What Is a Personal Loan?

A personal loan is a flexible loan that you can use for a wide variety of purposes. Unlike loans designed for a specific thing, like a mortgage or auto loan, a personal loan can be used for nearly any legal purpose.

There are different types of personal loans. One of the most basic distinctions is between secured and unsecured personal loans.

Learn more: Dive into the latest personal loan statistics for 2024, including rates, debt levels, and borrower trends in our comprehensive overview.

Unsecured Personal Loan

Unsecured personal loans are one of the most common types of personal loans, and most personal loans you see advertised will fall into this category.

An unsecured personal loan doesn’t require any collateral. The lender offers the loan based purely on your credit history, financial situation, and a promise that you’ll repay the loan. This contrasts with secured loans, like mortgages, where an asset serves as collateral for the loan.

The obvious benefit of unsecured personal loans is that you don’t need to have anything of value to offer as collateral. You also don’t have to go through the process of letting the lender examine your collateral and make sure it’s worth enough to secure your loan, which can speed up the lending process.

However, because there’s no collateral, lenders are more choosey about offering these loans. You’ll need strong credit to qualify for these loans, and your interest rate will be higher than it would be with a secured loan.

Learn more: Find out exactly what documents and information you need to apply for a personal loan with our comprehensive guide.

Secured Personal Loan

Secured personal loans are the opposite of unsecured personal loans. When you apply for one of these loans, you need to offer a form of collateral.

Many lenders will accept a Certificate of Deposit (CD) or savings account balance as collateral for these loans. For example, if you have $5,000 in a CD at a bank, that bank may be willing to offer you a secured loan. The size of the loan that you can qualify for will depend on the value of your collateral and your credit score.

Learn more: Our detailed analysis answers the question: Is getting a personal loan a good idea for you? Find out now.

Because you’re offering collateral to secure the loan, secured personal loans are generally easier to qualify for. Many lenders will also offer lower interest rates on these loans because of the reduced risk that they face.

A major drawback of secured personal loans is the fact that you need to have something of worth to serve as collateral. If you’re in need of a loan, odds are good that you don’t have much savings available and might not have enough to serve as collateral.

Offering something as collateral also puts it at risk. If you’re not able to make payments on your loan, the lender could take possession of the collateral.

It may also take longer to get a secured loan because the lender has to assess your collateral and ensure it’s worth enough to secure the debt.

Learn more: Explore our expert picks for the best personal loans for excellent credit, tailored to maximize your financial options.

Branded Personal Loans

If you’re shopping for personal loans, you may find that some lenders offer specialized or branded personal loans. For example, you may see loans described as vacation loans, home renovation loans, or debt consolidation loans.

These loans are advertised as special types of personal loans for a specific purpose. Some of these loans may offer special features related to their branded purpose. For example, if you apply for a debt consolidation loan the lender may pay your other creditors directly, so you don’t need to handle the money at all.

Keep in mind that personal loans are highly flexible. You can use a personal loan for almost any purpose; the few that are disallowed by most lenders are things such as paying for education, gambling, or illegal activities.

Some branded personal loans may be a good deal. You might find a debt consolidation personal loan that can help you save a lot of money. However, just because a loan is described as being good for a specific purpose does not mean that it is the best loan available. Always shop around and consider generic personal loans before going for a branded one to make sure that you’re getting the best deal.

Bad Credit or No Credit Check Personal Loans

Another common thing to see when looking for personal loans is a loan advertised as a bad credit or no credit check personal loan. These may seem appealing, especially If you don’t have a great credit score or have struggled to get approved for loans in the past.

As with anything, you pay a price for these types of loans. Lenders who are willing to offer loans to people with poor credit or without checking people’s credit need to compensate for that risk somehow. Often, they compensate for that risk with highly unfavorable terms such as high interest rates or large origination fees.

If you need a personal loan, but don’t have good credit You should still avoid these loans due to their predatory terms. You’ll get a much better deal if you are able to qualify for a secured personal loan. If you don’t have enough assets to serve as collateral, you are likely to be better off if you spend some time working to improve your credit and apply for a traditional personal loan instead.

Learn more: Learn the step-by-step process of securing a personal loan with a co-signer in our comprehensive guide.

Payday Loans

A payday loan is a type of bad credit or no credit check loan. They share some characteristics with personal loans, but it is important to know that payday loans are highly predatory and should be avoided whenever possible.

Like bad credit or no credit check personal loans, payday lenders typically don’t look at your credit score when you apply for a payday loan. These loans have massive fees High interest rates and short repayment periods. For example, if you get a payday loan today, you might be expected to pay it off in 2 weeks. The idea is that you use the loan to make it the next payday and use your next paycheck to pay back the balance.

Payday loans typically come from specialized lenders, so if you look for loans from reputable Banks and online lenders, you are not likely to find them. Their high fees and interest rates can make it easy to get trapped in a cycle of debt, so try to avoid these loans except as a very last resort

Learn more: Unlock financial opportunities with our recommendations on the best personal loans for good credit and fair credit, designed to match your credit profile.

Other Types of Consumer Loans

Personal loans are a type of consumer loan, which is a wide category of loans that describes pretty much any type of loan that a regular person could apply for. Some examples include personal loans, mortgages, auto loans, and credit cards.

When looking to borrow money, it’s important to make sure that you’re applying for the right type of loan. Some types of purchases, such as a home or a car, have unique loan types designed specifically for those purchases. Trying to use a credit card or a personal loan will likely result in you paying more than if you used a specially designed loan.

Personal Lines of Credit

Personal lines of credit are similar to personal loans in many ways. Like personal loans, they’re highly flexible and can be used for many different purposes. They can also come in both secured and unsecured varieties.

What makes them different is that a line of credit is a pool of funds that you can draw from multiple times while a loan is a lump sum of cash that you can only access once.

That makes personal lines of credit more useful for people who have unpredictable financial needs. If you have a one-time expense and you know the size of that expense, you can apply for a personal loan for the correct amount. With a personal line of credit, you can take money out of the line of credit when the need arises and do so multiple times if you find that you need to draw money more than once.

For example, a personal loan might be a good fit if you have to pay an unexpected bill. A personal line of credit might be a better fit for someone working on a home improvement project who isn’t sure exactly how much it will cost.

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Common Uses for Personal Loans

Personal loans can be used for many different reasons.

One of the most common reasons is for debt consolidation. If you have multiple credit card balances and other small loans, you can use one personal loan to pay off those balances. That leaves you with a single monthly payment to make and may reduce the amount of interest you pay.

Home renovations and vehicle repairs are also common uses for personal loans.

You can also use a personal loan for unexpected expenses. Because they have lower interest rates and credit cards tend to, using a personal loan in this way may help you save money.

Many people use personal loans for weddings, vacations, and similar costs. Be careful: you’ll be paying off that loan long after the party or the trip is over!

Learn more: Learn how to protect yourself from personal loan scams by recognizing the warning signs in our latest guide.

Bottom Line

Personal loans are highly flexible loans that you can use for a variety of purposes. There are many types of personal loans, but they all offer money that can be used for a range of personal needs.

If you need money for something, applying for a personal loan can be one way to get that cash. Just keep in mind that you will be paying that loan back with interest. It’s best to use these loans for essentials, not luxuries, and to avoid borrowing if your credit isn’t up to par!

The post Types of Personal Loan: A Comprehensive Guide appeared first on FinMasters.

