Is A Personal Loan Right For Me What Are Other Alternatives
Personal loans aren’t right for every situation, nor every person. Often, personal loans can be difficult to qualify for, with high credit score requirements. They can also carry high interest rates, which could mean there are better options out there.
Personal loans come in two types: secured or unsecured. Unsecured loans aren’t backed by collateral like a home or car, while secured loans are. Personal loans also have higher interest rates than you’d see on a car loan or a student loan. Homeowners sometimes find that home equity lines of credit are better to fund major repairs or renovations with lower interest rates.
For small amounts, you might find that a 0% APR credit card would be a better fit they can be especially useful for consolidating credit card debt or making purchases that you’d like to pay off over time. Generally, these cards have 0% APRs for the first 12 to 16 months from opening. Pay off the card in full before the introductory period is up, and you won’t pay interest on your purchase.
For larger purchases that won’t fit within a credit limit, a personal loan might be the right option. It’s worth calculating the interest you’ll pay, and carefully considering options like a secured loan to bring down the interest rate. However, personal loans should be used wisely, as they have high interest rates and could be risky when there’s collateral involved.
How To Apply For A Loan With Sofi
SoFi makes the application experience simple. Youll start by creating a username and password and providing some basic information to see if you prequalify. The application is entirely online, but SoFi does provide customer service numbers should you need support. You can reach customer support at 855-456-7634 Monday through Thursday from 5 a.m. to 7 p.m. PT and Friday through Sunday from 5 a.m. to 5 p.m. PT.
Before finalizing your loan, SoFi, like all lenders, will do a hard credit check, which can adversely impact your credit score. SoFi says you should receive funds within a few days after signing the documentation and confirming your address.
If you are rejected for a SoFi personal loan and you believe that your financial standing is strong enough, consider asking for clarification. The explanation could be as simple as a processing error, or there may be a negative mark on your credit report that you need to investigate.
If your credit is lower than 700, consider applying for a personal loan with Avant, OneMain Financial or a credit union. You may find more favorable rates and fewer lending restrictions.
Personal Loan Rates At Credit Unions
The average rate charged by credit unions in March 2021 for a fixed-rate, three-year loan was 8.86%, according to the National Credit Union Administration. Federal credit unions cap the APR on personal loans at 18%.
You have to become a member of a credit union to apply for a loan, which may mean paying fees or meeting certain eligibility requirements.
» MORE:
Read Also: How Long Before Sba Loan Is Approved
Best For Cosigners: Td Fit Loan
TD Bank
The lender allows for co-signers and doesnt charge any application fees.
-
Availability limited to residents of only 15 states
-
You might have to visit a branch to complete the application process
-
Low credit scores wont qualify
- Minimum/maximum you can borrow: $2,000 to $50,000
- 6.99%21.99%
- Fees: No origination fees or application fees
- Minimum recommended credit score: 660
- Other qualification requirements: In addition to your creditworthiness, your employment history and income may be taken into account.
- Repayment terms: 36 to 60 months
- Time to receive funds: As soon as the next business day
- Restrictions: May need to complete the application process in person. Loans cannot be used for business or education purposes. Eligibility is limited to residents of Washington, D.C. and the following states: Connecticut, Delaware, Florida, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont, and Virginia.
Read the full review: TD Bank Personal Loans
Axis Bank Personal Loan
If you want a hassle-free personal loan and also earn reward points then Axis bank is the option. You can avail of personal loans from Rs. 50,000 to Rs. 15 Lakhs and earn up-to 450 edge rewards points. Each point has a value of Re. 0.20 to 0.25.
You can choose to repay the loan in 12 to 60 months period.
Personal Loan Interest Rates Axis Bank
Ranging from 12% to 24%
Personal Loan Details
| Rs. 50,000 to 15 Lakh | |
| Processing Fee | 1.5% to 2% of the loan amount |
| Late Fee | |
| 0 to 12 months 5%13 to 24 months 4%25 to 36 months 3%more than 36 months 2% | |
| Loan Tenure |
- Quick approval with minimum documents
- You can earn reward points while applying for a personal loan
- Rs. 15 Lakhs of the loan amount
- Preference for salaried persons
| Govt ,Public and Private Ltd employees and salaried doctors |
| Minimum Age |
| 60 years at the time of maturity of the personal loan |
| Net monthly income |
- Income proof and Bank statement
- Standing instruction request / ECS forms
You may also like to readBest Bank for Home Loan in India
Read Also: Usaa Bad Credit Auto Loans
What Is Loan Interest
Interest is the price you pay to borrow money from someone else. If you take out a $20,000 personal loan, you may wind up paying the lender a total of almost $23,000 over the next five years. That extra $3,000 is the interest.
