Personal loans aren’t as difficult to get as other loans like home loans and student loans. The process is fairly simple and takes almost no time. Moreover, you can get a personal loan for almost all your needs. The loan amount is also very flexible, making it a great alternative for other traditional loans. If you have been wanting to apply for a personal loan, here is a step-by-step guide that you can follow to get a personal loan.
Decide why you want the loan and how much money you would need Before you apply for a loan, you need to be very clear about why you are taking the loan and how much amount you would need. You can get a personal loan for anywhere between $100 to $100,000. So if you don’t have clarity on how much money you need, you might end up borrowing more money than you need and overspending.
For example, if you are taking a personal loan to cover the expenses of a wedding, you have to take into account all the places where you would need to spend money. Flowers, food, guests, a wedding dress, location, etc. Calculate the total amount of money that the wedding will cost you. Next, check your accounts to see how much money you already have out of the total amount that you need. This will give you a perfect number. Apply for that specific amount.
Check your credit scores
Credit scores are the most important aspect that decides whether your loan will get approved or not. Since most personal loans may or may not ask for collateral, your credit score is the main determinant that helps the bank decide whether you qualify for a loan or not. Before you apply for a personal loan, get your credit reports updated from major credit reporting agencies. Most credit reporting companies allow you to obtain a free credit report once a year. It is advisable to get your credit report before applying for a personal loan.
Unlike in the case of payday loans, your credit score will necessarily have to be good in order for your loan to be approved.
Decide where you want to get a loan from
There are many places where you can get a personal loan. Check all the available options and then shortlist the ones that suit your needs and requirements. You can either get personal loans from banks and credit unions or through non-banking financial institutions. You can always get a loan from personalandpaydayloansonline.com online at any time.
If you decide to apply for a personal loan at a bank or a credit union, you would most likely have to go to the physical location of the institution and meet the official people face to face to get your loan approved. The loan officer can guide you through the entire process. One thing you should keep in mind before applying for a loan at a bank is that the loan qualification standards of banks are generally higher than those of credit unions or non-banking financial institutions. However, if you are already a customer of the said bank, then you might get some relaxation. The qualification standards of credit unions are generally less rigid and therefore the chances of your loan being approved are higher.
Non-banking financial institutions is an umbrella term that takes under it online financial companies, physical financial companies, payday lenders, insurance companies, and other non-bank institutions. The interest rates at these institutions might be higher than those of banks and credit unions. But if you are having difficulties in getting your loan approved in banks and credit unions, you can get it easily approved in these non-banking institutions. The process is as easy as getting payday loans passed.
Try finding the lowest loan rates
It is better to start your search early so that you have enough time to look around, see your options and then settle on the option that suits you best. If you already have an account with a bank, then you should try going there first, as they might give you some relaxation on the qualification and also on the interest rate. Spend some time in the research process to land the best deal available.
Pick the best deal and apply
Once you have done your research, decide on the loan amount and start the application process. Depending on which lender you choose, you would either need to go to the physical location or complete the application process online. Talk to your lender or loan officer to know what documents you will need for the application process. This varies from bank to bank and lender to lender, so make sure to confirm the details before going for the application process.
Providing the documents and getting the loan approved
Once you have completed the application process, you need to provide the documentation that your lender asks for. In personal loans, the document requirement is very basic and you would not really need to go anywhere in search of documents.
Once the documentation is completed, and your loan has been approved you should read the terms and conditions very carefully before accepting the loan. Make sure that you know every detail related to your loan before accepting it.
After you approve and accept the loan, you should get the loan funds into your account within a week. However, check with your lender to see how long it would take for the loan funds to reflect in your account.
The entire process is pretty simple and you should be able to access your funds in a week at most. Make sure you have a proper repayment plan in place so that you don’t default on payment. A timely repayment can increase your credit score, which in turn can take your interest rates down. If you plan a personal loan well, you can get all your work done without burning a hole in your pocket. Be careful with choosing a lender and check everything twice.