A credit score between 300 and 579 is considered poor, making it tough to find a willing lender. While options like payday loans or title loans might seem tempting due to their lack of credit checks, they’re usually not advisable due to exorbitant interest rates, sometimes exceeding 300% annually, and hefty fees.

Don’t lose hope. Obtaining a personal loan with bad credit is possible. Some lenders don’t require a minimum credit score, though they might need proof of employment and sufficient income. The terms won’t be ideal, but they’re certainly more favorable than what payday lenders offer.

Best Personal Loans for Bad Credit

It’s not easy to get a personal loan with bad credit. You’ll have to try several lenders, and there’s no guarantee that any will approve your application.

Your Credit Union or Bank

Many borrowers overlook this possibility. If you’re a regular customer at a local credit union or bank you may be able to get a loan even with bad credit. They have your financial information and they are in a position to assess your cash flow. You can often have a face-to-face conversation with someone who can make a decision.

Some local banks and credit unions have loan products specifically designed to help customers avoid using payday loans. It’s always worth asking.

Online Lenders

Your credit score will close you out of most online lending options, but there are still a few possibilities.

Prequalify for a Personal Loan

Check your personal loan rates by answering a few questions. It only takes two minutes and has no impact on your credit score.

Get Started

OneMain Financial

OneMain Financial makes personal loans of $20,000 and below. Instead of a credit check, they use an “ability to pay evaluation” which considers income, employment history, and other factors.

Possible Finance

Possible Finance makes small loans, up to $500, without a credit check. They advertise these as an alternative to payday loans. Loan terms are longer than payday lenders offer and your payments are reported to credit bureaus, helping you improve your credit score.

It’s also worth checking your area for local and regional lenders who are willing to work with borrowers who have bad credit.

Loan Matching Services for Bad Credit

Loan matching services do not lend money. They are brokers that pass your details on to multiple lenders to see what offers you can get. There are a number of loan matching services that serve borrowers with bad credit.

Most of these companies have online complaints, ranging from reports of numerous calls and emails from lenders to customer service issues to claims that personal information was not properly secured. Check the service carefully and be alert for signs of trouble.

Some loan matching services to consider:

Bankrate

Bankrate can help you match with lenders whose rates are no greater than 35.99% APR* with terms from 6 to 84 months.

PersonalLoans.com

PersonalLoans.com is both a loan matching company and a peer-to-peer lending platform. There’s no stated minimum credit score.

Upstart

Upstart is a highly rated loan marketplace handling loans up to $50,000. The minimum credit score is 300. They consider education and other non-traditional data in lending decisions, so they are a great choice if you have a thin credit file.

AmOne

AmOne will lend as much as $50,000. Interest rates range from 3.99% to 35.99%*. AmOne says they will lend to borrowers with any credit score.

LendingClub

LendingClub used to be a peer-to-peer loan service. It is now a loan matching service. Interest rates may reach 35.99%*, with origination fees up to 6%. The maximum loan is $40,000. Their website does not list a minimum credit score.

Check rates via Credible.com

CashUSA

CashUSA does not have a minimum credit score. Borrowers must earn a minimum of $1000/month post-tax and have an active checking account. Loans are up to $10,000, rates are up to 35.99*%.

BadCreditLoans.com

BadCreditLoans.com handles loans up to to $10,000. Rates are up to 35.99%*. They do not list a minimum credit score but they require evidence of a steady income.

These services specialize in bad credit loans. They will still have other criteria, and you cannot be certain that they will approve your application. They are still a good place to start!

What to Expect

Looking for a personal loan with bad credit is not going to be a picnic, but you probably knew that already. Here’s what’s in store.

• Expect to be turned down. It is not easy to find a lender that makes personal loans to borrowers with bad credit. Some of your applications are likely to be rejected.
• Expect to pay. Personal loans are expensive for borrowers with bad credit. Interest rates range up to 35%, and you may also pay a substantial origination fee.
• You may deal with sketchy lenders. The bad credit loan marketplace attracts vultures who prey on desperate borrowers. Always look for independent reviews of a lender’s business record.

How to Prepare

Getting a personal loan with bad credit will be easier if you consider these factors.

• Why do you need the money? You’ll be paying a very high interest rate. Unless it’s essential, you might be better off not borrowing. Using a personal loan for debt consolidation is not worth it if the interest on your loan is higher than the interest on the debts you’re consolidating.
• What’s your credit score? Always check. Remember that your lender will use a FICO score and your free credit score provider will probably use VantageScore. They can be different.
• What’s in your credit report? Knowing where you stand is a good start. Get your credit reports and review them carefully. Check our guide to understanding your credit report.
• Are there errors on your credit report? Errors can harm credit scores. If entries on your credit report seem suspicious, use the dispute process to challenge the errors.
• Would credit repair help? The credit repair industry has earned a shaky reputation. There are still companies that are legit and may be able to help you boost your score. Start by understanding the credit repair process and look into legitimate credit repair companies.
• What do you have going for you? Do you have a steady job with a decent income? Any assets? Have you made your rent and utility payments on time? Some lenders will consider these items.
• What are your options? Make a list of lenders that might consider your application. The possibilities we list below will give you a start.
• Plan your applications. File all your applications within a 15-day period. Credit bureaus will see that you are shopping for a deal and will record only one hard inquiry. That will help you avoid hurting your score.

What to Do Next

Hopefully, that list will help you solve your immediate problem and find a personal loan for bad credit. Once you’re past that hurdle you’ll probably want to consider another challenge: improving your credit so you have more options next time you need to borrow.

That may sound like an insurmountable problem, but part of the solution is right in front of you. Start by making the payments on your new personal loan on time, every time. That will move your score in the right direction.

That’s step one. For other practical ways to improve your credit, check out our guide on how to rebuild credit.

Personal loans for bad credit are not easy to get. It will take effort, it will be expensive, and you may deal with lenders you’d rather avoid. Those are the penalties we pay for having bad credit, and there’s no way to get around them. You may still be able to get the loan you need, and the experience can motivate you to change your credit for the better!

The post The Best Personal Loans for Bad Credit of February 2024 appeared first on FinMasters.

What to Expect

Very good to excellent credit means two things in your search for a personal loan.

• Easy approval. Lenders will roll out the red carpet and compete for the privilege of lending to you.
• Low interest rates. You’ll get the lowest rates available.

How much lower are interest rates for borrowers with excellent credit? Let’s take a look.

That chart shows us two things.

• Interest rates on personal loans are falling.
• Borrowers with credit scores of 760 and above are getting the best rates.

If you’re one of those borrowers, that’s good news!

Prequalify for a Personal Loan

Check your personal loan rates by answering a few questions. It only takes two minutes and has no impact on your credit score.

Get Started

Best Personal Loans for Excellent Credit

If you’re looking for a personal loan with excellent credit you’ll have lots of options. You’ll still want to choose the best one! Choosing the best options is probably part of why you have such good credit in the first place.

There are three keys to getting the best deal on a personal loan (or any loan).

• Look in more than one place. Borrowers who solicit multiple offers get better deals.
• Compare offers and read the fine print.
• Clarify your goals and pick the deal that best fits your personal needs.

Remember that the best deal for one person is not always the best deal for another!

Here are some places to start looking.

1. Your Own Bank or Credit Union

It’s still always worth looking close to home. You can do that by asking your own bank or credit union for a quote. They know you, they know your finances, and you can often talk directly to decision-makers. You’ll get better and more personal service than you would from an online loan factory.

