What are personal loans and how you can get one
This is sponsored content for Jacaranda Finance.
Realistically speaking, no matter how careful you are in terms of managing your money, there are times when you'll fall short of cash to finance an emergency expense.
And, while you can apply for a traditional loan in the bank, it may not be an ideal option since the application process usually takes a lot of time. This is where personal loans come to the rescue. Whether you have to pay a medical bill or finance an urgent home repair, you can have personal loans to help you.
Keep reading this article to learn more about personal loans and a few tips on how to get one for your financial needs.
What are personal loans?
A personal loan refers to funds you borrow from a bank, online lender, or credit union, and which should be paid back in installments or fixed monthly repayments. It can be taken out by a qualified borrower for almost any purpose. This means that the lender doesn't mind as to how you're going to use the loan.
Also, while there are secured personal loans, most of these loans are unsecured because they don't require any collateral as security for the money you've borrowed. But, since they're unsecured loans, you should have a good credit score rating and a stable income source to increase your chances of loan approval.
On the other hand, if you have plans of getting a personal loan, then, you should take some factors into consideration. This is to make sure that you get the most out of your borrowed money, while getting out of a financial trouble without ending up with additional burdens.
The factors to be considered are as follows:
- Interest rates - Typically, most personal loans come with fixed interest rates, but your actual interest rate may still depend on your credit. This means that when you have a good credit rating, you may be able to avail of lower interest rates for your loan.
- Repayment period - Most personal loans come with flexible repayment time, ranging from one year to seven years, depending on your lender. Unlike the credit cards, you can lower the amount of money you shell out for your interests since you're provided with a definite payoff date.
How can you get a personal loan?
Now that you know what personal loans are, it's time to get familiar with how you can get one for your financial needs. Below are some ways to take out a personal loan:
1. Find the right lender
If you're looking for a personal loan that'll not take you long to pay off, you may be interested in learning how to find a reputable personal loan lender, like Jacaranda Finance. With the right lender, you can make sure you're getting the best loan to fit your needs. This is the type of loan that can help you pay for an emergency, without ending up paying hefty fees and interest rates in the long run.
However, when looking for a personal loan lender, consider the one with good reviews on their website. In most cases, it's a good idea to visit the websites of a few different lenders in order to see which ones offer the best deals, as well as compare their interest rates and repayment plans.
Moreover, find time to understand all of the terms and conditions that are associated with your loan. Not only that, but you should also be aware of any hidden fees that may come up and any restrictions that may apply to your loan, such as the amount of time that you can borrow. In short, always ensure that you understand all the essential details before signing any paperwork.
2. Check your qualifications
When you decide to apply for personal loans, it's important to know and check your qualifications before moving to the next step. Generally, most personal loan providers require some requirements before you can get approved for a loan. For example, some of the qualifications include being of legal age, permanent residence address, an active bank account, good credit score, and, in some cases, a stable source of income.
Thus, if you want to ensure you're qualified for the specific type of personal loan you're getting, check the lender's list of requirements first. That way, you can save time and energy looking for the right loan for you.
3. Check your credit score
When you're looking for a personal loan, another thing you need to check is your credit score. Typically, many people are concerned with their credit score because it determines what interest rate they'll pay, as well as what fees they'll have to pay for the loan. Also, some lenders may want to check your credit score to know whether you're a good risk to lend to.
For example, if you have poor credit score, they'll not be willing to give you a personal loan. However, they may be willing to give you other options that suit your credit score. That's why if you're worried about your credit score and your chances of getting a loan approval, you should start checking your credit score on a regular basis. That way, you'll know whether your score has improved or whether there are some mistakes on your credit report.
Lastly, you should also take note that checking your credit score once in a while can be one of the best ways to protect your interests from the debt traps of the financial system.
Bottom line
If you're having a financial emergency, taking out a personal loan can be an excellent idea. Luckily, getting one won't be difficult if you keep all the information mentioned above in mind. So, if you want to solve a sudden financial problem right away, start looking for a personal loan now that will work best for you and your needs.
This is sponsored content for Jacaranda Finance.
