Reasons to get a personal loan
Personal loans are most often used for credit card debt consolidation. But you may also consider taking out a loan for a variety of other reasons, including medical or other emergencies, home renovations, or major expenses like a wedding or vacation.
Pros and cons of personal loans
The biggest advantage of a personal loan is that you get quick access to money you need in a lump sum. If your credit score is good, you may be able to get a lower interest rate. Since most personal loans are unsecured, you won’t have to put up your car or house as collateral. You should also have a decent amount of time to repay your loan, depending on the term length.
One disadvantage of a personal loan is that, unless you do secure the loan with collateral, you’ll likely face a higher interest rate. This is why your credit score matters so much. With bad credit, it can be hard to get approved for a loan, especially one with favorable rates. Not all lenders allow cosigners on personal loans, and you may also have to pay fees for origination, prepayment, or late payments.
How to get a personal loan with bad credit
If you have bad credit, there’s always the risk of not getting approved for a loan. Some ways you can help your eligibility are to optimize your credit score, make sure you can repay the loan, and see if you can pre-qualify online. You can also consider getting a cosigner if the lender allows it.
How to apply for a personal loan
First, determine how much money you need to borrow. The higher the amount, the higher your interest rate may be. Then, make sure your credit report is completely accurate and see if there are ways to improve your credit score.
Next, be sure to compare lenders to get the best rate and terms possible. Once you’ve found the right lender, fill out a personal loan application.
About personal loans on Credello
Credello shows personal loans from multiple lenders you might qualify for based on your requirements and eligibility. Across all lenders featured on Credello, loan APR may vary from 2.49% and up to 36% for terms ranging from 24 to 144 months. Depending on the lender, an origination fee ranging from 0% to 10%, may also apply. Answer a few questions to see a list of lenders most suited to your needs.
Loan example: Assume you choose a 3-year, $10,000 personal loan with a 5% origination fee and a 14.8% APR. You would receive $9,500 and make 36 monthly payments of $328.39. Monthly payments will cover the loan amount of $9,500 and total interest of $2,322.07.