It may not be the best quote you get, but it’s worth considering.

2. Online Lenders

Good to excellent credit will get you the best rates from the most selective online lenders. If you prefer to deal directly with a lender, try these options:

Sofi

SoFi is a popular student lender that has expanded to handle other loan types. They handle personal loans up to $100,000 with APRs down to 8.99%*.

Check rates via Credible.com

LightStream

Lightstream makes loans from $5000 to $100,000. They have a broad range of loan products with fast approval and fund release. The lowest APR is 7.49%*.

Check rates via Credible.com

Happy Money

Happy Money loans are designed for consolidating credit card debt and can only be used for that purpose. Loans are up to $40,000 and the lowest APR is 11.72%*.

All of these lenders will be happy to deal with borrowers who have very good to excellent credit. Apply to several and see what deals come your way!

Remember to make your applications within a 15-day window to avoid registering multiple hard inquiries. You don’t want to dent that score!

3. Loan Matching Services

Many borrowers choose to work through loan matching services. These are not lenders, but brokers who pass your details on to their own network of lenders. It’s a way to get multiple quotes from a single application, which makes comparison shopping easy.

Some matching services, especially those serving borrowers with poor credit, have bad reputations. With excellent credit, you’ll be dealing with the top-tier companies, and you shouldn’t have those issues. It still pays to run some searches on any company you’re considering using.

Here are some top loan matching services for borrowers with excellent credit.

Credible

Credible is a well-reviewed broker handling loans up to $200,000. The lowest advertised interest rate starts at 6.4% fixed APR* (with autopay), and they guarantee that they’ll find you the best available rate.

*See Terms

Bankrate

Bankrate can help you match with lenders whose rates are no greater than 35.99% APR* with terms from 6 months to 84 months. Close with a better rate than you prequalify for on Credible and get a $200 gift card.

LendingTree

LendingTree is one of the largest and best-known loan matching services. They represent lenders making loans up to $200,000 with rates as low as 6.99%*.

LendingClub

LendingClub lenders handle loans up to $40,000. the lowest advertised APR is 9.57%*.

Check rates via Credible.com

The lowest APRs from these lenders are reserved for the borrowers with the very best credit. If your credit is excellent it makes sense to work with services with the lowest advertised rates. Lenders may also consider other factors, like your income, employment history, and debt-to-income ratio.

What to Do Next

Personal loans for excellent credit are easy to get. You’ll be approved with no problems, and you’ll be offered excellent terms. If you’re at the lower end of this range, you may not get the very best terms, but you’ll still be well above those with lower scores.

Of course, you’ll want to keep that score where it is. That means making every payment on that personal loan on time! Keep an eye on your credit report, watch for errors and signs of identity theft, and enjoy the privileges you’ve earned!

The post The Best Personal Loans of February 2024 appeared first on FinMasters.

Prequalify for a Personal Loan

Check your personal loan rates by answering a few questions. It only takes two minutes and has no impact on your credit score.

Get Started

Who Is BadCreditLoans.com?

BadCreditLoans.com started in 1998 by bringing together traditional lenders, peer-to-peer lending networks and tribal loans (from Native American Indian Funds). 

Today, they have grown to offer personal and installment loans across the United States to all credit types.  

They are not an actual lender but provide the platform for borrowers with bad credit or good to find the best rates by receiving multiple offers from different banks or lenders.

They offer traditional personal loans, personal installment loans, and peer-to-peer loans which may be funded by individuals or companies.

What Makes Them Different?

BadCreditLoans is unique in that it offers a robust platform for peer-to-peer borrowing and access to tribal loans. 

Tribal loans offer the opportunity for people who are self-employed or have a varied credit history to qualify for personal loans that they may not qualify for with a traditional lender.

Keep in mind that tribal loans are funded from sovereign native American lands and do not always have to meet state APR maximums.

They have relationships with a wide variety of banks and lenders which allows them to offer personal loans to people with bad credit, no credit, or limited credit.

Even if you have bankruptcies, repossessions, and judgments, BadCreditLoans may have a lender willing to lend money.

They also offer you the ability to apply and complete the entire loan process from your mobile phone on their BadCreditLoans app. 

How Does BadCreditLoans Work?

BadCreditLoans have one of the easiest platforms to use and it only takes about 30 seconds to find your best rate. Here’s how it works:

1. Find Your Rate

The first thing you do is go to their website and fill out the short form on their home page. It takes about 1 – 2 minutes to enter your information.

You need to provide basic information and financial income, as well as the amount of the personal loan you are looking to apply for.

BadCreditLoans.com doesn’t check your credit score to get lender offers, they only do a soft credit check. This means you get to see what rates you can qualify for without the worry of it affecting your credit. 

2. Compare Your Options

Once you put your information in and submit the form you will be taken to a dashboard.

This dashboard will have multiple pre-approval offers from different lenders.

Keep in mind, these are Pre-Approvals and your actual approval is not guaranteed; however, you will get to see your actual pre-qualified rates. The rates you see are usually very accurate as long as you can verify your information and nothing changes on your credit report. 

3. Apply For Your Personal Loan

Once you pick a lender, it’s time for you to apply. During the application process, you’ll get asked more in-depth questions about your use of the loan, your financial history, and the lender will run a credit check.

Once this step is done the lender will work with you directly to finalize all of the loan details.

Note: This all happens on the BadCreditLoans.com website. 

What Can You Use BadCreditLoans For?

There are several reasons you may need a personal loan for. Here are some of the things you can use BadCreditLoans for:

• Debt consolidation
• Major purchases
• Home improvements
• Medical expenses
• Moving/relocation
• Vacating
• Starting a business
• Education

Eligibility

In order to be eligible for BadCreditLoans you must meet the below personal loan requirements:

• Be a U.S. Citizen or Permanent Resident
• You are at least 18 years old
• Have a regular income, either from full-time employment, self-employment, or disability or Social Security benefits
• Have a checking account in your name
• Provide work and home telephone numbers
• Provide a valid email address

Before filling out the online form make sure you have the below information ready:

• Date of birth
• How much do you want to borrow?
• What do you plan to use the money for?

Loan Terms

Since BadCreditLoans.com lets you see offers from multiple lenders, we wanted to show you the absolute minimum and maximum you can be offered. Actual rates and terms will change by lender.

• Loan Amount Range: $500 – $10,000
• APR Range: Varies by Lender (5.99% to 35.99% APR* Estimation)
• Fees: Origination, Late Payment, and NSF fees all vary by lender
• Prepayment Penalties: Varies by lender
• Loan Terms: 3 to 72 months
• Payments Directly To Creditors: Varies by lender

Keep in mind that if you have a lower credit score you will be charged higher APR interest rates because, statistically, you are a higher risk to default.

 Need more options? Check out our reviews of other online lenders.

BadCreditLoans Customer Reviews

BadCreditLoans has a D- rating on BBB, but they only have two complaints in the past three years. 

BadCreditLoans has an average rating of 2.7 on Trustpilot. Reviews from their customers predominantly praise the platform’s ease of use and their excellent customer service team for their friendliness and ability to resolve problems. 

Customers also appreciate that BadCreditLoans are available to people with horrible credit, no credit, limited credit, bad credit and fair credit.

Many customers praised the speed at which they received larger loans for home projects and emergency needs.

On the negative side, most customers are very concerned about giving out their personal information to a company that will then share their information with multiple lenders.

