

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

Improving Your Chances of Getting a Personal Loan Approved

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

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

Increase Your Odds of Getting Your Personal Loan Approved

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

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

Strengthen Your Chances of Getting Approved

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

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

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

Personal Loan Reviews and Credit Ratings

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

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

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

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

Understanding the Loan Process

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

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

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

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

Rates, Fees and Terms

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

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

Success with a Pre-Approved Loan

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

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

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

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

Common Personal Loan Traps: Fees, Rates, Oh My!

Personal loans are loans that can be borrowed from a credit union, bank, or online lender and are paid back in fixed installments or monthly payments. The typical pay back period is two to five years. Interest rates can vary on personal loans and can range from 6% to 36% for prime lenders. Many personal loans aren’t secured, which means you don’t have to have collateral. A secured loan that is backed by a house or car will likely have lower interest rates, but that means you could lose your asset if you default. Regardless of the loan type or rates, you should be aware of common personal loan traps.

You can use the money from personal loans for any number of reasons. Rates on personal loans are typically cheaper than credit cards so they are often used to pay down large credit card debt and consolidate the debt into one payment. Lenders will base the decision on granting a personal loan on a number of different factors, including your credit report, credit score, and the debt-to-income ratio.

The better credit you have, the lower the interest rate. With a bad credit score, you may not qualify for an unsecured loan and may need a secured loan or co-signer. In order to avoid some of the common personal loan traps, you should get some rates from multiple lenders before choosing. It’s important to be aware of common personal loan traps when getting a personal loan so you can make the best decision for your financial needs.

Common Personal Loan Traps

There are a number of common personal loan traps you should be aware of when searching for personal loans so you don’t fall into a bad situation.

1. Excessive Personal Loan Fees

One of the top traps is excessive personal loan fees. There are five basic types of fees when you get a personal loan. The application fee is charged by some lenders in order to cover the cost of running a credit report. The fees aren’t usually very expensive but can add up, especially if you are putting in multiple applications. You don’t get this money back if you don’t get approved for the loan. In order to avoid this fee, you can search for a lender that doesn’t charge an application fee or be pretty sure you will qualify in order to not waste the money.

If you are wasting too much money on application fees, then you may need to add more to your loan amount than you initially needed in order to replace the application fee. The administrative fee will cover the cost of processing the loan paperwork. It can be part of an administration fee or it could be a separate fee. Not every lender will charge an administrative fee, so you can save on this if you find a lender that doesn’t. Some lenders will charge a loan origination fee. This is a fee upfront for taking out the loan that will cover the cost of the application and paying out the funds.

It won’t come out of pocket but will be a part of the loan. These fees can actually be pretty high. For example, if the lender charges a 10% origination fee and you get a loan for $2,000, then you will only get $1,800. Origination fees will vary, so when you are researching on how to avoid common personal loan traps, try to find one that charges a much lower fee. Just like every other bill, if you are late on repaying back your loan you will owe a late fee. This amount will vary and it could be a set amount or a percentage.

The details of your late fee will be in your paperwork. To avoid this, be sure to pay your loan back on time. The last type of fee is a prepayment penalty. If you are thinking you can double the payments to pay it off early, you may need to think again. Some lenders will charge a prepayment fee because it costs them money if you pay it off early.

2. Out of Control Interest Rates

Interest is a huge part of loans and can be one of the common personal loan traps if you aren’t careful. Many personal loans will have high interest rates and there are some terms you will need to know in order to know what you are getting into. Compounded interest is interest that will be added on to other interest. A loan officer will calculate simple interest according the rate, length of the loan, and amount of the loan. Pre-computed interest is interest that is calculated at the beginning and then added to a monthly payment.

This means a certain amount of each payment is applied to the interest and the rest will be applied to the loan. Depending on how the lender sets this up, you may pay off the entire interest before any money actually goes to the principle of the loan. It’s important to understand the type of interest connected to your loan and the rates so you know how any extra payments could affect it and when you are actually paying off the loan.

3. Additional Loan Insurance

During a meeting with your loan officer, you may hear about additional insurance. The pitch will be pretty appealing, but be aware this is one of the common personal loan traps you don’t want to fall for. They will tell you that you need this because if you die during the time when you are paying back your loan, then your family will be in charge of paying back the payments. However, if you have an existing life insurance policy then it will help pay off the loan.

