Do you need money ASAP? A personal loan can help you make a big purchase, consolidate your debt, or help fund an investment opportunity. Several lenders provide personal loans online and in person at banks, credit unions, and other financial organizations.
Lenders want your business, even if you have bad credit, so you should shop around for perfect terms for you. Comparing loans and lenders will help you choose the one best suited for your needs. With the right loan, you can save $100s or $1,000s in interest on credit accounts. Check out these tips on picking the right personal loan.
Your credit score and history influence your loan’s interest rate and terms. You can get a free copy of your credit report each year by contacting one of the three credit bureaus, Equifax, Experian, and TransUnion.
A credit report will show your financial history from the time you opened your first credit account. Negative marks can stay on your report for years and affect your score. Take a careful look at your report to make sure there are no errors.
If you find a mistake, you can contact each bureau to investigate the claim. The bureau will contact the bank or company and have them check their records. The bureau will correct, update, or delete incorrection information, which can increase your credit score.
The following marks stay on your credit report for seven years:
· Missed payment (more than 30 days late)
· Account charge-off (more than 180 days without payment)
· Repossession, such as a dealer taking back a vehicle
· Having an account in collections
· Delinquent student loans
· Filing for chapter 13 bankruptcy (10 years for filing chapter 7)
· Home foreclosures
These negative marks could prevent you from securing a loan or getting a reasonable rate. If you are on the cusp of having one of these marks fall off your record, you might want to put a hold on your loan search.
You can quickly improve your chances of getting one of the best personal loans by taking some steps before applying for your loan. For example, keep your credit card balances below 30 percent of the limit, such as having less than $300 on a $1,000 card.
You might also want to get a second job to show a higher income. Even an extra few hundred dollars each month can make your financial situation more favorable to a lender that looks at your debt-to-income ratio. Certain lenders have personal loans for bad credit borrowers, so you can still obtain funds even if you have a poor financial history.