There always comes a time when you are so down financially and don’t know where you can get some cash to even help push you to your next salary is due. This is the time you start thinking about some of the places you can get a loan.
This article provides the best guide you can follow to get the best personal loan this 2018.
1. What is a personal loan?
These are predetermined amounts of money which you can acquire through any lender like a credit union, private lender, bank, or trust company. Once you find a suitable lender, you go through the approval process. If your application gets approved, then you will be granted your personal Lendgreen loan.
2. Secured vs. unsecured loans
Unsecured loans are those types of loans that don’t have collaterals attached to them, only the money is involved. Meaning, with this debt, you will be charged some penalty if you miss of delay with regular repayments and your interest rates are also going to go higher.
Secured loans are the ones that have collateral attached to them. They involve huge sums of money and in such cases, the lenders need to have some reassurance that you will repay the loan by you, the borrower, pledging an asset of yours, usually a house or car which is of almost similar value with the loan.
3. Why do all the application processes look alike?
Every lender’s process of handing you a loan is different especially when it comes to the potential borrower’s creditworthiness. This is the borrower’s financial strength and the likelihood of making regular repayments of the loans. If your creditworthiness is low, then you stand a much lower chance of getting approval for a loan. And the people with high creditworthiness have higher loan approval chances.
4. What are the regular payments like?
This depends on what you and your lender agreed upon on the payment schedule. These payment schedules are usually in options from monthly, weekly, and even bi-weekly.
5. The interest rates
This is the extra amount added to your overall loan which you have to repay. It is a process by which your lender can profit by lending you the money when you needed it. The interest rates vary from one lender to another and also on how your credit score is plus the amount you are borrowing.
6. Fixed vs variable rates
In the fixed rates, your interest rates are calculated in advance which you have to pay on top of the regular loan if approved. They don’t increase or decrease no matter the situation.
The variable rates, however, fluctuate depending on the current market premium, also prime rate. It can sometimes be beneficial when the prime rate goes down or daunting when it goes up making you have to pay higher rates.
7. How does your credit score affect your interest rate?
Good credit scores act as assurances to the lenders that you have a high affinity of paying back the loan and on time while a poor credit score only shows that you either take loans and fail to repay them or make late repayments. So, the guys with good credit scores are the ones who are going to have lower interest rates to their loans and the ones with poor scores, well, their rates will be high.
8. How will your credit report affect your chances of getting a personal loan?
Your credit report is like your credit crore report card. Think of it that way. The more irresponsible you are with your debts, the poorer your credit report will be and less chance you will have of getting a loan. If you have a good credit report, however, you stand a chance of getting a personal loan very fast and at incredibly low rates too.
9. How can you be responsible for your personal loan?
As long as you’re responsible and manage the personal loan wisely, you can benefit a lot from it. Make all your repayments on time and to the full amount as well to maintain a good relationship with the lender.