The second additional loan insurance that will be offered is unemployment insurance. This may or may not be worth it, depending on your job security. If you don’t think anything will happen to your job during the life of the loan, then you should feel comfortable opting out of this. However, if there could be a threat to your job then this insurance may be worth it. If you do opt for this insurance, make sure you know what it will cover. Some questions to ask include what qualifies as a reason to use the insurance and how long it will pay if you do become unemployed.

4. Avoid Personal Loan Scams

Top Ways to Recognize And Avoid Personal Loan Scams

If you are aware of the common personal loan traps, it can be easier to avoid personal loan scams. There are different ways to recognize personal loan scams if you know what to look for. Lenders need to be registered with the state, so be sure to check that the lender is registered before moving forward.

The specific rules will vary by each state, but any business that offers a personal loan will have to be licensed. It doesn’t matter if the lender is licensed in another state; they need to be licensed in the state you are in because of different jurisdictions. Be aware of any upfront fees before you get a loan. A legitimate lender won’t tell you to pay before you get your money.

While there are fees you can be charged, these will be a part of your loan and they won’t be asked for upfront. In order to avoid any personal loan scams, it’s best to stay away from lenders that demand fees upfront.

Smart Money Tip!

You can’t guarantee anything in life, so if a lender is using the word “guarantee” then you should think something is fishy. A lender that makes a loan sound like it’s guaranteed will be trying to catch you off guard. This is especially true if your credit isn’t that good.

If you don’t have good credit, you could be trying to ignore any warning signs and get a loan through a company that will guarantee you the money. However, the guarantee is likely a sign that the company or person promising your the loan is going to rip you off.

Research the loan company first…

When doing research for short term loan lenders, check the “About Us” section on any websites you come across. There should be a physical address and phone number. You can take it a step further and verify the information using Google Maps. Some lenders will give out information about the leaders in the company, accompanied by short bios that are easy to verify.

Any legitimate business will want to give you this information so customers can get to know them better. A business that will be trying to scam you won’t want to give out any information because the less you know, the harder it will be for you to track them down later after you have been scammed. When looking at websites, be sure to look for bad grammar and misspellings. A business should at the least use proper grammar. A poorly constructed website is a sign of an overseas phishing scam. If you aren’t yet in the market for a personal loan but are getting offers for loans, be cautious.

You can always look for reputable lenders on Loanry. Together with Fiona, we selected loan companies you should consider when you decide to get a loan. In fact, you can check if you qualify right now:


Watch out for phishing…

Any offers that are unsolicited could be a phishing attempt. Phishing attempts are common personal loan traps that can lead to a lot offinancial problems. These scams are done so in a way to make it hard to say no to, because it seems like such a great offer. If you do want to go with an offer you have received, do your research to make sure that it’s legitimate.

The last step to protect yourself from personal loan shopping traps is to be aware of any lenders that aren’t interested in your credit history. This goes along with lenders that offer guaranteed loans. Lenders have valid reasons for examining credit history, and one that doesn’t want to verify that you can pay back the loan is likely not legitimate. This means the lender could just be trying to get personal information.

5Falling for False Marketing and Other Downsides of Personal Loans

Falling for scams and other false marketing are two common personal loan traps. It’s important to research ahead of time. There are also some downsides to personal loans. Not everything will be worth financing with a personal loan. If you are just hoping to take a vacation, buy something expensive that you don’t need, or purchase new clothes for school, these items may not be worth financing.

A personal loan should be there for tough times or when a financial investment is there but someone doesn’t have money at his or her disposal. A personal loan is not a financial cure and instead is more like a temporary crutch. It doesn’t address the problem of debt but instead helps cover it up. You still have to pay back the personal loan. Many times individuals will use a personal loan to pay off high interest credit cards but then continue to use that credit card and get into another cycle of debt. If you need cash for a quick payment, such as a medical bill, personal loans are useful. However, you shouldn’t rely on personal loans to solve all your financial problems.

Is Getting a Personal Loan Bad?

