Getting a personal loan is easy, but finding the best way to get a personal loan is a bit harder. There are many lenders to get a personal loan from. So, you will need to consider a few things before you take your loan out.
In your search for a personal loan, you will come across different kinds of lenders. Banks, credit unions, and alternative lenders each offer their own benefits. The key is knowing how to deal with these lenders and the offers they make.
Sometimes, your options will be more limited. If you have a low income and a low credit score, the unfortunate reality is you will have fewer choices. So, let’s first go over the basics when it comes to lenders. Then, we will give you a simple process for choosing a personal loan.
What Do You Need From Your Personal Loan?
First, you will need to figure out what your requirements for a loan are. For example, if you have bad credit, you will first need to find a lender that would offer you a loan with decent rates. On the other hand, if your credit score is fine but you want the lowest rates possible, you will need to take some time to compare the many rates you will be offered. If you don’t have much time, then there are always fewer options available to you.
Because there are so many personal loan options, the first step is shortlisting the right loans for you. So, let’s look into the places you can get a loan and go over their pros and cons.
The Best Ways To Get A Personal Loan
Banks
Your local bank is the first place that comes to mind most of the time. Banks can give out personal term loans, personal lines of credit, and credit cards. They will provide good rates and offer strong, personal service.
If your credit score is good, you can get some of the best rates available at a bank. While each state will have its own maximum interest rates, you will almost always be able to access a personal loan with less than 10% interest. However, even if you have bad credit, banks have the added benefit of personal service. You can meet an employee to discuss your banking history and your needs.
If you go to a bank that you already have accounts open with, they will have information on your finances and a vested interest in keeping you with them. If you don’t have an account with the bank you want a loan from, you will likely need to get one.
Banks are great lenders overall, but they aren’t perfect. Their only real downside is they are not the quickest or convenient option. If you need a fast loan in an emergency, you will have to wait longer than you would with other options. This is why getting a credit card through your bank in advance is a good idea.
Credit Unions
Credit unions are another traditional financing option worth looking into. They offer very low rates that are often even better than bank loan rates. However, they have membership requirements and are not the easiest lenders to gain access to. Membership requirements will usually include working in a specific industry or living in a certain area.
Alternative Lenders
There are several types of alternative lenders. Most of them can be found online.
| Personal Lender | Minimum Credit | Minimum Income | Proof of Citizenship | Next Steps |
|---|---|---|---|---|
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550+ | N/A | U.S. Citizen or Green Card | Shop Deals |
 |
Bad Credit OK | $800 per Month | U.S. Citizen | Apply Here |
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Bad Credit OK | $1500 per month | U.S. Citizen | Apply Here |
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Bad Credit OK | N/A | U.S. Citizen | See if you qualify |
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Bad Credit OK | N/A | U.S. Citizen or Permanent Resident | See if you qualify |
Online Lenders
With alternative lenders overall, you can expect higher rates than you would get from a bank. If you have very bad credit, many alternative lenders will still give you a loan quickly. The main difference is that they will charge much higher rates for any borrower that doesn’t have a high credit score. Online lenders typically charge worse rates overall, but if you have a very good credit score you can still get good rates online.
Online lenders are fast and convenient to use. The fastest online loans can be approved in a few hours. Then, the money can often be sent to you the next business day. Application processes are impersonal, as these lenders will just want to assess some of your financial information and offer you a rate.
Online personal lending is a very diverse industry. So, if you want to look for an alternative loan online, be sure to compare rates and only choose credible lenders.
Payday Lenders
Payday lenders are the fastest lenders you will find, but they are an extremely risky option. While payday loans are becoming more popular, they are only doing so because they are always fast when people need money the most. However, you should avoid going near them unless you are in a genuine financial emergency that you can pay your way out of soon. APRs on payday loans often go over 199%.
The Best Way To Get A Personal Loan
The best way to get a personal loan is through a simple process of deduction.
Decide What You Need
If you want the best rates, go to a bank. If you have the time, try to find out what credit unions you may qualify for.
If you are in a big rush, there are some alternative lenders online who can get you the money you need in just a few days. Try alternative online lenders with fast approval before resorting to payday loans.
Compare Rates
Comparing rates for personal loans is easy. Because you can send applications without an obligation to take a loan, try applying to multiple lenders. Compare their offers and choose the one that offers the best rates you can find.
