How To Get Personal Loan | Loan Insurance Tip
How To Get Personal Loan | Loan Insurance Tip
Tips for Comparing Personal Loans
Many personal loans can be used to fund common family
expenses like home improvement projects, wedding expenses, vacations and, in
some cases, even the purchase of land. Borrowers also turn to personal loans
for debt consolidation, because interest rates are often lower for personal
loans than for credit cards—especially for applicants with good to excellent
credit.
These loans are available from traditional banks, credit unions and online lending platforms that make it easy to apply online—without having to visit a bank branch. What’s more, many personal loans can be funded within a few business days so you don’t have to wait to get the money you need. The best personal loans offer low interest rates for well-qualified borrowers, flexible loan amounts and repayment terms and limited fees.
If you need money fast, Alliant Credit Union typically makes same-day online personal loans between $1,000 and $50,000. The $14 billion Chicago-based credit union, founded in 1935, is one of the biggest in the nation, with 600,000 members. In addition to personal loans, Alliant offers home and auto loans, credit cards, checking and savings accounts, individual retirement accounts, trust accounts, and insurance policies.
SoFiMinimum credit score
650
APR range
7.99% to 23.43%
with autopay
Loan amounts
$5,000 to $100,000
LightStream
Minimum credit score
660
APR range
5.99% to 21.49%
with autopay
Loan amounts
$5,000 to $100,000
Marcus
Minimum credit score
Marcus
APR range
6.74% to 19.74%
with autopay
Loan amounts
$3,500 to $40,000
LendingPoint
Minimum credit score
600
APR range
7.99% to 35.99%
Loan amounts
$2,000 to $36,500
The above personal loan rates and details are
accurate as of Nov. 1, 2022. While we update this information regularly, the
annual percentage rates (APRs) and loan details may have changed since the page
was last updated. Keep in mind, some lenders make specific rates and terms
available only for certain loan purposes. Be sure to confirm available APR
ranges and loan details, based on your desired loan purpose, with your lender
before applying.
Tips for Comparing Personal Loans
Consider these tips when comparing personal loans:
Many personal loan providers offer prospective borrowers the ability to prequalify for a loan. This means the applicant can submit details about their financing needs, income, housing situation and other relevant information to find out what kind of loan amounts, rates and repayment terms they are likely to qualify for. Even better, this process typically only requires a soft credit inquiry so you can shop around without hurting your credit score.
Consider the purpose of your loan.
While personal loans can be used for a pretty broad range of purposes, they are limited to things like consumer debt consolidation, home improvements, vacations, weddings, funerals, large purchases and other personal expenses. For that reason, lenders often restrict the use of personal loans for postsecondary education expenses, business purposes and illegal activities, at a minimum. When considering a lender, confirm that your intended use of the loan is permissible under its borrower agreement.
Keep an eye out for additional fees.
Some lenders offer fee-free personal loans that don’t require borrowers to pay origination fees, late payment fees, prepayment penalties or any other common loan costs. However, this is more the exception than the rule, so it’s important to ask about fees when shopping for the best loan terms. And, if a lender charges an origination fee, find out whether it’s built into the APR or taken out of the loan amount prior to funding, as this may impact the loan amount you need to request.
Evaluate the lender’s customer support options.
If you’ve found a lender that’s prepared to offer the money you need at acceptable terms, there’s one more thing to consider before signing the loan agreement. While customer support may not seem like a big deal in the honeymoon phase of your loan, it can make a huge difference if you encounter issues with payments or face a financial hardship during your repayment period. Review the lender’s customer service resources and read reviews from past and current borrowers to make sure it’s a good fit.
What Is a Personal Loan?
A personal loan is a type of lump-sum financing borrowers
can get from a traditional bank, credit union or online lender, which they can
use for a variety of expenses. Common uses include medical bills, auto repairs,
home improvement projects and debt consolidation. Personal loans typically have
repayment terms between two and seven years and offer interest rates as low as
3% for high-qualified borrowers.
How Do Personal Loans Work?
Personal loans are typically available from banks, credit
unions and online lenders. Prospective borrowers apply for a loan either online
or in person and then wait for a decision—approval or denial. If approved,
borrowers receive their funds as a lump-sum payment into their bank account,
and interest starts to accrue in the first month. Personal loans require fixed
monthly payments over the entire loan term, typically between one to seven
years.
Average Personal Loan Interest Rates By Credit Score
Here are the average estimated interest rates for personal
loans based on VantageScore risk tiers, according to Experian. Please note that
interest rates are determined and set by lenders. The rates provided are
estimations.
Average Personal Loan Interest Rates By Credit Score
Reasons to Get a Personal Loan
You can use personal loans for just about any type of
personal expense. Most commonly, though, personal loans are good for:
If you need money right away for unexpected expenses like medical bills, funeral costs, car repairs or something else that needs immediate attention, you can use a personal loan.
Debt consolidation.
Personal loans are a great way to consolidate high-interest debt to help save money on interest and streamline your payments.
Home improvements and repairs.
If you have an upcoming home improvement project, you can take out a personal loan to help finance the costs. You can also use personal loans for unexpected home repairs or maintenance expenses.
Auto financing.
While auto loans are the most common way to finance a vehicle, personal loans also can help you get the job done. Personal loans have fewer restrictions on the types of cars you can purchase, but they typically charge higher interest rates than traditional auto loans.
Moving costs.
The cost of moving can add up quickly. If you don’t have cash on hand, personal loans can help you finance the costs.
Best Place to Get a Personal Loan
You can get personal loans from three types of institutions:
Banks. Many local and national banks offer personal loans in addition to other financial products, such as checking and savings accounts. If you have an existing relationship with a bank, you may want to consider opening your personal loan through that bank.
Credit unions. These are local to your community and tend to offer applications both online and in person. Credit unions require membership, so be sure to check if you’re eligible.
The best place to get a personal loan is where you can
access the most favorable terms and loan limits that fit your needs.
How to Get a Personal Loan
While the process varies by lender, follow these general
steps to apply for a personal loan:
Start by checking your credit score for free through your credit card issuer or another website that offers free scores. This will give you an understanding of your creditworthiness and your qualification chances. Aim for a score of at least 610; however, a score of at least 720 will yield the most favorable terms.
If your score falls below 610 or you want to boost your score to receive the best terms possible, take time to improve your score before applying, such as lowering your credit usage or paying off unpaid debts.
Determine how much you need to borrow.
Once you check your credit score, calculate how much money you want to borrow. Remember, though, you’ll receive your money as a lump sum, and you’ll have to pay interest on the entire amount—so only borrow what you need.
Shop around for the best terms and interest rates.
Many lenders will let you prequalify prior to submitting your application, which lets you see the terms you would receive with just a soft credit inquiry. Prequalifying lets you shop around for the best rates without hurting your credit score.
Submit a formal application and await a lending decision.
After you find a lender that offers you the best terms for your situation, submit your application online or in person. Depending on the lender, this process can take a few hours to a few days.
Borrowing money doesn’t always have a negative impact on
your financial situation. In fact, 69% of Americans say borrowing money made
their financial situation better. You, too, can experience the upside of
borrowing money by following responsible practices. To avoid financial pitfalls
when borrowing money, we recommend you:
Borrow below your means and within your budget
Take the time to find the lowest rates and fees to reduce
overall borrowing costs
Improve your credit score or apply with a co-signer to
increase your chances of receiving the most favorable terms
Don’t overspend if you’re using a credit card or line of
credit
Set up automatic payments to never miss a payment
Monitor your monthly statements
Consolidate high-interest debts into one streamlined payment
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