Getting a personal loan doesn’t have to be bad and can be a viable option in a variety of different circumstances. If you are trying to consolidate your credit, a personal loan can be a good tool. Instead of many monthly payments, you would have one monthly payment with a lower interest rate than the interest rate on the card. This also works for refinancing student loans.

The interest rate on student loans can be high, but you may be able to get a personal loan with a lower interest rate that will help you pay off student loans faster. Beware that some student loans have tax advantages, where personal loans do not. If you use a personal loan to pay off a portion of student loans, then you don’t have the ability to deduct interest payments when you file income taxes. You can use personal loans to finance a purchase or pay for an event, such as a wedding.

A personal loan may give you a better deal than financing through the seller. A personal loan may also help you to improve your credit. If your credit report just shows credit card debt, then a personal loan will help give you a mix. Different types of loans are good for your credit score. By paying off some of your credit card debt with a personal loan, you may lower your credit utilization ratio. The lowered amount can give you a better score. Paying back the loan on time is also good for your score.

Is It Smart to Get a Personal Loan to Pay Off Debt?

Since one of the popular uses of a personal loan is to pay off debt, you may be wondering if it worth it to essentially get more debt to pay off the debt you currently have. The answer to if it is worth it will depend. If the stack of bills is piling up, then you will need to make decisions. If you are struggling to meet deadlines, you could be paying more in late fees, which just adds to the overall debt. Also, if you are only paying the minimum, then you are racking up more interest you will have to pay over your lifetime.

In this case, it could make sense to pay off debt as soon as possible with a personal loan. Even if you aren’t struggling to pay off the debt, there are still benefits of getting a personal loan as long as you avoid common personal loan traps. If your personal loan has a smaller interest rate, then you can use this to pay off the debt and avoid more interest in the long run. If you are using a personal loan, then you will need to be aware of the pros and cons of paying off the loan early.

One of the common personal loan traps is fees, such as the prepayment penalty. Paying off a loan early may also affect your credit. If you pay it off early, you could see a slight drop in your credit score. This is to encourage customers to pay the entire amount of interest on the loan. If you are paying it off early then you aren’t paying any more interest. When you do consolidate your debts with a personal loan, it makes it easier to track your bill payments. Instead of having multiple payments, you have one single payment.

Conclusion

Personal loans can be a great tool to use under the right circumstances. As long as you are aware of common personal loan traps, then you can find a loan that will help you with your financial situation.  Personal installment loan traps shouldn’t discourage you from getting a personal loan. Be sure to do your research. There are plenty of online lenders that may give you better interest rates, so don’t discredit online lenders. Just like with any loan, researching online lenders will help you avoid the common personal loan traps and get the money you need.

5 Personal Loan Fees to Know: Borrow Smarter

You find yourself in a crunch and have to take out a personal loan. You tell yourself that it is no big deal and you can pay it back easily and quickly, so you go to your nearest short term loan lender to apply. It should be simple enough. Just fill out some paperwork and get money transferred into your bank for the money you need, right?

In a perfect world, you are probably right. In reality, however, it is a much more complicated and, often, expensive process than you think. Suddenly you see charges for things you had no idea are involved in this little loan you need. Before you apply for a loan, there are some personal loan fees to know so that you are not blindsided.

Personal Loan Fees to Know

There are five basic types of loan fees: application fees, administrative fees, personal loan origination fees, personal loan late payment fees, and prepayment penalties. Read on for more details on each.

1. Application Fee

true-cost-of-personal-loanSome lenders charge an application fee to cover the cost of running your credit. These fees are usually not very expensive as they tend to cost less than $50, but they do add up if you have to put in multiple applications. Also, it is a waste of money if you do not get approved for the loan. Try to find a lender that does not charge an application fee or at least a loan you are fairly certain you will qualify for. It is an extremely contradictory effort to pay to get money that you will not get. If you waste money on application fees, you will then need not only the loan amount you initially needed but also to replace the application fee.

2. Administrative Fee

Administrative fees are another type of personal loan fee to know. This fee covers the cost of processing your paperwork for the loan. It may include the application fee or the two fees may be separate. Not every lender charges administrative fees so look for one who does not.

