FAQ's
- How much can I get approved for?
This varies from lender to lender. You would need to reach out to one of our listed partners for further information on that, taking into consideration all of the above-listed information.
- What is an APR?
APR stands for annual percentage rate. It takes into consideration the charges, fees, and payments to identify what the loan will cost you per year. The lower the APR, the less you are going to pay in the long haul.
- How do interest rates work?
Interest rates are how much you will be charged from a lender on top of the initial loan. It is calculated as a percentage of the amount you borrow. For example, if you take out a loan for $5000 with an interest rate of 10%, you’ll end up paying $6000 over the fixed timeline.
- What affects the interest rates I may be charged?
Normally the three main criteria that determine your interest rate are whether it’s a fixed loan or open-ended. (meaning you can pay it off at any time in full and save on the future interest you’d otherwise be incurring). Your credit score certainly has an impact on your rate as well. And finally, the length of time you take to pay back the loan. If you opt for a shorter payback period with higher payments, you are most likely to safe on interest.
- What if I have bad credit?
If you have a bad credit rating, then you are, of course, deemed riskier to lenders. This does not mean that you will then have no chance of securing a loan. Many lenders cater to those with bad credit, but the criteria and interest rates of the said loan may change.
Usually, a score under 600 is considered to be a bad credit rating. If this is where you fall, then you may want to prepare your self to be paying up to 30% interest on your loan. Again, this varies from case to case, lender to lender. Always read the terms and conditions carefully.
A final option that most lenders would allow is that of having someone co-sign on your loan. This holds them responsible in the case of non-payment on your part.
- What exactly is my credit score?
Your credit score is calculated based on your credit card balances, usage, existing loans, repayment history, along with other financial factors that could hurt your credit history such as a past bankruptcy or delinquent accounts.
In most cases, the higher your credit score, the more likely you will be approved for a loan. You will also most likely benefit from lower interest rates.
- What are the different Types of Lenders
- Direct lenders
This would be a company that directly loans money to borrowers, no middlemen.
- Marketplaces
When creating an online marketplace, borrowers can apply to all types of lenders at the same time, often with a straightforward application. Here you are not merely working with one individual company.
- Private Lenders
Self-explanatory, private individuals who loan money, more often than not, at a higher rate than other lenders. Keep in mind as an individual; they also incur more risks.
- Peer-to-Peer lenders
P2P lending allows lenders to in small-scale loans, typically spread out across a large number of borrowers, thus, significantly lowering their risk.
- Banks
This is where you should always start. If you have an established relationship with your bank and good credit, try them first. The rates from banks will almost always beat that of other lending options.
