A personal loan is a great way to fund large purchases, like home renovations or a wedding.
Its also a good solution for consolidating your debt.
But not all loans are created equal.
Not sure where to start with your credit score? Here are nine smart moves that will help youboost your credit score.
It doesnt have to be.
Well touch more on credit score and credit history and the difference between hard and soft inquiries below.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
Consider Alternatives
Foremost, determine if a personal loan is actually the best option for you.
What are you hoping to use your loan for?
In general, we recommend personal loans for three purposes:
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2. Review Your Finances
Personal loans are a big commitment.
Youre on the hook for monthly payments for a set number of years.
In that sense, these loans are a lot like a car payment or mortgage payment.
And, like interest, thats money youll never get back.
Check Your Credit Score
Credit scores play a huge factor in the loan approval process.
That doesnt mean its impossible.
These lenders can command larger fees as well to protect their risky investment.
Most personal loans are unsecured loans, meaning you dont offer any collateral.
This is riskier to the lender, which makes it doubly risky for bad credit borrowers.
Another option is getting a co-borrower to sign on to your loan software.
Thats a good thing but it can be overwhelming.
Some sites also offer a personal loan calculator to help with your comparison.
But what should you be comparing?
Just because the minimum APR advertised is attractive does not mean it will be what you are offered.
Luckily, many online lenders now let you get pre-qualified for a loan.
You will need to provide basic info like your name, date of birth, and income.
Many lenders will also ask why you are taking out a loan.
Comb the documentation for information on fees (origination, late, prepayment).
Complete the utility
When you have found the winning loan, move forward with the process.
Some lenders can fund loans within one or two business days and a few can even do same-day funding.
(And while youre at, consider one of thesebanks that no longer charge overdraft fees.)
Personal Loan Terminology
When youre researching loan options, you might come across some new terms.
Unsecured Loan
An unsecured loan is not backed by collateral.
This poses a greater risk for the lender; thus, interest rates tend to be higher.
These fees can vary depending on credit score but can sometimes be upwards of 8% to 10%.
Frequently Asked Questions (FAQs) About How to Get Personal Loan
Still have questions about loans?
They will also look at your DTI.
Many lenders now perform a soft credit pull to see if you are pre-qualify.
This will not affect your credit score.
However, not every lender offers this, so review each lenders process carefully before entering in any information.
Most personal loans are unsecured, meaning they dont require collateral.
However, some lenders do offer secured personal loan options.
Most financial professionals advise against payday loans even though they are easy to get approved for.
Each lender has its own criteria for determining loan eligibility.
While most lenders do not publish each criterion, many do publish minimum credit score requirements.
Salary requirements are not usually available on a lenders website.
Timothy Moore covers banking and investing for The Penny Hoarder from his home base in Cincinnati.
When you log into your bank account, how do your savings look?
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