3. Personal Loan Origination Fee

There are lenders that charge what they call a loan origination fee. Instead of paying separate application and administrative fees, a loan origination fee covers the cost of the application, processing your information and paying out the funds. This is an upfront fee for taking out a loan. It does not come out of your pocket, though, like the others. Instead, it comes out of your loan.

What does this mean for you? If you apply for a $2,000 loan and the lender charges a 10% origination fee, the actual amount you receive will be $1,800. If you only need $1,800, this may not be a problem for you. However, if you need the full $2,000, you have to ask for a larger loan. Origination fees may vary from lender to lender, so when personal loan shopping it is important to determine who charges origination fees and how much that fee amounts to.

Personal Loan Fees

4. Personal Loan Late Payment Fee

Like every other bill, if you are late on a personal loan payment, you will owe a late payment fee. The amount of this fee will vary from lender to lender. It may be a set amount, like $30 for every late payment, or it may be a percentage of what you owe. The exact details should be in your loan paperwork when you first take out the loan. If you cannot find these details, speak with your lender.

5. Prepayment Penalty

“Ok, I’ll take out this loan and pay double payments every month to pay it off early.” That is what I think every time I have to take out a loan. Does it sound familiar to you? Maybe not, but it does sound smart. Surprisingly, it may not be. Some short term loan lenders may actually punish you for paying your loan off early because prepayment costs them money. Personal loan shopping online may help you find a lender that does not charge a prepayment penalty.

How to Avoid Personal Loan Fees?

The simplest way to avoid these fees, besides not taking out a loan, of course, is to find quick cash loans that do not charge any fees. It is simpler than you might think. Loans are a competitive market and many lenders cut the fees to attract clients. Personal loan shopping for no fees can help you find these lenders.

Things to Know Before Getting a Personal Loan

Taking out a loan is a big decision that should not be taken lightly. Consider it heavily before you apply and before you sign any paperwork. Below are some things you need to know and pay attention to before getting a personal loan.

https://www.loanry.com/blog/things-to-know-before-getting-a-personal-loan/

Your Financial Situation

Your credit score, income, and ability to repay are all considered when you apply for a loan. Before you speak to a lender or put in an application, know your financial situation yourself. Knowing how much of a payment you can afford and how your credit looks can lead you to the right lender and the right amount you should borrow. The knowledge can also give you the confidence you need to negotiate loan terms.

The Full Cost of the Loan

Just because you are borrowing $3,000, do not think that is all you will be paying back. Between the fees and interest, the cost will be exponentially more. Let’s look at an example:

I decide that I need $3,000 to cover repairs to my home, so I take out a quick cash loan. The lender charges a 5% origination fee and my interest rate is 10% for each year I have the loan. Because there is an origination fee and I need the full $3,000, I have to increase my loan request amount to approximately $3,158. This makes my interest $315.80 each year and the total I have to pay back $3,473.80.

The origination fee added $173.80 to my loan. The $473.80 that I have to pay back in interest and fees is almost one-sixth the amount of the money I borrow.

Understand what your loan will cost along with all additional fees so you can be realistic about paying it back. Let Loanry try to help you. Our partner Fiona brings you the best offers from different lenders. Enter your information and see if you qualify for any loan offered.


How Taking Out a Loan Will Affect Your Life?

Monetary costs are not the full extent of what you will pay for the loan. Unless you have a great deal of money lying around, in which case you would not need the loan, you will have to make sacrifices to pay it back. Think through these sacrifices you and your family will have to make and decide if it is worth the cost.

For instance, in the above example, I took out a loan and now I need to pay back $3,473.80. If that is spread out evenly for 12 months, my monthly payments are $289.49. Since my current income and outgoing money only allow a $150 payment, I have to figure out where that extra $139.49 is coming from. Will I pick up a second job and miss quality time with my kids? Will we have to temporarily stop saving for my teenager’s college for the year? Can we cut back on groceries or household items? The bottom line is that I have to cut something out or add to my income, at least until the loan is paid off. Each person will have to decide if the cost of taking out the loan is worth the changes that must take place.

A Short Term Loan is Not a Long Term Solution

So, you received your loan. Time to breathe a sigh of relief, right? No, not really. While that loan may be fixing your current situation, you have to understand that the present is all that it will fix, not the future. My $3,000 loan may fix my plumbing and leaky roof now, but what happens if the air conditioning goes out in a month or the car breaks down?

