Choosing a loan company requires a degree of trust and confidence that the firm you hire is professional and reputable. So doing your research and checking out reviews on multiple sources is a must.
When you’re in need of emergency cash, it’s tempting to go the first loan company you come across. But you also want to make a smart choice and find the best personal loan for your situation. So where do you begin?
Personal Loans – The Basics
Personal loans are general purpose loans. You can usually use the funds at your discretion and you pay it back in fixed monthly payments. Most personal loans are “unsecured” — not backed by collateral. A secured loan is typically backed by a car or house, but you can lose the asset if you default.
Rates on personal loans are typically cheaper than those on a credit card, and much cheaper than PayDay loan rates. In fact, PayDay lenders charge fees that yield effective rates between 400% and 5,000%! The other huge downfall of Payday loans is because they require repayment the next time the customer is paid, they are usually forced to take out another payday loan to payoff the first loan thus keeping them in a perpetual payday loan cycle.
Benefits of personal loans include:
- The rate will not change for the duration of the loan
- The balance has to be paid off before another loan can be taken out
- Cash is directly deposited into your account
- Personal loans are easier to qualify for
- The payoff cycle is purposefully limited so that it is paid off in full in a shorter amount of time
- Payments do not change with the balance
Shopping the Current Marketplace
A multitude of lenders offer personal loans, and terms and conditions can vary significantly between them. Banks and credit unions tend to offer good rates, but some online lenders offer even better terms, particularly to those with good credit. Online lenders can also be more forgiving of poor credit.
To find a personal loan that’s right for you, you must first figure out what you’re looking for. As you shop around for personal loans, you’ll also want to compare offers to find the best personal loan provider. Various types of lenders have different structures and business models; which means they’ll also have distinct processes, fees, and interest rates. Try to find a personal lender that will both meet your personal loan needs and have credit requirements you satisfy.
Finally, research the credibility of each lender to ensure they’re legitimate and their customers are happy with them. The best way to do this is to read as many customer reviews as possible; the more reviews there are, the better overall picture you’ll get of the services and support they provide.
Watch Out for Scams
Watch out for fraudulent loan companies, especially if you’re shopping for a lender who approves your application with no questions asked. Avoid any lender that guarantees approval without first checking your credit or that asks you to send money—especially via wire transfer or prepaid card—to secure the loan. Also make sure your lender reports to a major credit bureau each month as you probably want to know when your activity gets reported so you can keep track of how it affects your credit scores.
Apply for the Best Personal Loan for You
Once you’ve found “the one”, the next step is to apply. You’ll fill out a full personal loan application with detailed or in-depth questions (make sure the site is protected with strict levels of security and encryption to keep your information safe). To apply you’ll need:
- Your Social Security Number
- Your address and phone number
- Income information
- Banking information
The approval process should be fast and easy. (At TLC Loans, once we receive your application, our customer service representatives will contact you to verify your income and employment, you will sign your loan agreement electronically and be all set to receive your funds.) But each lenders’ processing times will vary from 24 hours to up to two weeks. Check their website for information on their timeline for processing loan applications. You’re also free to contact the lender to check on your application.
With certain lenders you will receive your loan in your bank account on the next business day.
Overall, getting a personal loan shouldn’t be too complex. Choosing the right loan that works for you will require some research, but finding the best personal loan for you should be about meeting your unique needs without compromising your future financial health.