By George Reed on April 17th, 2019
There may be situations in life when you can’t cope with the new unforeseen expenses and urgently feel the need to get a helping financial hand. Some people need to cover urgent medical bills while others want to borrow some money for a long-awaited vacation or fund their startup. Do you know how many people take out personal loans annually? According to recent research, almost half of US citizens have taken a small personal loan in the past year. No matter what your particular reason for taking out a personal loan is, here are some expert tips on how to find a really good and reliable personal loan and solve your temporary financial difficulties.
What Is the Best Way to Get a Personal Loan?
Gone are the days when borrowers had to stand in the long queues with a pile of documents in an attempt to get a loan from a traditional bank. This is still a good lending option but if you have bad credit, chances are that your application will be rejected. While large finance-related service providers aren’t eager to deal with high-risk borrowers, there are other facilities when you can receive the necessary financial help.
Payday loans have recently become very popular. This isn’t surprising as not so many lending institutions want to give out a loan with bad credit. Of course, the situations may be different and often there is no time to improve your score. In this case, turning to an online lending facility can save your time and help you get some extra cash right away without any tedious paperwork and hassle. It’s so convenient to submit a quick online loan request form and receive the money as soon as the next business day.
Go to the Local Bank or Credit Union
This option works best for people who don’t have a financial emergency and can wait for a few weeks until their application is approved. Also, you will need to boost your credit score first if you want to increase your chances of getting approved or if your credit score is far from excellent. Traditional banks and credit unions may offer a bit lower interest rates but only in case your score is high enough. Don’t believe if somebody tells you they give out loans with no credit. This is definitely false information that may lead to lots of trouble.
Borrowers may opt for secured as well as unsecured personal loans from a bank. Typically, a secured loan should be backed with any type of collateral while an unsecured one is more popular among borrowers. On the other hand, unsecured loans are considered to be high-risk so they often come with higher interest rates and stricter requirements.
Use a Credit Card
Many people don’t think about credit cards as a type of loans, but this is really another kind of a personal loan. If you have an excellent or good credit score and just need a certain amount of money to improve your personal finances, you may apply for a credit card. However, keep in mind that credit cards usually have quite high interest rates, so experts suggest taking out a new card that has an introductory interest-free period if you want to save some money.
Compare Loan Terms
No matter which lending solution you find the most suitable for your particular situation, make sure you shop around and compare the loan terms and rates in order to find the most affordable option. This is especially relevant for people who have bad credit and don’t want to sign a contract with too high-interest rates. Also, don’t take more than you are sure you will be able to pay off. This easy technique will help you stay on top of your financial situation and improve your score over time. Pay attention to:
- Loan repayment period: this is the time period in which a borrower needs to pay the debt off. Generally, you will have to make regular payments with a set amount of money. Remember that the shorter your repayment period is, the lower interest you will most likely pay.
- APR (annual percentage rate): this is the total sum you will pay off including the fees, the interest rate and the loan itself. The loan with the lower APR is more affordable as it will cost you less over time.
- Loan minimum or maximum: some lenders determine strict sums of money that are the loan minimum and maximum they are going to lend. If you don’t want to borrow more than you actually need, go ahead and select the lender who lets you choose the amount you need.
Find the most suitable lending solution for you and get your temporary financial issues solved by professionals.