This is a valid concern and something you should take into account whenever you choose to use a loan matching service.

What to Do After You Get a Loan

It feels great getting approved for something, no matter what it is, you feel like you have just won something. But, now that you have been approved, there are some things you should be doing with your accounts.

Make On-Time Payments

I am sure you are tired of seeing everyone saying “on-time payments”. But it is super important and is one of the largest factors in helping grow your credit score.

Of course, you probably didn’t obtain this loan for building your credit.

However, you still need to be mindful that this product can harm your credit if you don’t manage it correctly.

No matter what, avoid late payments.

Pay Back The Loan ASAP

Along with making on-time payments, you should definitely pay this loan off as soon as possible.

Large personal loans tend to linger when you only pay the minimum. While this does keep more cash in your pocket in the initial phase, eventually you end up spending thousands of more dollars in interest payments.

Getting your credit utilization ratio below 30% will also be great for helping your credit score grow.

The post BadCreditLoans.com Review 2024: Are They Legit? appeared first on FinMasters.

Warning: On July 19, 2023, the Consumer Financial Protection Bureau (CFPB) announced a lawsuit against Snap Finance, accusing the company of misleading advertisements, insufficient disclosures, and interfering with consumers’ ability to understand the terms and conditions of its financing agreements, along with misrepresenting consumers’ payment obligations and making false threats in collections.

The allegations have yet to be proven but they are extremely serious, and given this information we would strongly recommend not doing business with Snap Finance.

What Is Snap Finance?

Snap Finance is a lease-to-own provider based in Salt Lake City, UT. Snap Finance Merchants helps people obtain financing for things like:

• Furniture
• Mattresses
• Tires and Rims
• Jewelry
• Electronics
• Appliances

Instead of going to a lease-to-own retailer directly, you can apply at stores, even if you have bad credit or no credit. You can only use Snap Finance at stores that work with Snap.

Snap Finance will perform a hard credit inquiry, but the inquiry may not show up on your Equifax, TransUnion or Experian credit report because Snap pulls credit from smaller credit reporting agencies such as Clarity and DataX.

Snap Finance is widely used by automotive repair businesses, allowing customers to spread out the costs of expensive car repairs.

How Does SnapFinance Work?

Snap Finance Stores makes it easy to apply for and receive financing online. Just make sure you meet the minimum requirements before moving forward with these 3 steps.

Step 1: Apply Online

The application is online. It just takes a few minutes to fill out the form and you’ll submit your personal information along with your social security number and driver’s license number.

Snap Finance can approve your application in just minutes.

Step 2: Choose a Retailer

Once you get approved, you can choose your store and start looking for items up to $5,000, depending on your approved credit limit. SnapFinance partners with retailers all over the country so you can shop locally and use your approval to lease your items. There’s a store locator feature on their site so you can easily find your nearest retail partner option.

Step 3: Check Out

SnapFinance will send you an email with the amount you are approved to lease once your application is approved. All you need to do is show it to your cashier to proceed with the transaction. Your payments will be automatically deducted from your checking account.

How Much Does Snap Finance Cost?

Snap Finance does not share specific costs for their lease-to-own agreements anywhere on their site. However, they do speak to what some customers can expect in terms of interest or fees.

There will be a processing fee or initial payment due during the day you make your transaction. This amount can vary depending on the specifics in your lease agreement but compare it to a down payment.

Snap Finance does not charge interest on a lease-purchase agreement. However, that does not mean that you won’t pay more than the purchase price of your item(s). As with all lease-to-own companies, there is a cost in addition to the purchase price that will be added to your monthly payments.

For example: If you choose to lease a laptop that retails for $600 and started making $40 payments every 2 weeks for 12 months, you’d pay close to $1,000.

So while the payments are not called “interest”, you’re still paying more money for your lease-purchase agreement.

Some other costs and fees you may want to consider include:

• Application fee and processing charges
• Late fees
• Missed payment or non-payment fees

Snap Finance does not clarify what the cost of financing is, but many users report paying extremely high costs.

Warning: Your total cost could be more than double the cash price of the merchandise.

Snap Finance Reviews

Snap Finance formerly had a B rating with the Better Business Bureau (BBB). That rating has now been revoked, and Snap Finance is currently unranked. The BBB makes it clear that the rating was revoked due to the CFPB lawsuit against Snap Finance.

The customer reviews remain, and Snap Finance gets 4.41 out of a possible five stars from over 1,118 customer reviews. The company has been in business for the past 11 years.

On Trustpilot, Snap Finance gets 4.5 out of 5 stars from 7,462 reviews.

Positive reviews consistently state that the service delivers as advertised and does what it’s meant to do. Some examples from Trustpilot:

The majority of the reviews are very positive, but there is a significant minority of extremely disappointed customers. Some examples from the BBB complaints page:

Snap Finance does appear to be responsive to online complaints. Complaints are typically answered by the company, and there does appear to be an honest effort at resolution.

Several complaints involved auto repair situations where dissatisfied customers want to rescind a payment for work that they consider unsatisfactory. This is a complex situation in which the financing service has to manage divergent claims from the customer and the provider.

Some complaints may also come from customers who did not fully understand the deal they made.

One thing that Snap Finance Stores does recommend that we believe every borrower should do is carefully review the disclosures of the agreement before you sign and agree to anything. Make sure you understand your payment amounts, when they’re due, how much you’d pay over time, fees, and additional unique terms of your agreement.

Snap Finance Review: Final Take

Snap Finance looks beyond a borrower’s credit history when considering them for short-term financing. While their process is easy and flexible, getting financing can be a costly decision.

Snap Finance does not report your payments to the three major credit bureaus. This financing option is not a credit-building opportunity that could help you qualify for better loans in the future.

There are very few purchases that you need badly enough to risk the prospect of paying more than double what the item actually costs.

FAQs:

The post Snap Finance Review: Financing For People With No or Bad Credit appeared first on FinMasters.

What to Expect

A credit score between 670 and 739 is considered good. The US average FICO score of 711 falls in this range. If your score is in this range you will have no problem finding a lender, and you’re likely to have multiple offers.

Interest rates for borrowers in this range may vary considerably. One source cites the following data^[3]:

Credit scores at the low end of the “good” range obviously carry much higher rates than those at the high end of the range. Where you stand in that range – and the rate you’re likely to get – may affect your borrowing plans, and in some cases, it might not be the best alternative.

Should You Use a Personal Loan?

You’ll have to decide whether a personal loan is the right move for you. One thing to consider is that personal loan interest rates are currently at their lowest point in some time.

Borrowers with good (prime) credit are also among the most frequent users of personal loans. This chart uses VantageScore, but the range is very similar.

The popularity of personal loans among borrowers with good credit doesn’t mean a personal loan is the best move for you. That will depend on your personal goals and requirements. Consider these situations:

• Debt consolidation may not be worthwhile if you are at the lower end of the “good” credit score range. Consolidation is usually only worthwhile if your new loan has a lower interest rate than the debts you’re consolidating.
• Using a personal loan to pay off credit card debt makes sense only if your credit is still good enough to qualify for a personal loan with a competitive interest rate.
• Using a personal loan to pay medical bills may also not be the best option. Consider setting up an installment plan with your healthcare provider instead. You may not pay any interest at all. Remember that you can negotiate medical bills!
• If you’re borrowing for home improvements, you presumably own a home. A home equity loan or home equity line of credit is a secured loan that will almost certainly carry a much lower interest rate than an unsecured personal loan. Just be sure you have the means to pay it back!
• If you’re borrowing to make a purchase, think carefully. Be sure you’re including the fees and interest cost in your assessment of the item’s price. Unless it’s something you absolutely need, it might be better to wait.

