Get a Personal Loan

Personal loans can be very useful, especially in this time of economic instability.  If it is unfamiliar territory, to actually get a personal loan may seem a little daunting.  There are many reasons to get a loan.  Debt consolidation, buying a home or car, to have extra cash, go on vacation, or even just to raise a credit score just to name a few.  Depending on the use of the loan, there are different types of loans to get.  Each loan has its own set of terms, fees and limits; however, the basic application process is much the same.

Generally, getting a personal loan starts with an application.  Such paperwork will sometimes include requirements for proof of steady income, of U.S. residency, age restrictions or even a credit check.  Depending on whom the lender is; a post-dated check or bank account information may have to be provided for repayment of the loan.  Then, the loan is seen by an agent of the company and evaluated based on their individual conditions.

It is generally advisable to have an existing relationship with the lender if possible.  For example:  going to a bank the borrower already has an account with can speed the process and influence the acceptance of the application.   Usually more money can be borrowed with an existing relationship.  Better rates, terms, and lower fees may also be perks of such an application.

If the borrower is using a company that specifically exists to offer loans, there must be proof of age and existing income.  Eighteen years of age is considered eligible for getting a personal loan; the applicant must also be an active U.S. resident.  Also, proof of a steady income or that the loan can and will be repaid is required.  In some situations, a post-dated check for the amount of the loan, including any extra fees, must be offered to the lender.  There are other ways of repayment, however.  Some companies accept an authorization for bank account withdrawal or even a credit card as payment.

To get some personal loans a credit check is involved and can necessitate the applicant to have good or excellent credit.  These loans can usually be for higher amounts, have lower interest rates, and are offered through lenders, banks and credit unions.  Each time a credit check is required the applicant has the opportunity to look over their credit report and verify that everything is correct.  This is advisable, due to the fact that occasionally there may be mistakes listed that can bring down the credit score.

Occasionally, getting a personal loan requires the applicant to have some sort of collateral to offer; such as a home or a car.  In the event of a defaulted loan, these items will be repossessed or have a lien placed on them.  If based on collateral, a loan is often offered for a higher amount, longer term and/or lower interest rates.

Not all personal loans are long-term.  To get a fast personal loan one only has to apply and meet requirements.  These loans often have high fees and high rates.  They can be acquired in as little as a day and must be paid back within a month or so.  These types of loans are also offered to those with bad or no credit.  Some of these loans require collateral, but not all.  Payday loans and title loans are common examples of these. 

A borrower needs to be wary of these loans, however.  If a borrower is constantly getting these fast personal loans, they may end up paying more in fees and interest than they have the money to repay.  Being aware of what is available to the borrower and what is being required can go a long way in successfully acquiring a personal loan.