How to Pick a Personal Loan Lender for Your Needs
You’re going to be getting married soon. You don’t have enough money in your pocket to pay for all of the expenses. You have some friends and relatives who are willing to help you out, but it’s not going to be enough.
Instead of pushing back your wedding date, you should consider talking to a personal loan lender. As long as you take the time to search for the best rates, you won’t be going into your marriage with too much debt.
You’ve also got to read the loan terms and conditions and do your research. The last thing you want is to get scammed. Keep reading to learn how to find the right lender for all your money needs.
Do Your Research
When looking at options for loan providers, you’ve got to do your research. You want to make sure that the company is legit before you hand over your social security number and other personal information. To start, head over to the company’s website.
Most lenders have information about themselves on the site, including their licenses. Check the little lock in the URL browser. If the padlock is shut, that means that the site is secure, and you’re good to move forward. Most lenders also have their contact information displayed.
This way, you can ask questions throughout the process. If you can’t find an email address or phone number, that should be a huge red flag. You can also do a quick Google search to read reviews on the lender. Better Business Bureau is a great resource to go through for this.
Think About the Amount You Need
Different types of loans come in varying price ranges. You’ll need to shop around to different lenders to find a price that works for you. After all, you don’t want to opt-in for more than you need. Some loan companies will allow you to take your loan amounts in installments.
You’ll be approved for a certain amount, but you’ll only take it out as you need it. You’ll only have to pay the interest rate for the money that you’re borrowing at the time. It’s a great option for those who are still trying to figure out how much they want to borrow. It doesn’t work as well for those who need a specific amount.
Compare Intrest Rates
Price ranges are only one thing that you need to compare. Interest rates are another beast entirely. If you’re not familiar with what an interest rate is, it’s the amount of money Plenti will charge you to take out a loan with them.
You want to shoot for the lowest interest rate possible. It will give you a lot more money in your pocket to pay off the actual loan. This option isn’t always available, however.
If your credit score isn’t the best, you can expect to pay more. We will say that all companies have different interest rates in place. Get quotes from a variety of companies and use a loan calculator to find out what you can expect.
Go Over the Fine Print With a Fine-Tooth Comb
When you get approved for a loan, the lender is going to hand you a huge paper full of terms and conditions. You want to go over these with a fine-tooth comb.
If you don’t, you may end up agreeing to something you never would normally. The document is legally binding, so once you sign it, that’s it.
The main thing you want to look out for is prepayment penalties. These are fees that you’ll have to deal with if you end up paying your loan off early.
One of the biggest reasons why people take out a personal loan is to grow their credit. If this is the case for you, go with a lender who’s going to report your payments to the credit bureaus.
Beware of Hidden Charges
Some lenders for loans like to sneak hidden charges into the agreement. These come in the form of processing fees. They may charge you for simply putting in an application.
There are orientation fees. They’ll take 1-3% out of your approval amount. You won’t have to pay the charge before they’ll give you the loan, but it’s still inconvenient.
Some companies have membership and maintenance fees that you’ll have to pay, along with strict late fees. Look for a lender that has little to no of these charges in place. You don’t want to have to deal with any expensive surprises later.
Consider the Restrictions
Before you sign on the dotted line, you’ve got to make sure that you’ll be able to use the money for what you intend to use it for. Some companies do have restrictions in place.
For example, lenders who are centered around helping people build their credit may only allow borrowers to take out money to consolidate their credit card debt or get caught up on medical bills. If you want to use the loan to relocate or pay for a wedding, you’ll have to start your search over.
Talk to Your Current Bank or Credit Union
Chances are, you already go through some type of bank. Before you try getting a loan with some other company, maybe check with them.
Their rates might not be as great as some other lenders, and they’ll have stringent approval standards, but it might be worth it if you have a good credit score.
If you don’t like the numbers that your bank is offering, you should look into the local credit unions. They often have programs in place that are a lot better than what you can get from a regular old bank.
Find a Lender That Will Work With Your Credit
A lot of lenders won’t consider working with someone unless they have perfect credit. The only ones that don’t have strict standards in this regard are the ones that are designed to help people rebuild their credit. They usually come hand in hand with a high interest rate.
If you don’t want to pay that, you’ll have to spend some time building your credit back up before you start applying for loans. If you don’t have time for that, you’ll have to either bring someone in as a co-signer or offer something up for collateral. Keep in mind that not all lenders allow for these options.
If you need to take out a personal loan for an expense and you get a pre-qualified letter in the mail, don’t toss it out. A pre-qualification means that a company did a soft credit check on you.
It doesn’t bring down your credit score, and it will give you a sneak preview of the benefits that you may receive. You can still get turned down for the loan, but it’s worth looking into.
A lot of times, you’ll get approved for something. It just might not be the amount that you were hoping to get.
Be Choosy About Where You Apply
No matter how badly you need the money, don’t apply for too many loans at once. Each time a company does a hard credit check, it will drag your score down.
It won’t be by a large amount, but it will add up if you send out ten different applications. That’s the last thing you want when you’re trying to get a loan.
Compare Criteria Requirements
Not all lenders have the same criteria requirements. There are some that concentrate on your credit score more than anything else. If it’s low, they won’t even consider you.
Others will look at additional factors like your income, age, and employment status. If you know that your score isn’t the best, do yourself a favor and seek these companies out.
Look at the Application Process
A good loan provider is going to make it as simple as possible for you to apply. They won’t ask for documents that you don’t have easy access to at home.
If you do provide everything they ask for, and there aren’t any errors, they’ll give you instant approval. If you do have any errors, they’ll reach out to you and help you correct them. In essence, look for good customer service.
Finding the Right Personal Loan Lender for You
When you need money for something big, or you want to improve your credit score, taking out a personal loan will help. It can do more harm than good if you don’t go through the right company. Finding the right personal loan lender for your needs can be tricky.
If you don’t take the time to read through the fine print, you could end up in a contract filled with hidden fees. Don’t let that happen to you! Beware of the scams and visit our blog for further financial advice.