If you have decided on a personal loan, you’ll be wondering about the best loan options.

Best Personal Loans for Good Credit

Here’s where to start looking for a personal loan with fair credit.

Your Own Bank or Credit Union

The discussion of the best lenders for personal loans tends to focus on large online lenders with a national presence. Sometimes the solution you need is closer to home. The bank or credit union that handles your everyday banking needs is always worth a try.

Your bank or credit union knows you and they have access to your records. You can talk directly to the people who make a decision on your application. If your credit is flawed because of an old problem or if you have evidence of creditworthiness that is not part of your credit score, such as your income or employment record.

Online Personal Loans

With a good credit score, you will have access to many top personal loans online. You can expect competitive rates, though rates may vary considerably from the high end to the low end of the “good” range.

Prequalify for a Personal Loan

Check your personal loan rates by answering a few questions. It only takes two minutes and has no impact on your credit score.

Get Started

Sofi

SoFi is a well-known student lender that has branched out to handle other loan types. The minimum credit score for personal loans is 680, and a higher score will get you better terms and a better chance of approval.

Check rates via Credible.com

LightStream

LightStream makes loans of $5,000 to $100,000. They have a wide variety of loan products and a reputation for fast approval and fund release. The minimum credit score is 660.

Check rates via Credible.com

Happy Money

Happy Money lends up to $40,000. Their Payoff Loan is specifically intended for consolidating credit card debt and are limited to that purpose. There are no prepayment fees. Your credit score will need to be over 640.

Best Egg

Best Egg provides loans from $2,000-$50,000 to borrowers with credit scores of 600 and above and has consistently good customer reviews.

Check rates via Credible.com

All of these companies serve borrowers with a range of credit scores. If your score is at or near the lower end of the range you will not get the best available rates and you may not be approved at all.

Loan Matching Services

Many of the first choice destinations for personal loans are not lenders at all. They are matching services that pass your information to a network of lenders and let them make offers. That makes comparison shopping easy and can help you get a better deal. That gives you access to multiple lenders with a single application, and lets you compare the results.

Some services, especially those serving bad credit borrowers, have earned a questionable reputation. With good credit, though, you will have access to companies that are legitimate and who will match you with quality lenders without selling your contact details or compromising your personal information.

It’s still worth running searches on any company you’re considering. Some customers are never satisfied, and all companies will have some complaints. If there’s a pattern of similar complaints, beware.

Here are some top options for borrowers with good credit.

Credible

Credible is a highly regarded loan marketplace. Lenders in Credible’s network will make loans up to $200,000. They serve borrowers with credit scores over 620. Close with a better rate than you prequalify for on Credible and get a $200 gift card. Terms apply.

Bankrate

Bankrate can help you match with lenders whose rates are no greater than 35.99% APR* with terms from 6 months to 84 months.

LendingTree

LendingTree is a loan matching service with a minimum credit score of 600. They require evidence of income and employment and your debt-to-income ratio will need to be under 36%. Loan amounts are $200,000 and under.

LendingClub

LendingClub lenders will make loans up to $40,000. A minimum credit score of 600.

Check rates via Credible.com

Many of these services will work with borrowers at the lower end of the “good” range and even those with “fair” credit, but with a good score will get you lower interest rates and better terms.

What to Do Next

Your good credit score will get you a personal loan. You will be approved; that’s not a problem. You may not get the interest rate or terms that you want, especially if your score is at the lower end of the “good” range.

If you’re not getting the terms and rates that you want, you have a strong reason to improve your credit. If you can make it to “good”, you can make it to “very good” or even “excellent”. At that point, lenders will roll out the red carpet and cough up their very best deals, and that’s worth working for!

Building better credit takes time, but the basic strategies are simple. The first step is right in front of you: you have a new personal loan, and making every payment on time will give your credit a boost. Don’t stop there. Start by understanding your credit score and follow these steps to improve your credit!

How We Chose The Best Personal Loans for Good Credit of 2023

The post Best Personal Loans for Good Credit (670-739 Credit Score) appeared first on FinMasters.

A credit score between 580 and 669 is considered fair. It won’t be hard to get a loan, and you’re likely to have several offers with personalized prequalified rates** from credible lenders. You won’t get the best rates: you’re likely to pay close to 20% annual interest (potentially more if you’re at the lower end of the range) and you will probably have an origination fee as well.

What to Expect

The high cost of personal loans for fair credit means you’ll have to think seriously about how you plan to use them. For example:

• If you’re borrowing for loan consolidation, you’ll need to consider the costs and the benefits carefully. Consolidation is rarely worthwhile unless the interest rate on the consolidation loan is significantly lower than the interest rates on the loans you’re consolidating.
• If you’re borrowing to pay medical bills, consider other options. Setting up an installment plan with your healthcare provider could save you money. Many providers offer interest-free installment plans. Always negotiate medical bills!
• If you’re borrowing for home improvements, you presumably own a home. A home equity loan or home equity line of credit is a secured loan that will almost certainly carry a much lower interest rate than an unsecured personal loan. Just be sure you have the means to pay it back!
• If you’re borrowing to make a purchase, think carefully. Be sure you’re including the fees and interest cost in your assessment of the item’s price. Unless it’s something you absolutely need, it might be better to wait.

Those can be difficult tradeoffs, but that’s the reality of below-average credit.

How to Prepare

• Know your credit score. Always check your score before applying for a loan. Remember that free credit score providers usually use VantageScore and lenders usually use FICO. They can be different.
• Check your credit report. Get your credit reports and review them carefully, especially if your credit score is not what you expect. Review our guide to understanding your credit report!
• Address any errors on your credit report. Many credit reports contain errors that can drag scores down. If you spot anything on your credit report that doesn’t seem right, challenge it using the dispute process.
• Consider credit repair. If you’re worried about credit repair companies, we don’t blame you. The industry has earned its dubious reputation. There are still legit companies and they may be able to help you boost your credit, especially if you have a complex credit report with numerous tradelines. Understanding the credit repair process is a good start.
• Check other criteria. Many lenders consider factors known as “alternative data”: things like your income and employment history, your debt to income ratio, and even your record of paying rent and utility bills on time. Make sure you’re ready to present evidence to support your record.
• Know the lenders. Assemble a list of lenders you think are worth trying out. You’ll want to file all of your applications within a 15-day period, so the credit bureaus will see that you’re shopping for the best deal and register only a single hard inquiry.

That brings us to the next question: where do you look for a personal loan with fair credit?

Best Personal Loans for Fair Credit

Here’s where to start looking for a personal loan with fair credit.

Your Credit Union or Bank

It’s easy to get caught up in the world of online lenders, but sometimes the solution to your loan problem is right in front of you. If you have an ongoing business relationship with a local bank or credit union it’s always worth talking to them about a loan.

Managers often have significant latitude in making deals and are happy to work with existing customers. They also have evidence of your income and cash flow right in front of them, so you won’t have to prove anything!

Direct Online Lenders

Your credit score will close you out of some of the top online lending options, but there are still a few possibilities.

Prequalify for a Personal Loan

Check your personal loan rates by answering a few questions. It only takes two minutes and has no impact on your credit score.