Since there is no extra money because I am paying the current loan, I cannot fix the new problems with out-of-pocket cash. Most likely, I have to take out another loan, if I can, to cover the new expenses, which then leads to figuring out how to pay the new loan. When something else happens three months down the line, the cycle just continues.

What Traps to Avoid When Getting a Personal Loan?

A lot of borrowers fall into traps when taking out a loan. These traps tend to fall into two categories: not being aware of the full scope of the loan and biting off more than they can chew. Below are some traps to watch for:

Not Understanding Your Interest Rate

Interest is a huge part of loans and not understanding it is a mistake. There are a few ways to calculate interest and borrowers need to know what type of interest they are paying.

Compounded

Compounded interest is interest that is piled on top of interest. The only way to lessen it is to pay more each month than what is due, pay early payments, or pay the loan off.

Simple Interest

Simple interest is calculated according to the amount of the loan, the length of the loan and the rate. If your loan is a total of $5,000, the length of the loan is one year, and your interest is 2%, you would pay $100 in interest for each year that loan is out.

Pre-Computed

Pre-computed interest is calculated at the beginning of the loan and added into the monthly payment. With pre-computed interest, a certain amount of each payment is applied to the interest while the rest is applied to the actual loan. Sometimes, you pay the entire interest off before anything is applied to the principle. It depends specifically on how each particular lender sets it up.

It is important to know and understand the type of interest connected to your loan as it affects how much interest is paid and how extra payments might affect your payment. Not knowing means you may get surprised when you feel like you have paid more than enough only to learn that you did not really make a dent due to the interest.

Not Knowing What Fees You Will Pay

Another trap is in not knowing what fees are included in your loan. There may be no fees or there could be tons of fees. Either way, you need to be aware of them.

Ignoring Penalties

It is reckless to ignore penalties. Any associated your loan can cost you if you ignore them. You do not want to get charged for something you were not even aware of.

Taking Out More Than You Need or Can Pay Back

This may seem like common sense, but many people fall into this trap. They get a higher amount and convince themselves that they can pay it back. Most of the time, though, they probably cannot. Be honest with yourself about your capabilities. If you can only afford a $100 payment per month, do not take out a loan on which you have to pay $500 a month. You will be digging yourself into a much deeper hole.

Personal Loan Shopping

How to Get a Personal Loan

One important step in getting a personal loan is finding the right lender. The easiest way to do this is through online lender search sites that help you locate a lender that may suit your personal needs.

Regardless of which lender you use, you will need to have a few things handy. Identification, proof of address, and proof of income are definitely on that list. Others may include references, tax returns, and other assets.  When you choose a lender, ask if they need any additional documentation.

If approved, read every contract document included before you sign. If you have any questions, ask the lender for clarification. Be sure that you receive a copy of the full contract.

Final Thoughts

Taking out a loan can be a daunting task. There are personal loan fees to know, different interest rates to understand, varying loan terms, etc. Just take a deep breath. This is a big decision so do not rush into it. Educate yourself on your options and use a site like loanry.com to find a  lender based on what may be relevant and available to you.

7 Common Reasons Personal Loans Are Rejected

What are the Most Common Reasons Personal Loans are Rejected?

What are the reasons personal loans are rejected, you might wonder? There can be many. Read on for more.

1. You Have an Error on Your Credit Report

Let’s be honest: Even short term loan lenders online can catch this one right off the bat, and many times, people simply don’t realize that most lenders really are that smart. In fact, many of their agents are trained to detect whenever there’s an error on your credit report. It’s just fact.

A good thing to note, on the other hand, is that most genuine errors can be corrected. All you would need to do is write an inquiry letter to the credit bureau in charge. Then report the matter. You can also contact the creditor directly. More often than not, this is better because the creditor can update all three of the major credit bureau at the same time. If either the bureau or a creditor agrees to fix the error, which many times do happen, then they will have the error removed, making for one less negative thing on your report. It’s worth a try, right? There is nothing you can lose by giving it a go…

2. You Carry Too Much Debt

When you shop personal loans rates and find out you’ve still got way too much debt under your belt, it may result in wasted time, both for you and for the people you’re inquiring from. You’ve got to fix that income – to – debt ratio first as that’ll always be the next thing that needs to get taken care of if you really want to move forward. Take our advice for it.

