Personal loans are a great way to tide you over after a large expense or during more expensive times of the year. Depending on how much you need to borrow, you may find many lenders can offer you a loan, but terms and interest rates can vary widely.
To get the best loan for your needs, make sure you check the calendar, offerings close to home, and any offerings that may help you manage your particular credit challenges.
Keep an Eye on the Calendar
When you’re looking for a personal loan, be aware that you may be able to get better terms around expensive times of the year. For example, the December holiday season and summer break may be a great time to look for a personal loan. Your bank or credit union may offer specials during these times of greater spending.
If you have recently left training and gotten a full-time job, you may have great money coming in but poor or no credit history. This is the time to direct your personal loan request to the bank where your checks get direct deposited.
Depending on the size of the bank and the service options available, you may be able to set up payments that pull directly out of your checking account. This can help the bank feel more secure and get you a better interest rate.
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Ask for a Soft Pull
A hard pull on your credit history will lower your credit rating a bit. Depending on your current rating, just a few points can drop you into a lower bracket and lessen your ability to borrow with a personal loan.
While you’re shopping for personal loans, make sure you also talk to your bank or credit union. If your financial history over the last three years is particularly rocky, you may want to check with a local credit union about a credit-building loan. These loans allow you to
- build a healthy payment history
- build savings
- increase your credit score by getting a positive report each month
If you absolutely cannot qualify for a personal loan that doesn’t have an exorbitant interest rate, it may be time to visit a reputable credit repair team.
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Credit Score is King
According to Lantern by SoFi, your credit score will have the largest impact on your interest rate. Before you try to compare personal loan rates, take a look at your credit rating and pay special attention to
- late payment dings
- accounts that are maxed out, such as credit cards
- foreclosures or repossessions
Because personal loans are unsecured, your payment history and money management history will have a huge impact on available monies. If your credit history is not good, be prepared for a high-interest rate.
Once you start applying for personal loans, you may be inundated with offers. Make sure that all of these comparisons are soft pulls. If you can’t find a loan that works for you, consider a conversation with a credit repair team.