Get Started

LendingPoint

LendingPoint makes personal loans up to $36,500 and often releases funds the next business day after you apply. The minimum credit score is 590 and you’ll need an income of $25,000 a year or more.

PenFed Credit Union

PenFed Credit Union makes loans of $600 to $50,000 to borrowers with credit scores of 580 and above. You’ll need to join the credit union.

Upgrade

Upgrade makes personal loans up to $50,000 with no prepayment fees. The minimum credit score is 580.

Check rates via Credible.com

Avant

Avant makes personal loans of $2,000-$35,000, with a minimum credit score of 550.

Check rates via Credible.com

Best Egg

Best Egg has consistently high customer reviews. They lend from $2,000-$50,000. The minimum credit score is 600.

Check rates via Credible.com

There are many other online lenders out there, and it’s also worth checking your area for local and regional lenders who are willing to work with borrowers who have poor credit.

Loan Matching Services

These services don’t make loans. They receive applications and match them with a network of lenders. That gives you access to multiple lenders with a single application, and lets you compare the results.

Loan matching services serving borrowers with bad credit have earned a shaky reputation. Some users report immediate bombardments of marketing emails and calls; others claim that personal information was compromised. As you move up the credit score chain these problems become less evident, and there are many credible loan matching services for borrowers with fair credit.

You should still check the reputation of any service before sending your contact details or sensitive financial information like your Social Security number.

Here are some options:

Credible

Credible is a reputable marketplace representing lenders offering loans up to $200,000. The minimum score is 620, but not all lenders will make offers at that level. Close with a better rate than you prequalify for on Credible and get a $200 gift card. Terms apply.

Bankrate

Bankrate can help you match with lenders whose rates are no greater than 35.99% APR* with terms from 6 to 84 months.

LendingTree

LendingTree is a matching service advertising a minimum credit score of 600. You will need proof of employment/income and a debt-to-income ratio under 36%. Loans range up to $200,000.

LendingClub

LendingClub makes loans up to $40,000 with origination fees up to 6%. Their website does not list a minimum credit score.

Check rates via Credible.com

Upstart

Upstart is a highly rated loan marketplace handling loans up to $50,000. The minimum credit score is 300. They consider education and other non-traditional data in lending decisions, so they are a great choice if you have a thin credit file.

PersonalLoans.com

PersonalLoans.com is both a loan matching company and a peer-to-peer lending platform. There’s no stated minimum credit score.

These are some of the best-known matching services handling borrowers with fair credit. You may find others. Always check the company’s track record!

What to Do Next

You will be able to get a personal loan with fair credit, but you won’t get the best deals. You will pay a higher-than-average interest rate and you may also pay a steep origination fee. That can be good motivation to improve your credit so you can get a better deal next time you need to borrow.

Building credit can be intimidating, but if you have a personal loan the first step is easy and obvious: make every payment on that loan on time. That will push your credit score in the right direction.

Of course, there’s a lot more that you can do. Start by understanding your credit score and how it’s calculated. Then try these 8 steps for rebuilding your credit.

Paying off a high-interest personal loan isn’t fun, and you’ll have to think carefully about whether or not you really need the loan. Either way, let that interest rate motivate you to improve your credit score and step up your financial game!

How We Chose The Best Personal Loans for Fair Credit of 2023

The post Best Personal Loans for Fair Credit (580-669 Credit Score) appeared first on FinMasters.

Prequalify for a Personal Loan

Check your personal loan rates by answering a few questions. It only takes two minutes and has no impact on your credit score.

Get Started

Who Is CashUSA Com?

CashUSA com started in 1997 by bringing together traditional lenders, peer-to-peer lending networks and tribal loans (from Native American Indian Funds). 

Today, they have grown to offer personal and installment loans across the United States to all credit types.  

They are not an actual lender but provide the platform for borrowers with bad credit or good to find the best rates by receiving multiple offers from different banks or lenders. 

What Makes Them Different?

CashUSA is unique in that it offers a robust platform for peer-to-peer borrowing and access to tribal loans. 

Tribal loans offer the opportunity for people who are self-employed or have a varied credit history to qualify for personal loans that they may not qualify for with a traditional lender. 

Keep in mind that tribal loans are funded from sovereign native American lands and do not always have to meet state APR maximums. 

They have relationships with a wide variety of banks and lenders which allows them to offer personal loans to people with bad credit, no credit, or limited credit. 

Even if you have bankruptcies, repossessions, and judgments, CashUSA may have a lender willing to lend money. 

Keep in mind that if you have a lower credit score you will be charged a higher APR interest rate because you statistically are a higher risk to default. 

They also offer you the ability to apply and complete the entire loan process from your mobile phone on their CashUSA app. 

How Does CashUSA Work?

CashUSA have one of the easiest platforms to use and it only takes about 30 seconds to find your best rate. 

CashUSA works by sending your information to lenders in their network that may match up well with you. 

The lenders then send you an offer for a personal loan based on your credit score, credit history, and your ability to pay. 

1. Find Your Rate

The first thing you do is select “Personal Loans” and fill out the short form. It takes about 1 – 2 minutes to enter your information.

You need to provide basic information and financial income, as well as the amount of the personal loan you are looking to apply for.

You need to provide basic information and financial income, as well as the amount of the personal loan you are looking to apply for.

And guess what: 

CashUSA com doesn’t check your credit score to get lender offers, they only do a soft credit check.

This means you get to see what rates you can qualify for without the worry of it affecting your credit. 

2. Compare Your Options

Once you put your information in and submit the form you will be taken to a dashboard. 

This dashboard will have multiple pre-approval offers from different lenders.

Keep in mind, these are Pre-Approvals and your actual approval is not guaranteed; however, you will get to see your actual pre-qualified rates.

The rates you see are usually very accurate as long as you can verify your information and nothing changes on your credit report. 

Once you confirm and verify everything the rates are pretty solid.  The best thing is that you get to see your options up-front and know exactly which option is best for you.

3. Apply For Your Personal Loan

Once you pick a lender, it’s time for you to apply. During the application process, you’ll get asked more in-depth questions about your use of the loan, your financial history, and the lender will run a credit check. *Note: This all happens on the CashUSA.com website. 

Once this step is done the lender will work with you directly to finalize all of the loan details.

CashUSA Reviews Eligibility

In order to be eligible for CashUSA com Reviews, you must meet the below personal loan requirements:

• Be a U.S. Citizen or Permanent Resident
• You are at least 18 years old
• Have a regular income of $1,000 After Taxes either from full-time employment, self-employment, or disability or Social Security benefits
• Have a checking account in your name
• Provide work and home telephone numbers
• Provide a valid email address

What Information Will You Need To Apply?

Before filling out the online form make sure you have the below information ready:

• Date of birth.
• How much you want to borrow.
• What you plan to use the money for.

CashUSA Loan (Basics)

Since CashUSA.com review lets you see offers from multiple lenders, we wanted to show you the absolute minimum and maximums you can be offered. Actual rates and terms will change by lender.

• Loan Amount Range: $500 – $10,000
• APR Range*: 5.99% to 35.99% varies by lender 
• Fees: Origination, Late Payment, and NSF fees all vary by the lender.
• Prepayment Penalties: Varies by lender
• Loan Terms: 3 to 72 months
• Payments Directly To Creditors: Varies by lender.

CashUSA Personal Loan Calculator

Use the CashUSA Personal Loan Calculator to help determine the payment amounts based on interest, length of personal loan and amount borrowed. 

