Personal Loans Let You Borrow Almost Any Amount! — Find Out How!
Whether you need just $1,000 or even $20,000+, personal loans help you pay for pretty much anything (even with low credit). Click here to learn about the perks of personal loans and how you may apply.
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If you’re looking for extra cash to pay your bills, make a big (or small) purchase, or even consolidate some debt, it’s hard to beat the flexibility of personal loans. That’s because these loans come in almost any amount and give you real cash that you can use on any purchase.
What Makes Personal Loans Better Than Other Options?
Pay for Anything You Want
Unlike car loans, home loans or even student loans, personal loans don’t come with many restrictions. You can use the cash from a personal loan to:
- Pay off credit cards.
- Pay bills.
- Remodel your house.
- Buy a car.
- Refinance debt.
When it comes to what you can spend your personal loan money on, the sky’s the limit.
Unsecured Loans Are Less Risky
Unlike car and mortgage loans, personal loans can be “unsecured,” so you don’t need to put up your house, car or any other belongings as collateral. Start your search for an unsecured personal loan today.
Get a Personal Loan Even With Bad Credit
Personal loans range from anywhere between $1,000 to $100,000 depending on the credit score and needs of the burrower. However, even with bad credit, you can still easily get loans under $10,000 from many different lenders.
Your credit is only one factor that lenders look at. They also see your repayment history and your trustworthiness with other lenders. Find out more about how you can qualify for a personal loan with bad credit below!
Get Low Interest Rates
Personal loans also come with competitive interest rates, which makes it easier to find a loan that will work for your needs.
Interest rates are calculated based on your credit score and other factors such as your previous loan history. Usually, lenders charge between 7 to 9% interest on a personal loan but this amount can be less or more depending on the lender and borrowers financial history.
On average, you can expect to pay back a $10,000 personal loan within 3 years at an interest rate of less than 9%.
Another great thing about personal loans is that you can get a low interest rate even if you have a bad credit score. Even if you get an interest rate of 10%, you are still better off taking out a personal loan than putting a large or unexpected expense on a credit card, which charges a much higher interest rate.
The average interest rate for a personal loan is 9%, while credit card interest rates are 17%, so a personal loan will be less expensive in the long run.
Where Can I Get a Personal Loan?
You can get personal loans from different types of lenders and they each come with their own terms and conditions. Below are the three main places you can get a personal loan.
Most borrowers get personal loans right from the bank. Bank lenders are the most common and offer many different amounts for personal loans because they have the most resources.
Some of the best big bank lenders include:
- Marcus and Goldman Sachs
- American Express
Credit unions are similar to banks and offer a variety of personal loan options. Because they are member-owned, they often have slightly better interest rates and terms than banks when it comes to personal loans.
If you’re looking to get a personal loan from a credit card, here are some suggestions:
- Alliant Credit Union
- Connexus Credit Union
- PenFed Credit Union
Online lenders usually offer the most flexible terms for personal loans because there are so many online options to choose from. You can also easily apply online in just a few minutes.
Each option has its pros and cons, so it’s important to shop around and see which lender offers you the best loan terms.
Regardless of which lender you choose, most personal loan options will always have a lower interest rate than credit cards.
Some of the best lenders you can find online are:
Types of Personal Loans
Before you decide where you want to get your personal loan from, you need to decide what type of loan you’re looking for. There are a few different types of loans you can choose from.
Secured vs. Unsecured
First, you have secured versus unsecured loans. Secured means that a loan has collateral attached to it.
For example, if you fail to meet your payments on a loan, the lender can repossess your home or vehicle or any other asset you used as collateral when you agreed to borrow money from the lender.
On the other hand, an unsecured loan does not require any collateral, so borrowers do not need to worry about the lender coming after their belongings.
This is especially helpful if you are already struggling to afford your monthly payments since it means you won’t need to risk the things you already have.