You’ve got to not only pay off your current debts, or keep them above water from the money sharks, but you’ve got to retrain your thinking entirely….so that you don’t make those very same mistakes again. And that takes discipline, determination, planning, continual strategy, assessment and even re-assessment of your goals. It won’t be easy, but it can be done, and you need to do it.

3. Your Employment is Unstable Because You Change Jobs Frequently

This is a tough one, especially for those managing money under 30 years of age, which many now call the “job hopper generation”. Millennials, indeed, do have a knack for leaving their current situation — be it work, school, home or something else — to go and venture out in the name of “change”. But too much instability, of course, can be a bad thing. There must be balance. And Baby Boomers have likewise reported that keeping this generation in a state of stability, and not having it constantly run after every little thing that “shines”, is perhaps their greatest challenge of this decade.

But not all who ‘hop jobs’ frequently are in the young crowd. In fact, anyone can do it, and people of all ages and genders and cultures are guilty of this ever-growing trend. In fact, it’s common knowledge, now, that most people will leave their employer after about 1 – 2 years, and others will stick around no more than about 5, in total. And these are the more committed employees. There’s just no sense of job or company fidelity, as there once was 30 years ago.

Layoffs happen, companies change, salaries drop, and good workers are gone. Sometimes, it’s even personal issues that arise and pull good employees from their place of work. This happens more and more in our society…..

When You Should Get a Personal Loan: Smarter Finance

4. You Have Insufficient Income Overall

So what are the reasons personal loans are rejected? We ask once again because the question must be stressed. And did you know that this one was an answer, too? You might have.

Yes, that’s right — lack of sufficient income will definitely knock down that income – to – debt ratio we mentioned, and in a negative way, leaving you fending for other options. So if you want a loan, you’re going to need to make enough money to pay it back. Simple as that, friends…

Perhaps you can help with this by getting two jobs if you’re up for it. Make the time; it may be well worth your efforts. And can even give you a greater sense of purpose, responsibility, achievement, value in the workplace, and even self – control. Take your mind off your excessive spending habits, for instance, and use the time you could’ve been swiping all those cards…..at your second job, where you can be learning new skills, making money (instead of losing it), and teaching yourself how to be more disciplined. Have you ever thought of it that way?

5. You Retain Too Low of a Credit Score

So what are the reasons personal loans are rejected? WHAT??? Credit score? Really?

Yes, really, and it does happen to more people than you know. Having a score under 600, for instance, isn’t terrible, but you may have shop cash loans bad credit for emergency money. Even one under say 700 is pushing it for prime loans. And this all just goes to say that a credit score that is “average”, though better than “poor” or “terrible”, would thus become your next step to strive for….if you are in this situation. Get it up just a little higher, with time and patience. And then just a little more, then a little more, and you get the idea…..

One of the all-time best ways to improve your credit score is to pay off all credit lines/credit cards; the very least you can do is pay every monthly minimum payment, if nothing else, for doing this alone will gradually improve that score for you. And the sooner, the better if you need a personal loan with bad credit. You can also cut down your revolving lines of credit or credit cards, only keeping 1 – 3, max. Don’t overdo it. And make sure that, out of these few you now hold, that 30 % or less of them is being used….or basically, is the remaining amount you owe on them.

6. You’ve Got Too Many Loans Out Currently

Credit Score ManagementIf you’ve got a car loan, a student loan, a business loan, a personal loan, a mortgage loan and perhaps some other loan going on all at the same time, this could be a huge red flag. In fact, without a doubt, it is….as it tells the lenders that the main source of funding for all these different needs in your life is coming solely from borrowed money and not your income or savings. See how bad this looks in the eye of the person who is considering whether or not to approve you? See it from their point of view, and you will understand perfectly.

7. There’s Too many Personal Loan Applications With Rejections

So what are the reasons personal loans are rejected? This is the last time I’ll state the question. So don’t worry. I know you’ve probably gotten tired of reading it on here, by now.