The interest rate will be determined primarily by your credit score and your ability to repay the CashUSA com review personal loan. 

This calculator lets you adjust the different loan variables to give you a good understanding of how each affects your monthly payment. 

As you increase the length of the loan the monthly payments decrease.

If you are able to find a personal loan with a lower interest rate that will decrease your monthly payment amounts, also. 

What To Use CashUSA.com Loans Reviewed For?

There are several reasons you may need a personal loan and below we list out some of the reasons you may need a CashUSA personal loan:

• Debt/Credit Card Consolidation
• Down Payment For Home  
• Major Purchase    
• Home Improvement   
• Medical Expenses   
• Moving/Relocation    
• Vacation
• Start Business    
• Education    
• Your Wedding

As you can see, there is a huge list of reasons for getting a personal loan.

Of course our favorite reasons is for Debt Consolidation, Education, and Starting a Business.

CashUSA Reviews

CashUSA reviews from their customers predominantly praise the platforms ease of use and their excellent customer service team for their friendliness and ability to resolve problems. 

Customers also appreciate that CashUSA are available to people with horrible credit, no credit, limited credit, bad credit and fair credit.

Many customers raved about the speed at which they received larger loans for home projects and emergency needs. 

Overall, after reading hours of CashUSA.com reviews we feel confident in recommending them for any future financing you may need. 

CashUSA BBB – Better Business Bureau Reviews 

CashUSA BBB has had a file at the Better Business Bureau since 1997.

CashUSA reviews BBB have a A- rating but they only have four complaints in the past three years. 

It would be unfair to rate a company that has been in business since 1997 based on zero customer reviews and four customer complaints. 

Generally, customer reviews on the BBB website are negative so the fact that in almost 25 years they have received only four, confirms that this is an upstanding company to choose. 

Steps To Take After CashUSA Review Approval

It feels great getting approved for something, no matter what it is, you feel like you have just won something.

But, now that you have been approved, there are some things you should be doing with your accounts.

Make On Time Payments

I am sure you are tired of seeing everyone saying “on-time payments”.

But it is super important and is one of the largest factors in helping grow your credit score.

Of course, you probably didn’t obtain this loan for building your credit.

However, you still need to be mindful that this product can harm your credit if you don’t manage it correctly.

No matter what, avoid late payments.

Pay Back The Loan ASAP

Along with making on-time payments you should definitely pay this loan off as super fast as possible.

Large personal loans tend to linger and we usually only pay the minimums. 

Now: 

While this does keep more cash in your pocket in the initial phase, eventually you end up spending thousands of more dollars in interest payments.

Getting the credit utilization below 30% will also be great for helping your credit score grow. 

Taking Action & Getting A Loan

Hopefully, you found this CashUSA Review to be helpful because Personal Loans are a great option to pay down debt, or even start a business. 

If you need a personal loan then don’t waste any time getting your loan through CashUSA.com’s lender network.

 Need more options? Check out our reviews of other online lenders.

The post CashUSA Review For 2023 | Get Cash In Your Hands Quickly appeared first on FinMasters.

Decide Whether a Personal Loan Is Right for You

Before applying, you must decide whether a personal loan is your best option.

Personal loans offer flexible financing. They can also come with lower interest rates than a typical consumer credit card, which can be optimal if you’re struggling with credit card debt.

But this doesn’t necessarily mean that personal loans are low-interest. For example, if you’re looking to buy a car, a typical auto loan will offer better rates and terms than a personal loan. According to TransUnion, borrowers have taken on more than $8,000 in average personal loan debt in recent years, so these types of loans can truly add a lot to your monthly expenses (and stress levels).

Personal loans, especially ones that involve a co-signer, should be used only when it makes sense or is truly necessary. When you’re seeking to consolidate credit card debt, or if other funding options aren’t available for a large purchase, a personal loan can be a good option.

Applying for a Personal Loan With a Co-Signer: The Pros

A co-signer is a second party who signs a loan agreement. Even if you’re listed as the primary borrower, the co-signer is now contractually obligated to pay the loan along with you.

For the borrower, this brings many advantages, including the following.

1. Qualify for a Loan With Poor Credit

Many lenders require you to have a credit score in the near-prime (620 and above) or prime (660 and above) range. Without a co-signer, a lender may reject your loan application outright. But if you apply with a co-signer — particularly one with strong credit — you’ll stand a better chance of receiving approval.

Learn more: Heads up: Our newest post sheds light on the top personal loans for bad credit, simplifying your journey to financial recovery.

2. Qualify for a Higher Loan Amount

When you apply for a personal loan, your lender will review your credit history to determine your eligibility and the amount you qualify for. You may not qualify for a large amount if you have bad credit. A co-signer may be able to increase the loan amount and help you qualify for a larger loan.

3. Qualify for Better Interest Rates and Terms

Your credit history also plays a role in determining your interest rate and loan term. A high interest rate means you’ll be paying more for the loan. If you apply for a personal loan with a co-signer, you may qualify for a better interest rate or favorable loan term.

4. Improve Your Credit

Applying for a loan with a co-signer won’t directly boost your credit score. But if you end up qualifying for a loan, that can improve your credit mix. And, by making consistent on-time payments on it, you can make progress in repairing a below-average credit score.

Applying for a Personal Loan With a Co-Signer: The Risks

Many of the risks of applying for a joint loan apply to the co-signer more than the primary borrower. After all, the borrower receives the truest benefit, and the co-signer takes on the greater risk. That presents a challenge in finding the right person to cosign the loan. Here are some reasons why it might be risky.

1. You May Take on More Debt Than You Can Manage

One of the main risks is that by qualifying for a higher loan amount, you may find yourself faced with more debt than you can manage. Make sure that the monthly payments fit into your budget to prevent yourself from defaulting on the loan.

2. Co-Signers Take on More Debt

The primary borrower will usually make payments on the loan, but the co-signer is equally responsible. As a result, a joint loan will impact the co-signer’s debt-to-income ratio, which can affect their ability to qualify for loans. And if you default on the loan entirely, the co-signer becomes responsible for the loan.

3. The co-signer’s Credit History Can Be Damaged

Missed or late payments won’t just show up on your credit report. They’ll also affect your co-signer. When you apply for a loan with a co-signer, that individual’s credit is linked to yours, and you can cause damage if you fail to repay the loan on time.

How to Apply for a Personal Loan With a Co-Signer: Step-by-Step

Should you decide to pursue a personal loan with a co-signer, you’ll have to find the right co-signer and the right lending program. Here’s what to expect in the loan application process.

Acquiring a #personalloan with a co-signer is smoother with insights from our latest post.

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1. Find a Potential Co-Signer

While you might wait until you start shopping for loans, it never hurts to find a co-signer beforehand. Some possible options include:

• A close family member with excellent credit
• A close friend that you’re comfortable talking about money with
• A personal or professional mentor that you know well and trust

For example, young adults might ask their parents to co-sign a personal loan since the relationship is usually close enough that the parents can agree and monitor the loan repayments.

2. Discuss Repayment Options With Your Co-Signer

From a contractual standpoint, your co-signer is assuming a great deal of risk while you’re reaping the benefits of their strong credit score. Make sure to have a candid conversation that addresses future issues, such as the possibility that you might struggle to make your payments.

Since most co-signers are close family members or friends, it’s important to be honest about possible challenges before they interfere with your relationship. Once you’re on the same page, you can move on to shopping for lenders.

