Need some money soon? The idea of borrowing money might be daunting, but at the end of the day, it can save you hundreds, if not thousands of dollars on late fees if you are using the correct loan options to help refinance your outstanding credit card or personal debt.
It can also help you mitigate financial hardship like paying for medical bills your insurance company unexpectedly refused to cover. The best part? You may be able to get approved instantly for an online loan. Read ahead to learn how to obtain the best loan rates and terms on a personal loan today.
One advantage of personal loans is the fast application and approval process. Before you apply, however, it is best to research different loan options and do a loan comparison to find out which type of loan is right for your financial needs.
When applying for a personal loan, it is advisable to do comparative research between multiple lending companies prior to submitting any application.
Credit report agencies such as Experian, TransUnion and Equifax view too many credit inquiries in a short period of time as an irresponsible and possibly fraudulent attempt to obtain multiple sources of credit, which may look suspicious in your credit history.
There are also alternate credit ratings in addition to a FICO score, and some may lower your credit score for too many inquiries in a fourteen to forty-five-day window depending on which bureau is reporting.
Information needed when applying for a personal loan includes:
- Your full name.
- Date of birth
- Social Security Number.
- Most recent tax forms.
- Proof of employment/residency.
- Valid government-issued photo identification.
Most personal loan applications can be approved or rejected within moments, while others can take twenty-four to forty-eight hours. Funding can also happen same-day or within twenty-four to forty-eight hours.
Understanding Your FICO Score
A FICO score is a three-digit number used to rate overall creditworthiness when applying for new credit or personal loans, auto loans, small business loans, etc. FICO credit scores range from 300 to 850, with 850 being the best possible rating available. Multiple correlating factors impact a FICO score. Overall payment and credit history account for 35 percent of your total FICO credit score. The use of your credit, including the amount of debt owed, amount of open balances and amount of open credit card accounts at one time, factor in as another 35 percent.
Correlating factors affecting the remaining 30 percent of your FICO score include:
- Length of your credit history.
- Diversity of account types.
- Amount of new inquiries and recently-opened accounts or credit cards.