Taking Out A Personal Loan: 5 Important Factors To Consider

13 August of 2015

Raising money to pay off old debts, invest in a new business, or to buy yourself that dream car you’ve always wanted can be a challenging task to say the least. Securing a personal loan is a great way to stagger the payments over a long period of time instead of saving your pennies for years and years. However, there are a number of factors that can increase your chances of securing a personal bank loan and prevent any unnecessary headaches from occurring.

  1. Get your credit report. As soon as humanly possible, you’ll need to access your credit report from one of the three major credit reporting agencies: Experian, Equifax or TransUnion. Your credit report will not only let you know your credit score, which is all important when applying for a personal loan, but it’ll also shed light on how you have the score that you have by letting you know what unpaid debts you’ve had in the past. The higher your score, the less interest you’re likely to pay, and the lower your score, the fewer chances you’ll have at being denied a personal loan from your bank or lending agency.
  2. Check for discrepancies. Knowing your credit score and getting the full report is one thing, but running through the report with a fine-toothed comb is another thing entirely. In a lot of cases these credit reports have false and incorrect information that could be lowering your credit score significantly. If you find some erroneous information, then it’s important to file a correction as soon as possible as it can take a few months for these corrections to be made.
  3. Choose the right kind of loan. There are such a vast number of different kinds of loans out there today that it can be quite overwhelming. Different kinds of loans can be used for different purposes and not all loans are suited to everyone so it’s very important to do your research beforehand. If you’re looking for a car title loan then you’ll want to go with someone like TitleBucks rather than for a traditional bank loan. Understanding which loan is suited to your specific need will save you a lot of time and hassle in the long run.
  4. Take your time. The loan application process can take quite a bit of time, so you need to be prepared for this. Rushing into an agreement willy-nilly will usually result in a high interest rate and a long-term commitment, which are two red flags to steer clear of when looking for a loan. Gathering all the appropriate documentation in itself is an arduous task and it can’t be stressed enough how important it is to gather all of this as far in advance as possible. So create a checklist of everything you need and work your way through it as soon as you can.
  5. Beware of hidden fees. Often a lender will lure you in to a loan with a very low interest rate. This is a very attractive offer, but you’re going to want to make sure that there aren’t any hidden fees tucked beneath the surface and in the fine print. A lot of times a lender will make up for the low interest rate with these additional fees, so be cautious when you sign on the dotted line.
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