Personal loans give you the freedom to refinance your debt or pay off big purchases in one lump sum. And LendingTree, a loan comparison website, gives you the power to compare up to five offers from lenders at once; you’ll only need to complete an online form.
The less you pay in interest, the quicker you can pay off the principal of the loan and ultimately the less you will pay for the loan over time. This should be one of your top priorities when choosing a loan.
The terms of the loan refer to:
• The amount you can borrow
• The interest rate
• The length of the loan
• Any fees associated with the loan
For example, some lenders charge a prepayment penalty if you pay off the loan before its maturity. Other lenders may be more flexible, letting you pay back the loan early or even work out a payment plan that fits your financial situation.
A personal loan with flexible terms has the benefit of adapting to the borrower’s needs. Since personal loans are repaid over a relatively long period of time, sometimes up to five years or more, this offers a bit of wiggle room to help you pay more toward the loan and pay it off sooner.
Would you eat at a restaurant with terrible reviews? Probably not. It’s good to be picky sometimes ー especially when it comes to how you spend your money. It only makes sense that you should use the same scrutiny when applying for a personal loan.
Follow the links above to browse personal loan lender reviews.
You’ll want to know exactly how much everything is going to cost before you sign a personal loan agreement.
Origination fees, which typically cost about 1% to 8% of the loan amount. Many lenders do not charge origination fees, so avoid paying them if possible.
Prepayment penalties, which some lenders charge if you pay off a loan before maturity. The penalty is usually a percentage of the remaining balance.
Again, many lenders do not charge origination fees or prepayment penalties. Do your research to find a no-fee personal loan that works for you.
Some lenders will get you the funds you need the same day your application is approved or the following day, while others may take a week or longer. If you need money fast, find a lender that offers quick funding.
Online banking makes it easier than ever to transfer funds, pay bills and borrow money. If you have a smartphone, you can even apply for a personal loan and manage your payments right in the palm of your hands. Tech-savvy borrowers should consider looking for a lender that offers convenient features like:
• Mobile app
• 24/7 customer service
• Autopay
Some lenders may offer extra incentives to entice top-tier borrowers. Take SoFi for example, which offers an unemployment protection program. Through this program, borrowers who lose their jobs through no fault of their own (and whose loans are in good standing) are eligible to apply for forbearance, which means that their monthly payments are temporarily suspended. The program is offered in three-month periods, up to 12 months. During this period, interest is still accrued and added onto the principal of the account. But borrowers can rest easy during their unemployment without having to worry about their accounts being sent to collections.
When you start applying for personal loans, lenders will want to have a rough idea of your credit score, particularly if you want to get prequalified and estimate your APR. The three major credit bureaus ー Equifax, TransUnion and Experian ー are required to give you a free comprehensive credit report annually. Request yours at AnnualCreditReport.com.
You can use a personal loan to pay for virtually anything. But just because you can get the funding you need to make a purchase doesn’t mean that you should borrow money.
Debt consolidation
Credit card refinancing
Home improvement
Medical bills
Wedding expenses
Car financing
Moving and relocation
Lenders will want to know why you are taking out a personal loan. Before you get ready to apply, make sure your reasoning for taking out a personal loan is crystal clear.
Get a rough idea of how much money you need to borrow before you start applying for personal loans. For example, a couple taking out a personal loan to pay for their wedding could get an idea of how much they’ll spend by asking vendors for quotes.
If you’re taking out a personal loan for debt consolidation, you’ll want to reference that credit report you requested. Your credit report will list all debts that are taken out in your name, so you can add them up and determine the amount you need to borrow. You could also refer to your credit card billing statement or call your creditors to learn the payoff amount.
Since you’ll be paying interest on the entire loan amount, it’s best to find a loan that’s just the right amount. If you take out much more than you need, then you’ll end up paying interest on money you didn’t need to borrow.
When you’re borrowing money, be transparent with yourself about your finances. You don’t want to get in over your head with a personal loan that you can’t afford to pay back. If you default on your loan, then you risk lowering your credit score. Before you borrow, think about where you stand financially and where you expect to see yourself in the near future.
To estimate your monthly payment based on your credit score and the amount of money you need to borrow, check out LendingTree’s personal loan calculator.