3. Find the Right Lender

Not all lenders will accept a co-signer. You’ll need to spend some time researching possible lenders to find the right option. 

Online lenders generally make it easy to research and compare rates and terms, and they usually provide their requirements on their websites. But your co-signer may already know of a good lending option, which can make the process all the easier.

4. Compare Rates and Terms

With so many lenders out there, it’s important to compare rates and terms to ensure that you get the best deal.

The best way to go about this is to compare the interest rates and loan terms of at least three lenders. Some online lenders allow you to prequalify, which will give you a better idea of your loan amount and the cost of repayment.

5. Gather Your Documentation

To get approved for a loan, you and your co-signer must provide documentation regarding your current financial situation. The lender will perform a credit check for you and your co-signer, but each of you must still provide:

• Identification
• Bank statements
• Tax records
• Pay stubs

You and the co-signer must demonstrate proof of income. This reduces the lender’s risk and ensures you receive a favorable loan. The lenders will also want to assess your current debts and your credit score.

6. Complete the Application

Every lender will use a slightly different process but will generally require the documentation you gathered in step 4.

Remember that this process will involve a hard credit inquiry, which will temporarily lower both your credit score and your co-signer’s. If you plan on applying to multiple lenders, complete the applications within the same 30-day window to minimize the damage.

7. Respond to Any Additional Lender Requests

The loan approval process varies by lender and may take additional time. Make sure to respond quickly if the lender requests additional information or documentation. That way, the process will go as smoothly as possible.

8. Sign the Loan Agreement

Assuming you get approval, you and the co-signer must sign the loan agreement. This makes the co-signer responsible for the loan if you fail to make payments.

Once you sign the agreement, the money will be dispensed directly to you, typically as a lump-sum payment. Any origination fees or other lending costs will be paid at this time, though they might also be rolled into your monthly payments.

9. Stick to Your Repayment Schedule

When you apply for a personal loan with a co-signer, the most important step of all is to stick to your repayment schedule. After all, your co-signer put a lot on the line to help you get this loan. Don’t risk their credit by missing payments. In fact, making consistent payments will improve your credit score and reduce your need for a co-signer for future loans.

Conclusion

Applying for a personal loan with a co-signer is great for young adults who are still building their credit and can rely on their parents for support. But it can also be a solid option for those with low credit who need flexible funding to cover debts or a large purchase.

Alternatively, you might consider working on your credit to eliminate the need for a co-signer. But if you need money today, you might be able to get by with a little help from your friends.

The post How to Apply for a Personal Loan With a Co-Signer (in 9 Steps) appeared first on FinMasters.

They are still very different types of loans, and the differences can be extremely important.

Let’s compare these two types of financing.

What are Payday Loans?

Payday loans are among the most popular loans in America. There are 23,000 storefront payday lenders in the country, more than twice the number of McDonald’s restaurants, and many more lend online^[1].

These are some of the characteristics of payday loans:

• Easy qualification. There’s no credit check or minimum credit score. Anyone with an income and a bank account can borrow.
• Small amounts. Some payday lenders lend up to $1000, but most loans are from $300 to $500.
• Single payments. A payday loan is meant to be paid in a lump sum on your next payday.
• Automatic payments. A payday lender will request a post-dated check or authorization to withdraw directly from your bank account. They won’t wait for you to pay.
• Very high rates. Payday loan fees may reach 400% to 600% on an annual basis.
• Rollovers. Most payday lenders will roll over your loan for an additional fee if you can’t pay on the due date.
• Limited availability. Some states ban or restrict payday loans.

Payday loans are a fast, easy way to get money to carry you through until your next payday. They are also a fast, easy way to get trapped into a cycle of debt at astronomical interest rates.

Most borrowers can’t pay off their loans: the CFPB estimates that 80% of payday loans are rolled over, and over 60% are part of “loan sequences” of seven or more loans in a row^[2]. These borrowers often end up paying back more than they borrowed in the first place.

Tip: A payday loan may also be called a payday advance, check loan, small-dollar loan, payroll loan, salary loan, or cash advance loan.

What are Personal Loans?

Personal loans are typically made by banks, credit unions, and online lenders. These are some key features of personal loans.

• Higher lending standards. Personal loan lenders will check your credit. If you have poor credit or no credit score, it’s hard to get approved.
• Larger amounts. Many personal loan lenders will lend up to $50,000 to qualified borrowers. Some will lend more.
• Multiple payments. Personal loans are paid off in monthly installments, usually over terms of three to five years.
• You have to make payments. You can authorize an automatic payment from your checking account, but the lender won’t make a withdrawal.
• Low interest rates. The average personal loan rate is about 10% per year. Your rate will depend on your credit score and other factors, but personal loan rates almost never exceed 30% per year.
• Wide availability. Personal loans are available in all states.

Personal loans, also called consumer loans, are designed to pay for large purchases or expenses. The most common uses of personal loans are debt consolidation, medical costs, vacations, marriage ceremonies, birthdays and other celebrations, vehicle repairs, and home renovations.

Payday Loans vs. Personal Loans: What’s the Difference

Payday Loans and personal loans are different financial products made for different purposes.

• Payday loans are small, short-term loans designed to get you through to your next paycheck. They are usually used by people with poor credit and little access to other loans. 70%of borrowers use their loans to pay for routine recurring expenses^[3].
• Personal loans are larger installment loans typically used by borrowers with at least fair credit. They are usually used for planned major expenses, not to cover an emergency shortfall.

Payday loans are used by people under serious financial stress. The average payday loan borrower earns around $30,000 per year, and 58% of borrowers have trouble meeting routine expenses.

What if You Can’t Pay?

A significant similarity between payday and personal loans is that they are usually unsecured, so there is no ownership or asset behind the loan. In other words, in the event of non-payment of a payday loan or a personal loan, the lender cannot seize anything.

But what happens if you can?t pay your loan?

Personal Loans

If you fail to make payments on a personal loan, the lender will report the late payments to the credit bureaus, and your score will drop.

If your account becomes seriously delinquent, it may be charged off and sent to a collection agency. The collector will pursue you, your credit will drop more, and the collection agency could sue you.

Payday Loans

If you can’t afford to pay a payday loan, you can roll it over into another loan. This is very common. It’s what the lender wants you to do: they make more money when you roll the loan over. It’s also a huge drain on your finances.

When your payday loan becomes due, the lender will deposit your post-dated check or make a direct withdrawal from your checking account. If your account doesn’t cover it, you may be hit with an overdraft or insufficient funds fee.

These fees can add up fast. Your lender may make repeated attempts to draw their payment, and each one will trigger a fee.

Payday lenders do not report to the credit bureaus, so missed payments will not affect your credit score. If the lender sends the account to a collection agency, it will be reported, and it will affect your credit.

The lender or collection could file a collection lawsuit against you. If the judge rules against you, your wages could be garnished.

Personal Loans vs. Payday Loans: Pros & Cons

Here is a rundown of the pros and cons. 

Which Should You Use?

In most cases, it won’t be a choice. If you qualify for a personal loan, you’re probably not in the market for a payday loan.

If you do have a choice, it should be clear: a personal loan is a far cheaper and generally better option. Payday loans are designed to trap you in a cycle of high-interest debt that will cost you far more than you initially borrowed.

If you think you don’t have a choice, remember that there are alternatives to payday loans. Examine all your options before you make a decision!

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