There are many options to choose from when looking for personal loans. Apart from looking at the loan options from your credit union or bank, there are other places you can borrow money even faster. For example, some online lenders will offer loans to anyone regardless of whether they are creditworthy or not.
Unfortunately, you’ll need to do some due diligence before deciding on a personal loan that perfectly matches your needs. This is because so many things can vary from one lender to another—terms, fees, and rates, among others.
So how can you find the best personal loans? This guide will walk you through some tips on finding the best personal loans.
5 Best Ways for Finding Your Best Personal Loan
1. Determine the Amount You Need
Before borrowing a personal loan, it’s best to have a plan on how you’ll repay your loan. Lenders are good at determining your ability to repay before lending, plus most lenders would not welcome the idea of issuing you with a loan then ending up not paying back.
Knowing that some lenders deduct an origination fee from your loan, you will need to do some calculations and determine your overall fee.
Find out the repayment terms and rates offered by the lenders. Once you know about the fees associated with your loan, calculate the amount you’ll be required to pay monthly. And from your monthly income, you should be able to determine how much loan you’ll take and be comfortable repaying.
2. Know Your Credit Score
Almost all reputable lenders will look at your credit score to determine whether or not they’ll lend you some money.
The credit score that will get you approved with a competitive interest rate should be anything above 670. However, most personal loan lenders will just need a credit score of between 580 and 669.
If you want to get a FREE credit report, AnnualCreditReport.com should help. Please note that the FREE credit report you’ll get from AnnualCreditReport has been compiled from three credit bureaus and is only available once a year.
If you have any issues or want to raise any complaints with your credit report, contact the three major credit reporting agencies (Experian, Equifax, and TransUnion).
3. Consider Your Options
Most lenders will offer either a secured personal or an unsecured loan. You will need a cosigner for an unsecured personal loan with a reasonable interest rate depending on your creditworthiness. Don’t worry if you can’t find a cosigner because you’ll still secure qualify for a secured loan.
But here’s the catch: qualifying for a secured loan with favorable terms will require collateral like cash in a savings account/ certificate of deposit, a vehicle, or a house. So your lender will sell your collateral if you fail to repay the loan.
Getting a personal loan from traditional banks will be hard if you have a bad credit score. Not to worry, though; some credit unions offer cheaper alternatives to payday loans, which you can also take advantage of. There are also other bad credit loans Australia guaranteed approval on Centrelink lending platforms, such as Gday Loans, that’ll match you with the best lending institutions, even with a bad credit score.
4. Determine the Type of Loan You Need
Because by now you already know your credit score and you have carefully gone through your options, choose the best loan for your situation.
Some lenders only approve loan applications if you can properly use the money you’re borrowing. Others are a bit more flexible and will issue you the requested loan if you meet their eligibility criteria.
Lenders are different; some may allow you to use your personal loan for business purposes, while others may not welcome the idea. Either way, it is always wise to find a lender who can comfortably lend you money for whatever reason you need it.
5. Compare Interest Rates From Different Lenders
Don’t always rush to accept the first offer you receive—shop around to find better rates from some of the best personal installment loan lenders, such as Heart Paydays. And please don’t forget to compare the different loans offered by these lenders as there could be different interest rates for different loan types.
Even though you can get personal loans from online lenders, first check with your local bank or credit union to avoid the hefty fees most online lenders charge.
Some lenders will allow prequalification with a soft credit check without impacting your credit score. Identify which lenders can offer you a prequalification process and take advantage to know which rates are available.
You now understand personal loans better, so comparing several offers and choosing one with the lowest fees and rates shouldn’t be a daunting task. Depending on your needs, choose an affordable personal loan that will cater to your needs.