Considering a Personal Loan?
There are plenty of reasons to get a personal loan. But before you sign on the dotted line, it’s important to know all the facts. Personal loans are considered lump-sum installment loans that usually range between $1,000 – $40,000+. Typically, personal loans are taken out for financial emergencies and debt consolidation, but someone can apply for one in several instances.
If there’s one thing you’ll want to focus on when you’re shopping around for loans, it’s interest rates. Getting stuck with a high-interest loan can make it harder to pay off in the long term. However, to get a low-interest rate, you’ll need to meet the loan qualifications.
How to Qualify for a Personal Loan
Easy as 1, 2, 3? Three loan qualifications determine the loan amount you can receive and the interest rate on that loan. Lenders will review your credit score, payment history, and income. Regarding credit score, you’ll want to be at 640 or higher to be eligible for a loan with low APR. If your score is below 640, you may struggle to find a loan without a high-interest rate.
Next, your payment history will be reviewed. Payment history is tied directly to your credit score. In fact, your payment history accounts for 35% of your FICO score, and one or two late payments can greatly impact your credibility to lenders.
Lastly, lenders will want to analyze your income. This information will help them determine if you are suited for a short-term loan with higher monthly payments or a long-term loan with smaller monthly payments. Of course, knowing your income will also control the amount lenders are comfortable loaning you as well.
Five Reasons to Get a Personal Loan
It’s time for the fun part! (Well, maybe fun or maybe just necessary.) You’ve been approved for a personal loan, but what will you be using it for? Below, we’ve highlighted some common reasons to use a personal loan. Let’s get into it.
Home Maintenance & Renovations
Whether you’re flipping a fixer-upper or the old roof is leaking, a personal loan for home maintenance is an excellent investment.
Vacations
Planning a once in a lifetime trip? Maybe you’re traveling through Europe or selecting your honeymoon destination. A personal loan could take your trip from okay to unforgettable.
Destination Weddings
Speaking of honeymoons, you can’t forget about the wedding! Anyone will tell you that wedding planning can be stressful and expensive. Even if you aren’t planning an extravagant destination wedding, the prices can really stack up.
Financial Emergencies
The unfortunate thing is financial emergencies always come around at the worst time. Sometimes things just need to be taken care of, and you don’t have the luxury of saving up to pay for them. From a death in the family to medical bills and major car repairs, personal loans can help save the day.
Debt Consolidation
As one of the most common reasons to get a personal loan, debt consolidation is a helpful way to pay off your existing loans and credit card bills to lower your interest rates and focus on paying back one lump sum.
Applying for a Personal Loan with White River Credit Union
Are you still trying to process all the information and decide on the best loan type for your needs? We know the feeling. Click here to learn more about the personal loan types we offer at White River CU or send us an email at loans@whiterivercu.com to connect with our knowledgeable staff.