This last and final reason has to do with too many revolving applications, which may or may not take a hit on your credit. Creditors will manage to get on your credit file, either now or in the near future. Everything is updated regularly.

But don’t dismay — if you’ve got way too many of the reasons applications are rejected on your credit history, just give it some time for them to clear off the record. One to two years is usually enough, and then you can try getting a loan again, but not overdoing it. Don’t apply to way too many places again. Learn from the mistake and be patient.

Self – control is a major contributing factor that creditors and bureaus look for when determining to approve you on any loan, and the fact that you have applied way too many times, getting rejected, and continued to apply nonetheless only shows that you are impatient, rushed, perhaps impulsive, and lack the will to wait a little longer…until your finances, payment history, income, credit or something else improves. And you have to be the one to discipline yourself and take that next step, saving money for the debts you owe, first.

So after you sit down, look at your finances and organize this huge part of your life, don’t apply. You need to improve your situation in order to get approved. And when you do that, you need to find a credible lender. This is when you can return to Loanry for some guidance. Here are some options for you, just put in your information, and you may get suggestions about a potential lender for you:


In Conclusion

So what are the reasons personal loans are rejected? You’ve now seen the major seven. But of course, there are some others, too. The denial could result from a whole wealth of different sources.

Nonetheless, our goal here was to show you some angles you may not have assessed before. And we hope we have. At least, you’ve been pointed in the right direction and given more insight into the matter, with some additional resource links listed here, where you can read further…..

And hopefully, the answer to the question, “So what are the reasons personal loans are rejected?” has now been ingrained in your mind. Remember this information the next time you choose to apply for a loan as it could save you time and effort in the process. And best of luck in your journey to healthy financial future!

A Personal Loan Without a Credit Check: Borrowers Bonus?

You may find yourself in need of money for bills and other financial obligations, with your next paycheck coming too late to help you find relief. Getting a personal loan without a credit check might seem like a good option if you’ve got bad credit which prevents you from obtaining any other type of loan. The maximum amount you can borrow can vary along with the interest rates.

But is it a good idea to get a personal loan without a credit check? It pays to understand what’s involved in acquiring this type of loan. Take a hard look at whether you’re able to meet the terms outlined, especially when it comes to short term loan lenders. We’ll discuss what it means to take out cash loans with bad credit from these sources in a bit.

Personal Loan Without a Credit Check 101

If you’re interested in pursuing a personal loan without a credit check, look for lenders who offer true “no credit check loans.” Be careful of the wording a lender places in advertising materials, like “non-traditional credit check.” The headlines might imply “no credit check,” but the lender may still perform an inquiry on your credit history, which could lower your credit score even further.

Where Can You Get a Personal Loan with No Credit Check?

Payday lenders and other no credit loan businesses may have offices set up near you. You may also receive solicitations in the mail from lenders encouraging you to take out a personal loan without a credit check. They should have contact information allowing you to call or email them directly about a loan inquiry.

Online Lenders

You can also get personal loan online by signing up for platforms offering connections to a variety of no credit check lenders. Think carefully before signing up for one of these. You may be giving explicit permission to receive direct solicitations from various lenders when you provide your contact information.

Shop personal loans from online lenders who make their terms clear and seem invested in the idea of using a no credit loan to help you improve your financial situation and build up your credit score. You can accomplish both through an online lender by:

  • Making payments on time
  • Paying more than the minimum amount each month
  • Get your loan balance down to below 30% of the original amount

Obtaining a personal loan from an online lender helps diversify your financial portfolio. They also have less impact on your credit score than a credit card. But you need to do your research and go with a reputable lender. Our partner Fiona may have some suggestions for you. Put in your information below for potential offers:


Applying for a No Credit Check Loan

You can visit the lender at a local office to fill out an application. Many lenders also make it possible to apply online. Most of them require additional documentation showing you can afford to pay the loan back, like a bank statement or recent paycheck stub.

The time it takes to receive a decision can vary. Some online lenders can provide an immediate response, while others can take longer. You receive funds quickly after receiving approval, usually within a day or two. Note that some lenders offer to deliver funds within a day for a small “fee.” These are the types of terms that could cause a no credit check loan to cost you more in the long-term.

