How to Get a Personal Loan?

If you are facing some unexpected expenses like a medical bill or a house repair that your budget does not account for, you may be looking for alternate ways to get some cash. A personal loan can help you pay for such expenses by offering you instant cash.

But how to get a personal loan? If you have never applied for a personal loan before, this step-by-step guide is just what you need to get started. Continue reading to find out how to obtain a personal loan in a few simple steps.

How to Get a Personal Loan? A Step-by-Step Guide

Personal loans allow you to get instant access to cash to meet your urgent needs. Whether it’s an unforeseen wedding expense, a tuition fee, or an emergency repair that you need to pay for, knowing how to get a personal loan can help speed up your application process.

Follow these steps to apply for a personal loan:

Step 1: Review Your Credit Portfolio

The first step towards getting a personal loan involves checking your credit score. It should be at least 650 or higher for better chances of loan approval. 

A few factors that improve your credit score are making timely payments on your loan debts and credit card bills, and diversifying your credit portfolio.

If you feel like your credit score is not correctly reported, you can request a credit report from Experian, TransUnion, or other credit bureaus. If you find any errors, you can dispute the inaccuracies to fix your credit score.

Step 2: Make the Necessary Calculations

The next step involves calculating your monthly loan payments so you can determine if a personal loan is the way to go for you. 

Find out how much money you need to lend and make sure it includes any and all the fees involved in the application, including the origination fee which can be anywhere between 1% to 10%. This fee is deducted from your loan amount so you don’t need to worry about paying it before the loan approval.

Now determine the annual percentage rate (APR) that your lender may charge on your loan. Your APR will depend on your credit score and your overall credit portfolio.

Below, we have listed estimated APRs depending on your credit score range:

• Bad credit score (300-629): 21.74% APR
• Fair credit score (630-689): 18.69% APR
• Good credit score (690-719): 14.84% APR
• Excellent credit score (720-850): 12.64% APR

Do note that these rates are only estimates. The exact APR is determined by your specific lender.

Once you have determined the amount of money you want to lend and the estimated APR, figure out the length of your loan term. 

A shorter loan term means higher monthly payments but with less money spent on interest. A longer loan term means lower monthly payments but with more money spent on interest by the end of the term. 

Finally, use a personal loan calculator to calculate your monthly payouts so you can make the right decision.

Step 3: Look for Lenders

The next step involves looking for lenders. You can either go to banks or find online lenders by searching for “personal loans near me”. There are many lenders offering low-interest personal loans online.

While banks may work for some people, online lenders are ideal for most as they also accept bad credit and have very easy loan terms. But try to research multiple lenders so you can get the best loan for your needs.

Here’s what you should look for when comparing different lenders:

• Loan amount limit
• Repayment terms
• Credit score requirements
• Interest rate
• Funding time
• Cosigner or joint loan availability

Step 4: Get Your Pre-Qualification Done

Once you have compared a few lenders, get your pre-qualification done to review multiple loan offers. This will allow you to compare the monthly payouts and estimated interest rates of different lenders. The best loan offer is the one that offers the lowest APR.

Your lenders will run a soft credit check for pre-qualification to check your credit portfolio. They will require your personal information, income details, and your intended purpose for the loan to determine your credibility.

Step 5: Select an Offer

Once you have pre-qualified for multiple loans, you can select the best offer according to your needs and apply for a loan. To apply, you will need your identification details, verification of your residence, and proof of income. 

In order to accept your loan application, your lender will get a hard credit check done. Do note that a hard credit check can temporarily decrease your credit score. After that, they may either respond immediately or take a few days to approve your loan application.

Cash in Minutes offers same-day loan approvals and funding to help you meet your immediate cash needs.

Step 6: Review and Sign the Loan Agreement

Once your lender approves your loan application, review the loan terms carefully. Check all the fees involved, such as late payment and origination fees, and find out if there is any prepayment penalty. 

You should also determine the total cost of your loan, including the APR. Moreover, if you are setting up automatic payments, make sure to set a low-balance alert with your bank so that there are no overdrafts.

After reviewing all the terms, it’s time to sign the loan agreement. While some lenders like Cash in Minutes offer same-day funding, others may take a week or so to transfer funds.

Conclusion

So that’s all, folks! This guide covers everything you will need to acquire a personal loan. It is usually a simple and hassle-free process that you can even carry out online. What’s more, if you have bad credit, you don’t need to worry about your loan application getting rejected because most online lenders accept bad credit borrowers. 

Just make sure to check the APR on your loan before making a final decision. Good luck!

Frequently Asked Questions (FAQs)

How to Get a Personal Loan with Bad Credit?

To get a bad credit loan, you can apply online on Cash in Minute’s website or walk into one of their offices in Provo City, Kearns, Pleasant Grove, Midvale City, South Jordan, or Salt Lake City. You can also consider enlisting a co-signer with a good credit score to improve your chances of loan approval.

How Long Does It Take to Get a Personal Loan?

It typically takes a week to receive your personal loan funding in your bank account. However, Cash in Minutes offers same-day approvals and funding to help you meet your immediate cash needs.

How to Get Approved for a Personal Loan?

You can increase your chances of acquiring a personal loan by prequalifying for a loan. You can also review your credit report and fix any errors that may be showing a lower credit score. What’s more, in case of bad credit, you can enlist a cosigner with a good credit score to improve your chances of loan approval.