Personal

How to Shop Around for a Personal Loan

12/23/19 Ricky Baizas

It’s a scenario many people face every day: they need fast cash for unexpected expenses or bills that are quickly coming up. However, their bank accounts are running on empty, and they are on the verge of overdrawing, resulting in extra charges. When you need cash soon, you don’t have to suffer the indignity of borrowing money from family members or take out a pay day loan. You could apply for a personal loan, giving you access to the cash you need when you need it.*

 

Before applying, be aware that not all personal loan lenders are the same. They often have different application processes and criteria, which could affect your chances for approval for a loan. They could also have various personal loan offers, so it’s your job to do your research and find out which one is right for you.

 

Here are four ways to shop around for a personal loan:

1. Check the qualification and document requirements.

As some lenders have various criteria for approval, consider whether you are in good standing to obtain new credit. Lenders will usually ask for several documents, often in the form of proof of employment, bank account and credit information.

2. Research interest rates and repayment terms.

Like other installment loans, such as mortgages, it’s important to shop around for loans by looking at their interest rates before accepting an offer. In addition to interest rates, ask about lenders’ repayment terms. Although some lenders will want to have their money back right away, others will allow you to repay the funds in monthly installments, which is easier to incorporate into your existing budget.

3. Find out the length of the application process.

If you need money because a bill is approaching, the speed of the application process makes a big difference. Consider the start-to-finish time for gathering the appropriate documents, applying for the loan, processing your application and receiving the funds in your bank account. The longer it takes the application to process, the less time you have to meet your bill due dates. Some lenders take a long time before they finally deposit your money, others can process your application fast.

4. If a credit check is involved, determine which bureau is being used and if it will be heavily weighted for approval.

It’s quite common for different credit bureaus to have different credit scores for the same borrower. Which means it can be advantageous to know your FICO scores for each of the bureaus. This way you can base which lender to use on the bureau that features your highest score.

 

At the same time there’s more that goes into the selection of a lender than which bureau they use. Some could ask to check your credit score, which will likely result in an inquiry on your credit report. Although this is to ensure that you meet their qualification standards, such an inquiry can lower credit scores. Credit score provider FICO noted that accruing a certain number of recent inquiries can drop your score. Keep in mind those personal loan providers tend to have strict credit requirements that could prevent you from being approved. Yes, that means your credit could be lowered by their check and in the end for all of that trouble — no loan for you. The good news is: Lenders like LoanMe specialize in working with borrowers who may have weak credit reports to get them approved.

 

Apply for a personal loan with LoanMe.

 

While shopping around for loans, you know speed is a factor. To help you make payments on time, LoanMe offers unsecured personal loans. The application process takes minutes, you need just three documents to apply and you can receive money deposited into your bank account in as fast as one day.

 

Contact LoanMe to apply online or over the phone today.

 

Sources

http://www.myfico.com/crediteducation/questions/inquiry-credit-score.aspx

https://www.loanme.com/personal/howitworks

 


*This article has been prepared for general information purposes only. The information presented is not legal, financial, tax or accounting advice, is not to be acted on as such, and is subject to change without notice.
 
Credit approval is subject to LoanMe’s credit standards, and actual terms (including actual loan amount) may vary by applicant. LoanMe requires certain supporting documentation with each new application. If you have any questions regarding this, call us at 844-311–2274. California loans are made pursuant to LoanMe’s California Department of Business Oversight Finance Lenders Law License #603K061. LoanMe also offers loans in certain other states which may have higher minimum loan amounts.
 
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