Looking For A Personal Loan
Getting a personal loan is quite easy nowadays. You don’t have to dress up all fancy and go to your bank anymore. You can just apply for a personal loan online from the comfort of your desk chair in your pajamas without ever leaving the house. You can just google ‘borrow money online’ or compare the different loan providers enlisted and featured on this website.
Borrowing money online is done with a few mouse clicks. Simply decide how much you want to hire, when you think you can pay back (select a loan duration) and what you need the money for. Then compare the different loan providers that show up in the comparison module and choose the one with the lowest rates and best terms for your situation.
Determine how much money you need
Decide for yourself which loan amount you will apply for. Take into account the possible short-term income and expenses. Avoid using for multiple credits in a short period. Check what your credit score allows you to borrow and try to acquire; likewise, it doesn’t decrease your credit score. Also, don’t take out a personal loan for unnecessary items or stuff. Although no collateral is asked and one can use a personal loan for basically anything, don’t ever borrow just because you can. You might end up in a never-ending debt spiral doing so.
Choose a loan type
It is essential to find the loan that best fits your project and your budget. Always keep in mind your budget and always check whether you will have the option to repay this new credit every month. As you might have read in other articles on our website, it’s quite smart to take out a personal loan to consolidate credit card or revolving credit debt, but it’s not smart to take a personal loan to postpone debt. Make sure your debt-to-income ratio is never higher than a third.
Compare the different rates
Don’t just take the first loan offer you can get. Just like you would do when buying normal things online: do your research, shop around and compare different banks and loan providers. Make use of online simulation tools, with which you can calculate your loan online and immediately find the cheapest rate for every type of credit and formula.
Read the terms and conditions
One of the things most overlooked is the terms and conditions of personal loans. People tend to look too much or even stare themselves blind on the yearly interest rates (APR), but most often forget to read the terms and fine print. Things that are usually only outlined in the fine print and terms and conditions are: can you pay back early penalty-free? What if you miss an installment, are there any other fees, taxes, or penalties?
Our advice is to make it into a habit reading terms and conditions and fine print. Not just in the case of borrowing money but in the case of every contract you ever have to sign. This will make you a way more aware and smarter business person.
Decide how long you will pay (loan duration period)
Decide how long the duration of the loan will be. A long term reduces the monthly burden that you pay each month but increases the total cost of the loan and, therefore, the amount of interest paid at the end of your investment. Try to find the right mix between loan duration and monthly installments so that you always have enough money to pay your monthly bills and payments without ever having to worry. Make sure that your debt-to-income ratio doesn’t get too high. You might want to consider a co-signer if you doubt your financial situation is going to stay the same for the duration of the loan.
How long does it take to apply for a personal loan?
If you want to borrow money, the procedure is the same for almost every loan provider: It starts with you (online) applying for a loan. Then the lender evaluates the application. Upon approval, you often receive the quote by e-mail within one working day. Prefer the quote by mail? Then it usually takes a day or two until you get it.
How long does loan approval take?
You then send the quotation, with your signature, together with additional documents (such as a copy of proof of identity, salary details, etc.) to the lender. When they receive the data, they will process it – if possible – immediately. You usually have the loan amount in your bank account within one working day. Often you will also receive a confirmation with an explanation about your loan.
Can you take out a personal loan as an older person?
Different providers apply a maximum age at which you must have repaid the personal loan. So they assume, for example, that you must have repaid the mortgage at the age of 75. If you are 65, then you can borrow for a maximum of ten more years, if you are 70 then a maximum of five years. Other providers say they do not allow clients older than 60. Retired people can usually show very clearly what income they will have in the coming years.
On the other hand, the risk of death is a risk that is taken into account. Personal loans often have no collateral, and they are so-called “blank loans.” Financiers do not want to depend on the legacy of a borrower. That gives too much uncertainty.
Now that you know how to get a personal loan and what to look out for and read in the contracts, you will be getting offered, its time to compare different loan providers and banks. You might want to read our article: Best Loan Providers 2020, to get a glimpse of the best possible loans and credits for different situations this year.