Learn How to Get a Personal Loan in 8 Steps
3. Think about your alternatives
Depending on your creditworthiness, you may require a co-signer to get approved for a low-interest personal loan. If you are unable to find a co-signer or the lenders you are considering do not allow co-signers, you may be able to obtain a secured personal loan rather than an unsecured one.
In exchange for better terms, secured loans need collateral, such as a car, a house, or cash in a savings account or certificate of deposit. If you do not return the loan, the lender has the right to confiscate the collateral to cover the debt.
You’ll also need to consider where you can receive a personal loan. If you have bad credit, you may have difficulty getting authorized by traditional banks. Some internet lenders, on the other hand, specialize in working with bad-credit applicants, and some credit unions offer short-term loans that are less expensive than payday loans.
If you don’t meet, the standard standards and your purchase can wait, work on improving your credit score so you can qualify.
Takeaway: If you don’t satisfy the qualification standards for a reasonable interest rate and need a loan right now, a co-signer, a bad-credit loan, or a secured loan may increase your chances of approval.
Next steps: If you don’t think you’ll be approved, look into other loan choices or ask a family member or friend in excellent financial standing to be your co-signer.
4. Select your loan type
Determine which form of loan is ideal for your case once you know where your credit stands and have considered your possibilities. While some lenders are flexible about how you utilize the funds, others may only allow loan applications if the money is going to be used for certain purposes.
For example, one lender may enable you to take out a personal loan to fund your small business, whilst another lender may not allow you to use borrowed cash at all. It’s generally a good idea to find a lender who is willing to offer you money for the specific reason you require it.
