When you need extra money to cover your expenses or to pay a large purchase initially, you can consider a personal loan. If this is an option you are considering, it’s a good idea to know how to do it properly. In this article, we will give you tips on how to apply for a loan and share some tips on how to choose the right type of loan for your needs.
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Although we check your credit, we do not conduct credit checks with traditional credit bureaus so your application does not affect your credit score. Plus, we know you’re more than just your credit report. So you can apply even if you have bad credit.
What you need to know if you need to apply for a loan
If you decide to apply for a loan, you must know certain things. First, you should explore all your options. For example, you may be considering a personal loan, but did you know that there are several types?
The different types of personal loans each have advantages and disadvantages, and their respective advantages and disadvantages can be very different. Even among loans of the same type, the conditions may differ from one lender to another.
Credit scores and interest rates
When applying for a loan, your credit score can play an important role in terms of the type of personal loan you can get and the interest rates that will be offered to you. If you have a good credit score, you will usually be able to get a personal loan with a lower annual percentage rate (APR). However, if your credit score is not excellent, loans with a higher APR may be available. It depends on your lender and your credit profile.
The duration of your loan is also taken into account in your APR. Long-term installment loans tend to have a lower APR than shorter installment loans. However, with installment loans, you will make many more interest payments, which can accumulate over time. Conversely, interest rates for short-term single-payment loans tend to be higher, but as their name indicates, you will only make one payment.
Apply for a loan: the loan application process explained
To apply for a loan from a traditional lender such as a bank, you will usually be asked to provide proof of income. Your lender will also establish your credit score and may view your credit report. This information is often provided in person, but you may be able to submit an online application based on your bank.
You will usually have a decision in a few days and your money soon after, but the length of the process may vary depending on your lender.
Online loans tend to be processed a little faster than those provided by traditional lenders. In addition, online loan providers generally offer convenient online applications. However, the application process will again depend on the lender.