Fixed Rate vs. Variable Rate
Next, we have fixed rate loans versus variable rate loans. These are pretty easy to understand. A “fixed” rate means your interest rate for a loan will never change until the loan ends, while “variable” interest rates may change every month depending on the terms of your loan.
There are a few things you need to keep in mind with these loan types, such as different monthly payments or different loan terms, so be sure to look over your loans carefully before deciding which one is right for you.
How to Apply for a Personal Loan
There are a few ways you can apply for a personal loan. Most people visit their local bank or credit union for a consultation and apply for one of a personal loans program in person. Others choose to go with an online lender and apply quickly online through the lender’s website.
Where and how you apply for a personal loan will depend on your loan needs. If you need to be approved right away, going to a physical location like a bank might be faster.
You can ask for pre-approval from your bank or credit union so you can avoid a lot of hard credit checks that may affect your credit score.
If you don’t have time to go to a physical location or the loans from banks do not offer what you need, you can apply online and not worry about your application for a few days while you wait to hear back from your chosen lender.
At the end of the day, the application method will really depend on your individual needs.
Why Is Your Credit Score So Important?
Your credit score affects how high or low the interest rate on your loan will be. If your credit is very low, you may even have a hard time getting approved. You should always know your credit score before applying for a loan!
What You’ll Need
When applying for a personal loan, you will need to have the following documents on hand:
- Loan application (Any paperwork required by your lender)
- Proof of identity (Driver’s License, Passport, etc.)
- Proof of address (Bills, lease agreement, credit statement, etc.)
- Proof of income (Paystub, W-2 form, tax return, etc.)
All of this documentation can be filed in person or electronically depending on how your lender wants to process your application.
Most lenders require some type of application fee, but they’re usually not expensive. Fees can range between $25 to $50 and some banks, like Citizen’s Bank, have no fee at all. You should also discuss fees with your lender before applying to see if you can get them waived.
After you apply and are approved for a loan, there are a few other fees you will need to look out for.
Avoid Fees With NO-FEE LOANS
Want to actually keep the funds you receive from your personal loan? Get the most when you borrow with a no-fee personal loan!
First is the origination fee, which is charged right after you are approved for your loan. This fee can be 1 to 6% of your total loan amount depending on your lender. So, for example, if you borrow $5,000 and your origination fee is 3%, your fee will be $150.
To avoid an origination fee, look into lenders that do no charge one, like American Express or SoFi. There are plenty of lenders out there that charge little to nothing for this fee, so be sure to keep your eyes peeled.
This is one that everyone is familiar with and it’s pretty inescapable. Almost no lender is free from having some sort of late fee. The only major lender without a late fee is Marcus and Goldman Sachs, but they may increase your interest instead depending on how late your payment is.
Most fees are somewhere between $20 and $50, and some lenders charge a percentage based on the amount you have left to repay.
Okay, this fee is a little hard to understand but it does exist. If you pay back your lender in full before the end of your loan period, you may be charged a prepayment fee.
You would think it would be better to pay back your loan earlier, but that is not the case for all lenders. On average, lenders with a prepayment penalty will charge you 2 to 5% of the total loan amount for paying them back too early.
Not all lenders have a prepayment penalty in place, but some do so be sure to keep an eye out for them if you plan to pay back your loans ahead of time.
Who Can Get a Personal Loan?
Who can get a personal loan? The short answer is pretty much anyone. Since there are so many lending options available, almost anyone can apply and get approved for a personal loan.
Some restrictions still apply, of course. Depending on your credit history and credit score, you may not be eligible for certain loan types or amounts.
However, that does not mean that a personal loan is out of reach just because you have a low credit score. Even people with bad credit scores can get a personal loan from a flexible lender, the amount of the loan just may not be as high.
The moral of the story is, if you need some extra cash, don’t be afraid to shop around for a personal loan just because of your credit score. You’d be surprised at how many lenders are willing to work with you and how many different types of loan options there are out there.
Buckle down, do your research and get the personal loan you want to afford the things you need most.
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