Learn how to get a personal loan with this step-by-step guide. It’s very common for people to need funds at some point, be it to consolidate debt, make home repairs, or just deal with unexpected expenses. That’s why personal loans exist! They give you access to money when you need it and can be used for anything (for the most part). It’s a type of loan that lets you borrow a fixed amount of money from a lender, like banks, credit unions or online lenders. What makes them different is that they don’t require collateral such as a house or car. In other words, they’re pretty handy! But before you go rushing off and applying for one, make sure you know what the process entails because the journey can get prettttyyy complex.
Step 1: Figure out your needs You gotta know exactly how much money you want and what’ll it be used for before applying for any loan. This will also help determine what terms are right for you and calculate your monthly payments.
Step 2: Know your credit score Credit score plays a major role in several things when it comes to loans – including whether or not you’ll get approved and what interest rate you’ll receive if approved. So check yours before starting the application process so that there aren’t any surprises come decision time.
Step 3: Shop around Just like clothes or shoes! There are many lenders who offer personal loans – banks, credit unions and online lenders being some examples – but each one will have different rates, fees and repayment terms. Plus there’s customer service aspects and other factors that might sway your decision on which one is best for your borrowing experience.
Step 4: Gather documentation Just like applying to college (speaking from experience) there is going to be paperwork involved here too. When applying for this loan specifically though, expect to need documents proving identity, income and other financial information such as pay stubs, tax returns and bank statements.
Step 5: Submit application Once you’ve gone through all the preparation steps, it’s finally time to hit apply. Depending on the lender you’re going with, this step may require an online application or in-person meeting at a branch. Be ready to share personal information, employment history, income and other financial info when doing so.
Step 6: Wait for approval Patience is key here because lenders will take their time reviewing your application before deciding whether or not to approve you. It could take days or even longer depending on the institution’s process. So don’t freak if you don’t hear anything right away! If they do need more info from you they’ll ask.
Step Seven: Accept the Loan. If you are approved for the loan, the lender will give you a contract that spells out the terms of the loan. This will include things like interest rates and any fees they’ll be charging you. You should go through all of this information thoroughly to make sure that it’s acceptable.
Step Eight: Get Your Money. Once you’ve decided that everything is good with your loan, sign off on it and then the lender will deposit your funds into your bank account.
Step Nine: Pay It Back. Like most loans, personal loans come with a repayment schedule. You’ll need to regularly repay your debts according to this schedule or else there could be late fees added as well as damage done to your credit score.
The Wrap Up:
The Personal Loan process can be straightforward if you’re prepared for it. By following these steps I’ve just laid out for you above, you can increase your chances of getting approved for a loan with favorable terms. It’s important to shop around for lenders and compare offers to find what works best for you financially before making any agreements that could negatively affect you in the long run.