As you repay the loan over time, a portion of each payment goes toward the amount you borrowed and another portion goes toward interest costs. How much loan interest the lender charges is determined by things like your , income, loan amount, loan terms and the current amount of debt you have.
Benefits Of Personal Loans
There are many benefits to consider before choosing the best personal loan for your budget and lifestyle. The following features set personal loans above other forms of financing:
- Quick financing. Get the funds you need to cover your daily or unexpected expenses in an emergency.
- Affordable payments. Pay less in interest than you might have to with a credit card or short-term loan .
- Large amounts. Qualify for larger amounts of credit than you might be able to with a credit card, payday loan or line of credit.
- Longer terms. Pay your loan off with consistent repayments over a longer term to make sure you stay within your allotted budget.
- Multiple lenders. Compare personal loans from a number of different lenders to find the best terms and rates for your unique personal situation.
- Bad credit can qualify. You may still be able to qualify with bad credit if youre willing to accept higher interest rates, secure your loan with assets or enlist a co-signer.
You May Like: What Credit Bureau Does Usaa Use For Auto Loans
How To Apply For A Personal Loan
You can follow these steps for apply for the best personal loan for your unique situation:
Can Your Credit Score Affect Your Personal Loan
As with most financial products, when it comes to taking out a personal loan, your credit score can affect your borrowing power, choice of lenders and the rates available to you.
If you have an excellent credit history, there will typically be more lenders who are inclined to lend you money. This is because borrowers with excellent credit scores have a history of responsible credit behaviour and are thus less of a risk to the lender than those with bad credit scores.
Similarly, an excellent credit score can often unlock more competitive interest rates and more flexibility in terms of the loan amount you may be approved for.
Keep in mind, however, that there are a number of other factors that contribute to the success of a personal loan application. Consider the eligibility criteria of each individual product before applying.
Borrowers with bad credit may still be able to find a personal loan product that works for them. Its also worth thinking about the steps you can take to improve your credit score, such as working on existing debts and building your savings.
Recommended Reading: How Long Does Sba Loan Take To Get Approved
What Are The Benefits Of Personal Loans
Personal loans offer several benefits, including:
Fixed interest rates:
Can be used to consolidate debt:
You can take out a personal loan to consolidate multiple kinds of debt, such as credit cards or other loans. Depending on your credit, you might get a lower interest rate than youve been currently paying, which could potentially help you pay off your debt faster.
Can cover large expenses:
If you need to pay for a large expense such as home improvements, medical bills, or a wedding a personal loan could be an option to get the cash you need.
Generally unsecured:
Most personal loans are unsecured, which means you dont have to worry about collateral. However, because unsecured loans present more of a risk to the lender, an unsecured personal loan could be harder to qualify for compared to a secured loan.
Best For Refinancing High
Who’s this for? SoFi got its start refinancing student loans, but the company has since expended to offer personal loans up to $100,000 depending on creditworthiness, making it an ideal lender for when you need to refinance high-interest credit card debt.
If you have high-interest debt on one or more card, and you want to save money by refinancing to a lower , SoFi offers a simple sign-up and application process, plus a user-friendly app to manage your payments.
Another unique aspect of SoFi lending is that you can choose between variable or fixed APR, whereas most other personal loans come with a fixed interest rate.Variable rates can go up and down over the lifetime of your loan, which means you could potentially save if the APR goes down . However, fixed rates guarantee you’ll have the same monthly payment for the duration of the loan’s term, which makes it easier to budget for repayment.
By setting up automaticelectronic payments, you can earn a 0.25% discount on your APR. You can also set up online bill pay to SoFi through your bank, or you can send in a paper check.
Once you apply for and get approved for a SoFi personal loan, your funds should generally be available within a few days of signing your agreement. You can both apply for and manage your loan on SoFi’s mobile app.
Read Also: Sss Loan Application
Best Personal Loans In Malaysia 2022
When should you apply for a personal loan?
The truth is, there is never a best time to apply for a personal loan when you are not prepared for it.
In this article, you will find out the dos and the donts of personal loan application based on experiences and best practices of ordinary Malaysians.
Read on to learn what a personal loan is about, how can you apply for a personal loan at the lowest rate and highest amount, and what should you do after a loan is approved or rejected.
