Four essential things to know before applying for a personal loan
InvestigateTV – Personal loans can be a useful financial tool for financing home renovations, consolidating credit cards, or managing an emergency.
Most personal loans are unsecured, which means you don’t need collateral, such as a car or a house. If this is what you need, there are several steps you can take to get a loan like this.
Our financial site partners NerdWallet helped us compile this list.
Check your credit score: A high score gives you the best chance of not only qualifying, but also getting a lower interest rate. A good credit score is 690 or higher, and an excellent score is 720 or higher. You can check your score for free at AnnualCreditReport.com.
Calculate how much to borrow: Do not borrow more than necessary. A higher loan amount has more interest and higher monthly payments.
Do your research: Compare estimated rates to determine how much you should owe each month and make sure it stays within your budget.
Get pre-qualified if you can: It will give you an overview of the offers you may receive. You will need to be able to answer a few questions such as the purpose of your loan, the loan amount, your income and how much you already owe.
Once you’ve followed the steps above, shop around. Online lenders, banks, and credit unions offer safe, unsecured loans. Compare your prequalified offers with loan amounts, monthly payments and interest rates from various lenders to get the best loan deal.
Finally, always read the fine print to make sure you understand the exact terms and payment schedule.
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