3 STEPS FOR CHOOSING THE BEST PERSONAL LOAN PROVIDER

And I don’t mean looking at the websites and looking for “good-to-hear” promises of instant funding. You need a secure lender that fits your needs.

In this guide we’ll provide you the steps to choose the best personal loan provider. This will help you get the financial help you need while staying secure long term.

STEP 1: Identify the purpose for borrowing

When taking out a personal loan, one question to ask yourself is “Do you have a real reason to get a personal loan?”

When I say real, is it a necessity to apply for a loan? Is this for a house, your first car, your wedding, emergency medical bills or whatnot?

People struggle for more than 8 years with piled personal loans. Their quality of life depleted, and they’re always stress. It’s safe to say that getting a personal loan, no matter how small is nothing minor. The consequences can be life-changing. So only borrow what you need and what you’re able to pay back in the future.

Once you know the purpose for borrowing it’ll be easier to recognize the best personal loan provider.

For example, if you’re a student who wants to take out loans, SoFi might be the best choice for you. If you’re using the loan for credit card consolidation, Payoff might be the best choice. Different loan providers have different focuses. Some focus on debt consolidation, car payments, student loans, medical bills and so much more. Hence, to choose the best loan provider, know your purpose.

STEP 2: Identify the amount you need

There’s a limit to how much you can borrow for unsecured loans. Unsecured personal loans are perceived as riskier than secured personal loans. Hence, most unsecured personal loans can offer only up to $50 000.

If you need more money than that, it will depend on your credit history, credit score, and financial status at the moment.

If your record looks great and you’re only gonna borrow less than $50 000, then you should consider loan providers under unsecured personal loans. But, if your record does not qualify the demands of unsecured personal loans then secured personal loans might be best for you.

This is encouraged especially if you’re going to borrow money worth more than $100 000. They let you borrow a bigger amount because there’s lesser risk. You’re going to be offering a collateral, such as your house mortgages, equity lending or car.

STEP 3: Compare rates and offers

When borrowing money, different money lenders have varying interest rates. It’s common-sense to choose the one with the smallest interest rate. The interest rates vary depending on your credit history too. Hence it’s important to find the one that best suits you. There are loan providers for those with credit scores below 660, and loan providers for those with excellent credit scores.

Another thing to consider is how long the term of payment is going to be. A payment term of five years has a smaller fixed monthly payment compared to a payment term of two years.

If you consider a longer term, find the loan provider or private lender that grants that. But it’s also important to note that at times, the longer the tenure of loan the bigger the interest.

Overall, be thorough with the loan providers. Go through their policies and investigate on any hidden fees. Check what their policies on missed payments and how much are their penalties. Also check for the processing charges.