If you’re looking for a personal loan, you may have a huge number of options to choose from. In addition to looking at loans from your bank or credit union, you can also borrow money—often very quickly—from a number of online lenders catering to a range of borrowers.
The catch lies in finding the best fit on a personal loan needs a bit of shopping as personal loan rates, fees, and terms often vary widely from lender to lender—and sometimes from loan to loan and borrower to borrower. To get the loan best suited for your situation, you’ll need to do some research.
Here’s what you need to know:
Build a Better Credit Score
Improving your credit score, even in increments, can help you get a better rate and terms, regardless of where your score falls on the scale. However, if your credit score is in the fair range or lower, such as below 670, it may be particularly valuable to optimize your score if possible. Depending on the amount of time you have to work on raising your credit score, here are a couple of ways to gain critical points:
You can start by paying off as much existing revolving debt, such as credit card balances, as possible.
Pay bills on time, every time.
Make Inquiries Widely and Apply Sparingly
Most online lenders can pre qualify you for a loan without running a hard inquiry on your credit. Using this step will help you see approximately which loan rates and terms they can offer you (rates aren’t set until you officially apply)—and, in turn, investigate many options without impacting your credit score. Until you’ve narrowed down the field considerably, try to resist taking the additional step of starting a loan application.
Use a Personal Loan Calculator
Using a loan calculator is a quick and hassle-free way to run the numbers. Using one of these will enable you to compare many options and still make a fast decision.
Paying Off Your Loan
Looking for a personal loan requires more than just a few steps. However, finding a loan that lowers your monthly payments, simplifies your financial life, and even enables you to pay for necessary expenses—with rates and terms you can live with— and can pay off without any hassle over time.
