Communicated Content – Personal loans let you borrow a certain amount of money for general purposes, be it paying off your credit card debt or funding a small business. This type of loan offers convenience, flexibility, and practicality, which attracts many borrowers.
There are plenty of personal loan options to choose from, but not all lenders offer the same terms. Some are only available to those with excellent credit scores, while others can be obtained even with bad credit.
As a borrower, the last thing you want is the wrong lender that charges high-interest rates and fees. How can you find the best personal loan or deal for you? Check out the five tips below!
Review Your Credit Report
Before you start your search, review your credit report. You can request a free copy of your credit report from all three major credit bureaus (TransUnion, Experian, and Equifax). You can get one through Annual Credit Report.com.
Your credit report is generally based on what lenders or creditors report about you. For example, they report whether you paid late or on time, the money they loaned you, and the loan balance. Your credit report also includes details from your history with past loans, like how much you borrowed, when it was repaid, and if it was ever in default.
When you request a copy of your credit report, mark down anything that looks incorrect. Check for the following errors:
- incorrect numbers
- misspelled names
- wrong balances
- closed accounts reported as open
- incorrect dates
- accounts listed multiple times
- incorrect credit limits
Then, report these red flags to the credit bureaus so they can investigate the issue. Once these errors are corrected, your credit score will experience a boost by a couple of points. The higher your credit score, the better rates you’ll be able to qualify for.
Nail Down Your Plan For Your Loan
Finding the best personal loan starts with looking at your situation. Know your loan purpose, your ideal monthly payment based on your budget, and how much you want to borrow. For example, if your goal is to refinance your credit card debt, then add up all your balances to determine how much you need to borrow.
Also, you’ll be able to compute how much you can afford each month by dividing the amount of money you borrowed by your desired interest rate. Hence, you can easily find the best personal loan because you know how you want to use it, and you’re capable of paying each month.
Research Potential Personal Loan Providers
The next step is looking for personal loan providers to help you. Many lenders are available today, from traditional banks and credit unions to online lenders. So, how can you know the best lender for you?
Consider your financial credentials. Various lenders cater to different borrowers. For example, some only work with high-credit score borrowers, while others give loans to people with bad credit (but with higher rates). Some even offer loans with less stringent qualifications, like easy online loans from CreditNinja.com. As such, review your financial situation so you can apply to lenders catering to people like you.
Then, explore your borrowing options. As mentioned, online lenders, credit unions, and banks offer personal loans. It pays to check each provider’s interest rate and monthly payment so that you’re getting the best deal possible.
Get Quotes
Once you have a few names on your list, get quotes from each lender. Since terms and rates vary significantly among lenders, it makes sense to look around before committing to a loan with any provider.
It’s worth spending an hour or two comparing rates online or over the phone rather than simply picking the first name on your list. Make sure you compare all the details, including the total interest rate, fees, and monthly payments, when deciding which loan is best for you.
Keep An Eye Out For Additional Fees
Some lenders require borrowers to pay prepayment penalties, late payment fees, origination fees, and other loan costs. While these expenses don’t seem much, they can add up if you plan to pay off your loan early or need to make a few payments before receiving your next paycheck.
It’s essential to ask about these fees when shopping for the best personal loans so that you know how much they will cost you. If one lender requires these fees and another doesn’t then go with the latter. You want to do what’s most convenient for you and save money as much as possible.
In Conclusion
The best personal loan for you comes down to how much money you need and what your financial goals are. Figure out what’s most important to you and use that as your guide when shopping for a personal loan.
Remember: don’t feel pressured into signing up for a personal loan just because the interest rate is low or the repayment term is short. You want the best deal possible!