No Credit Loan Types

Here’s a look at the basic types of no credit loans you could obtain, and the general terms associated with them.

Secured Personal Loan — You offer up an asset, like a car title, as collateral for any funds received. The lender can take possession of the property if you fail to repay the loan.

Unsecured Personal Loan — Since these loans bring on more risk for the lender, they’re likely to charge much higher interest rates, meaning it could take a lot longer to pay off your original balance.

Should I Avoid “No Credit Check” Loans?

Lenders offering no credit check loans advertise to those with poor credit history. The interest rates on no credit check loans tend to be much higher than those on a traditional loan.  Some states have laws capping the APR (Annual Percentage Rate) on traditional loans at 36%.

If you live in a state in which such restrictions don’t apply to no credit check loans, you could see astronomical rates charged on even a $500.00 loan. In those instances, obtaining a personal loan without a credit check could see you end up with interest rates of 200%, 300%, or even higher.

Some lenders may charge no interest if you pay back the money by a certain date. Can you feel confident you’ll be in a financial position to pay what you owe? Failing to do so makes you obligated to meet the APR terms outlined by the lender. You could end up in a cycle where you’re only paying interest and never make a dent in the balance of your loan.

Payday Loan Companies: Why You need to Stay Away from Payday Loans and Title Loans

Payday and title loans offer a quick-fix to what may seem like a short-term financial issue. Both must be repaid quickly, usually within a month of taking out the loan. State laws determine what fees and interest rates you get charged if you aren’t able to pay the funds back on time.

Even in states with caps in place, the fees and rates charged by these companies can be as much as 400% of your original loan amount. That’s $30.00 for every $100.00 you borrowed.

Many payday lenders ask for a post-dated check which they attempt to cash on the date your repayment is due. Title lenders require a hard copy of your title license and charge extremely high interest feels.

Both options present the danger of you never being able to pay off the fees and interest applied by the lender. You could also end up losing your car if you fall behind on a title loan. People looking to improve their financial situation often end up worse off than they were before.

Alternatives to Loans with Credit Check

Consider one of the following options before taking out a personal loan without a credit check.

Get a Cosigner for a Loan — You could ask a trusted person in your life to co-sign for a loan if they have good credit. Remember, they will be responsible for paying the lender back if you default on your loan. Take care when considering this option, because you don’t want to put someone else in a bad financial position due to your inability to repay the loan.

Apply at a Credit Union or Community Bank — Many smaller banks will consider giving loans amounts as low as $500 to members with poor or limited credit history. Their rates are also capped anywhere from 18% to 36%, making it less likely you get caught in an endless interest repayment loop.

Grants or Loans from Non-Profit or Religious Groups — Try appealing to community organizations who make a practice of helping people going through sudden financial problems. They can also provide you with educational resources that guide you in future money management.

Personal Loans From Friends or Family — You can ask your friends or family for a temporary loan. You do risk damaging your relationship with them if you’re unable to overcome your financial difficulty and pay them what you owe when it’s due.

How to Get a Loan With Bad Credit?

Acquiring a personal loan with bad credit can be a difficult process. It starts with doing thorough research on any lender who may be willing to consider your application. Try to build up a list of 4-7 promising leads and write them down on a piece of paper, leaving room for additional comments on each of them.

Use that comment space to take note of the interest rates charged to those with poor credit, ordering from highest to lowest. Next, write down any penalties charged for early repayment and other fees charged for taking out the loan.

Find a free online calculator and begin working out the lowest and highest APR rate you would end up paying a lender each month based on their stated terms. Once you have that amount, add in any origination fees, early repayment fees, and other costs to get a final number.

Once you’ve figured out how much you owe, select the lenders with the final total best fitting your budget and reach out to them. Make sure you’ve been honest in calculating what you can afford to avoid putting yourself in a deeper financial hole if you do get approved.

Final Thoughts

Taking out a personal loan without a credit check can seem to be the answer to seems to be an overwhelming financial crisis. Make sure you’ve considered all your options before choosing to go this route. Don’t allow yourself to become trapped in a worse economic quagmire because you signed up for a no credit check loan without fully understanding the terms or if you cannot meet the stated repayment terms.