If you’re considering applying for a personal loan but don’t know where to start, we have some tips for you. You’ll first want to see what you might qualify for by reviewing your credit and researching your options based on where your credit stands. From there you’ll need to get together the necessary paperwork and apply for that loan.
Yes, it’s pretty much that simple — it’s even possible to be approved for a loan in less than 24 hours if you’re applying for a loan online — but there’s always a lot to consider when applying for a loan, particularly when you’re doing it online. That’s because there are some fraudsters who set up fake loan sites, so be sure to share your personal information only with lenders that you know for certain are reputable. You don’t want to become a victim of identity theft.
Step 1: Check Your Credit
As you begin the personal loan process, you’re going to want to check your credit. That’s because, whether or not you qualify for a personal loan will depend upon your creditworthiness. The interest rate you will be charged also will rely on where your credit stands.
You can start reviewing your credit by checking your credit score. You can get two free credit scores, updated every 14 days, at Credit.com. And if you haven’t checked your credit reports lately, you can request free copies of your credit reports from the three major credit bureaus through AnnualCreditReport.com. Review the content of your reports carefully and correct errors before shopping for a loan.
Step 2: Research Before You Apply
Every time you apply for a personal loan, it triggers an inquiry into your credit and this nudges down your credit score a little bit. So it’s a good idea be selective and apply only for loans that you actually qualify for. You can ask lenders in advance about the minimum credit score that they require for personal loans. Some lenders will even list this information on their websites.
Step 3: Get Everything You Need for the Loan Application
In addition to checking your credit score, a potential lender will want to ascertain your annual income as well as your debt-to-income ratio.
Other details you are likely to have to share on a loan application include your monthly housing payment, whether you rent or own your primary residence, the name of your employer and how long you’ve worked there.
Having this information at the ready can help to speed up the process of applying for a personal loan, whether in person or online.
Step 4: Start Local
A good place to begin your search for a personal loan is with your local bank or credit union. It’s a good idea to research the credit criteria required for personal loans before you apply. Check your bank or credit union’s website, or call their customer service. You may even want to make an appointment with a loan officer to discuss options.
Applying for a loan with an online lender is also an option. You can research loan options on Credit.com at your convenience, 24 hours a day.