Are You Eligible For Government Help
Before going for commercial debt, it’s worth seeing if there are any Government loans available to you. There are two types you might be eligible for:
Local help: Since April 2013, each local authority has been responsible for providing help to residents struggling with an emergency. This can include you or your family’s health being at risk, not being able to afford to buy food, needing help to stay in your own home and coming out of care, hospital or prison.
Sadly, this is a postcode lottery. Each council can choose whether to offer financial help or not, and councils can decide who is eligible. Some may give furniture or food grants, others may give cash.
National help: The next type are budgeting loans and advances. These are only for those receiving benefits and with no or low savings. They allow for a wide range of borrowing, to pay for items including school uniform or furnishings.
For more information, read our Debt Help guide.
Don’t Miss: How Long Does Sba Loan Approval Take
Are You In Need Of A Personal Loan
Before making the decision about getting a personal loan, assess your needs and your current situation and decide if it is right for you. Review your needs and determine if they currently require a personal loan. Consider things like what the loan is for, how you will repay it, how soon you need it, and what you need to do to qualify for the loan. Take note of your FICO score because the higher your credit score, the better interest rate you can receive.
Common reasons to get a personal loan include debt consolidation, making a large purchase, or a financial emergency.
Factors Affecting Interest Rate On Personal Loan
Personal loan interest rates are not fixed even for customers of the bank. The interest rate for every personal loan application is based on various factors such as CIBIL score, applicants profession, income level, and relationship with the bank.
Lets discuss these factors affecting the personal loan interest rates in detail.
Don’t Miss: How Much Land Can You Buy With A Va Loan
Best For Debt Consolidation
Who’s this for? A is a good choice if you’re looking for a no-fee personal loan to finance debt consolidation.
When you’re approved for a Marcus debt consolidation loan, the company will ask you if you’d like to use direct payments to send money to up to 10 creditors, which helps ensure that funds are used to directly wipe out your debt. To choose this option, you will need to provide your creditors’ account numbers and addresses, as well as the amount you’d like paid. Marcus deposits anything that’s left over into your connected bank account.
There is no fee to use direct payments. You should continue making all required payments on your balance until you see your debt is paid off, even if you’ve already sent your loan money to a creditor. It may take as long as a billing cycle for the payments to be reflected on your account, but you don’t want to miss a payment by mistake and get hit with additional interest charges or late fees.
Marcus offers competitive APRs of 6.99% to 19.99% on its personal loans when you sign up for autopay. Term lengths vary from 36 to 72 months. It also offers a high-yield savings account with competitive APY, helping you both earn and save money where it counts.
Unlike LightStream, Marcus has a soft inquiry tool on its website, which allows you to look at possible loan options based on your credit report without impacting your credit score.
What Happens If You Cant Pay Back A Personal Loan On Time
Before you take out a personal loan, you should consider your situation and your ability to pay it back.
There can be serious consequences if you dont make your loan payment by the due date:
- your lender can request that you pay the full amount of the loan at once
- your lender might have the right to take something that you own, such as your car, if you have a secured loan
- your lender can report a missed payment to the credit bureaus, which could mean it will show up on your credit history and could hurt your ability to get credit in the future
- your lender will usually charge you a non-sufficient funds fee if you dont have enough money in your account to cover a payment that is supposed to be paid with a pre-authorized debit
- your lender could sue you for the debt
Act quickly if you are having trouble making repayments. If you cant make the full repayment, pay what you can. Contact your lender without delay.
Don’t Miss: Does The Capital One Pre Approval Car Loan Work
How To Increase Your Chances Of Getting Approved
When youre about to ask a lender for a personal loan, youll need to take extra care to make sure youre putting your best financial foot forward. Your job is to prove to lenders that you are a responsible borrower who can repay your debts.
While theres no one surefire way to ensure that you are approved for a personal loan, the following may help:
- Review the loans eligibility requirements before applying. Most lenders have specific requirements you need to meet in order to qualify. For example, they will state the minimum credit score or minimum employment income.
- Get your credit report. Your credit report gives a true record of your financial history. Lenders use it to judge how much they should lend you. You can order a free copy from a major credit bureau once a year. Correct any errors or discrepancies before applying for a loan.
- Improve your credit score first. This may not be an option if you need a loan now, but if you can wait half a year, increase your credit score by staying on top of all of your debt repayments, and paying down debts as much as you can to lower your debt-to-income ratio.
- Enlist a cosigner. A cosigner is someone with good finances who agrees to sign the loan with you. This can strengthen your loan application because they would be signing up to cover your loan payments should you default on them. If you have fair or bad credit, this could be a way for you to get approved for a personal loan.
