How To Get a Personal Loan: Tips and Tricks

Financial hardship can affect anyone of any age, gender, or background. When your bank accounts are running dry, and you’re low on cash to spend toward rent, a mortgage, or groceries, things can seem bleak.

But there are a wide variety of loans available that may help you make it through such hardships. A personal loan, for example, is designed for immediate personal use and may be enough to make ends meet.

What Are Personal Loans?

There’s a good chance that you’ve heard of at least a few types of loans. Student loans have long been a topic of discussion, and auto loan offers can be found in nearly every mailbox throughout the US.

But personal loans are a little different. Instead of being tied to specific items (such as tuition or an automotive payment), they’re open to the borrower’s specific spending needs.

As such, a person who receives a personal loan of $1,000 can choose to spend those funds in whatever way they see fit. Of course, as with any other loan, there are often interest rates and payment plans to consider.

Additionally, personal loans might not be available to everyone. Individuals with poor credit, a long history of unemployment, or massive amounts of debt may struggle to get approval for a personal loan.

That said, such individuals can find a worthwhile and workable personal loan. But it helps to get familiar with the loan process to increase your chances of success.

How Can You Get a Personal Loan?

To get a personal loan, you’ll need to find a lender and apply for a personal loan. Of course, choosing a lender and loan plan can be complicated. For example, several factors can impact your ability to get a personal loan.

Some of the most significant things that can influence your ability to receive a personal loan include:

  • Employment Status
  • Current Debts
  • Credit Rating

Individuals who are employed have a better chance of paying back a loan. As such, lenders tend to offer personal loans to employed individuals more quickly and easily than those who are unemployed.

Debt can also have a significant impact on your ability to secure a loan. Individuals with more debt than earning potential can struggle to find and secure a loan, especially a personal loan.

And, of course, credit rating also comes into play. Whether you have a short credit history or bad credit, lenders may decide to offer fewer loan options if your score is lower than 650.

Understanding how personal loans work is crucial when attempting to secure one. But if you’re new to the concept of personal loans, it can be challenging to wrap your head around everything at once.

Fortunately, there are several tools you could use to help you better understand how the personal loan process works. One of the most notable of these tools is a personal loan calculator.

Using a Personal Loan Calculator

If you’ve never used a personal loan calculator before, now is a perfect time to start. A simple loan calculator could help you determine your maximum loan amount and potential interest rate range.

This information is essential in helping you choose the best possible personal loan. After all, if you’re not aware that you could get up to $15,000 and a low APR of 5%, you could easily be duped into choosing a low-quality loan.

To use a personal loan calculator, you’ll need to have a good idea of your current credit rating. It’s also worthwhile to check your current debts. After inputting this info, you’ll be able to see a variety of loan options and offers.

Some loan calculators are designed to help you figure out your maximum monthly payment after receiving a loan. These can be fantastically helpful when attempting to budget for loan repayments.

As you might expect, those with poor credit or lots of debt might face higher monthly payments. Luckily, there are personal loans that can help individuals with bad credit.

Are There Personal Loans for Bad Credit?

There are quite a few personal loans available to those with bad credit. If your credit isn’t in great shape or you have a brief credit history, you may want to visit your bank.

While online lenders are plentiful, your personal bank may be able to offer the best possible personal loan options if your credit is lackluster. This is especially true of individuals with long banking histories.

Even if online lenders reject your applications, your personal local bank might be able to help you out. That’s because they’ll have a full history of your transactions, allowing them to judge your ability to pay back a loan.

Of course, if you have a long history of bounced checks, overdrafts, and empty accounts, your bank might not be the best option. Still, there are a few online lenders that specifically work with individuals with bad credit.

That said, some lenders impose outrageous personal loan rates, especially when low credit is involved. You’ll want to stay up-to-date with interest rates to avoid being charged insane amounts of interest on your loan.

What Are the Best Personal Loan Rates?

The best personal loan rates vary from person to person. That’s because a lender’s offers change depending on your credit history, current employment status, and level of debt.

The longer your credit history and the lower your current debt, the more lucrative the rates are bound to be. And if you’ve been gainfully employed for multiple years, you might also find lower loan rates.

That said, most personal loans have interest rates that vary between 4.49% APR and 35.99% APR. If your lender is suggesting a much higher interest rate, it’s probably better to keep looking.

Can You Find Personal Loans Online?

One of the best ways to find personal loans is by searching online. By choosing safe and trustworthy online lenders, you can minimize safety concerns and maximize your chance of getting accepted for a loan.

Some of the most popular and well-trusted online personal loan lenders include:

  • Upstart
  • Upgrade
  • Avant
  • Payoff

Still, the minimum credit score for each of these lenders differs. Before starting an application with any lender, you’ll want to ensure that their offers are well suited to your status.

For example, Payoff is one of the most highly-rated online personal loan lenders. However, they typically only offer personal loans to borrowers with credit scores of 640 or above.

Alternatively, you might end up waiting a little longer to get a personal loan acceptance letter from Upstart. But they work with individuals with lower credit scores, about 580 or more. 

Because loan applications can temporarily affect your credit score, it’s crucial to be picky when applying with multiple lenders. In fact, unless you have exceptional credit, it’s often best to choose a single online lender and apply.

Things To Watch For When Choosing a Personal Loan

Though we’ve mentioned a few issues you’ll want to watch for when choosing a loan, it’s essential to touch on a few of the more significant problems. Otherwise, you could end in more financial trouble than before.

Predatory personal loans are plentiful, and it’s only too easy to wind up with one accidentally. Some lenders only offer personal loans to those with the lowest credit scores, which can seem like a blessing.

But when your APR is 299%, a $1,000 loan could end, costing you more than $2,000 in interest payments. And while that percentage might seem hyperbolic, it’s not. Several lenders hike up the interest for bad credit loans.

Avoiding these situations can be challenging, especially if you’re in immediate need of personal funds. But it’s vital to remember that a personal loan can do more harm than good if the monthly payments are too high.

Remember, when choosing a personal loan, always opt for the lender with the best reputation and lowest rates. That way, you can maximize your chances of paying back the loan on time.

Find the Best Personal Loans Today

When it comes to personal loans, you don’t need to explicitly state what you’ll spend your loan funds on. That’s partially why they’re called personal loans! Of course, these loans can be a little tricky to secure.

Be sure to use a personal loan calculator to figure your maximum potential loan amount and interest rate. Remember, bad credit isn’t an automatic rejection. There are plenty of personal loans designed for folks in need!

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