A Brief History
With the growth of digital financing, especially in the late part of the 1900s, the entire personal loan application process has evolved drastically. Instead of waiting for long hours at the bank just to see if you’re eligible to apply for a personal loan, many banks, lenders, and credit unions nowadays allow you to check the eligibility criteria and apply for a loan online in just a matter of minutes but the evolution of personal loans does not stop here.
Below are some of the other ways that make personal loans much easier in our modern world.
More Personal Loan Options
The standards used to determine your eligibility to qualify for a personal loan can vary from one bank and lender to another but the general criteria include your age, employment type, minimum net income, credit history, and current credit score. Depending on these factors and the amount of money you need to borrow, you can browse the different loan options available to you.
Back in the day, there was practically no way for you to borrow money if you had a bad credit score but with the rise of peer-to-peer lending and credit unions, you can now apply for a bad credit personal loan online even if your credit score does not qualify you for a traditional one; however, as with any type of loans, personal loans for bad credit do come with their share of disadvantages.
Although the right personal loan for bad credit can be a great way to acquire extra cash, this kind of loan typically comes with higher interest rates which can be too expensive for some borrowers. To know more about the pros and cons of bad credit personal loans, you can head here where you will also get a better understanding of how the application process works. A word to the wise; before sharing your personal information with lenders online, particularly those who only target borrowers with poor credit, it pays to be a little skeptical because some lenders will take advantage of your rough situation and charge you ridiculously high-interest rates that make it nearly impossible for you to repay the loan back.
Personal Loan Shopping Has Never Been Easier
To get the best deal on your personal loan, you should not just accept the first-rate you’re offered by a lender or a bank. Instead, you should shop around and compare rates before you commit. Thanks to the internet, you can now easily and quickly compare multiple loan options with varying competitive rates from different lenders so you can make a sound financial decision. There are even websites that compare multiple loans for you based on the criteria you’re looking for.
Moreover, you can now use an online loan calculator to determine the monthly payments on a loan before you actually apply for it. All you have to do is simply enter the term and amount of the loan in addition to the interest rate and voila! The online calculator will do the complicated math for you. This will not only calculate the sum of your monthly loan payments but it’ll also calculate the estimated time it will take you to pay off the loan with these fixed payments.
You Can Even Apply For a Personal Loan Online
After you’ve compared rates and picked the best loan for your particular situation, comes the official application process. This is typically the most complicated part but luckily, you can now submit your personal loan application and get loan approval online from the comfort of your own home. Rather than wasting hours digging up an infinite number of documents, online lenders can now easily analyze your credit standards with the help of advanced software. As a result, you can get access to funds much easier and faster. In many cases, especially those involving unsecured personal loans, you can even get loan approval and have the funds deposited into your account within the same day.
Additionally, many lenders nowadays will also allow you to pre-qualify for a personal loan after they run a credit check. The trick here is to make sure that the lender conducts a soft credit inquiry because, unlike hard credit inquiries, soft credit inquiries don’t affect your credit score.
As you can see, getting a personal loan is a lot easier than it ever was. You just need to understand the different kinds of loans available to you based on your current situation and take the time to shop around for the best-suited one for you. Although it might be the most convenient answer to your financial problems, it is important to keep in mind that a personal loan will have to be paid back eventually regardless of how dire the circumstances may be. So, before you take out a personal loan, make certain that your need for a loan outweighs the interest rates you will inevitably have to pay and be sure to utilize this financial resource responsibly.
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For more information, please see…
Maljak, Lois, Ralph R. Roberts, et al. Loan Modification For Dummies. For Dummies, 2009.