So, you’ve decided that you want a personal loan to help you cover some personal expenses. The hardest part about the process is choosing the right personal loan company to work with. There are more personal loan companies than ever in the United States. But this makes the decision process much harder. While you have a variety of different lenders to choose from, you’ll also have a problem deciding which one is the best for you.
That’s why it’s important to equip yourself with as much information as possible. You don’t want to end up working with a bad personal loan company, it can have way more of an impact on your life than you probably think. This article has all the information you need to determine the best personal loan companies to work with. It explains what you should expect from your personal loan company, and how to assess if a company is worth working with.
Make sure that you read all the information in this article prior to deciding on which company to work with. This guide is the perfect way to make sure that you have the information you need to make an educated decision. If you have any questions about personal loan companies, they’re sure to be answered somewhere in this article!
Who Provides Personal Loans
There are a variety of different providers that will issue people with personal loans. The one that is right for you will depend on the amount of money your looking for and your financial background. We will explore each of these different options in more detail below.
Traditional lenders are long established lenders that have physical locations around the United States. In most instances, these lenders are traditional banks and lending institutions. These lenders are hard to get loans through, they are much more risk averse than many other lenders. Their applications take a long time, as they typically want you to come in and do a face-to-face interview. This being said, many traditional lenders are beginning to increase their online capabilities.
Advantages of Traditional Lender
Below are some features that make using traditional lenders an attractive option:
- Low Interest Rates
- Physical Locations for Face-to-Face Meetings
- Other Financial Products on Offer
- Longstanding Reputations
- Capable of Securing Loans
Online Personal Loan Companies
Online personal loan companies have exploded in popularity in recent years. These firms have been set up to help meet demand for quick online personal loans. People don’t want to have to waste time with a long bank applications – plenty of people want to apply from the comfort of their own homes. These lenders have been able to provide people with very fast application speeds. The only major downside of online personal loan companies is that they tend to have higher interest rates. Most of their loans are unsecured.
Advantages of Online Personal Loan Companies
Below are some features that make using online personal loan companies an attractive option:
- Quick Application
- Variety of Lenders
- Quick Money Transfer
- Online Application Portal
- Unsecured Loans
Peer to Peer Lending
Peer to peer lending is another type of personal loan that you can obtain. Peer to peer lending companies simply facilitate loans from consumer to consumer. You can head to one of their websites and lend out money to borrowers – you receive interest in return for your capital, the host site takes a small commission to facilitate the transaction. These loans are typically very easy to obtain, and they don’t require you to work with a traditional lender. The only major downside is that interest rates are quite high and you can’t borrow large amounts.
Advantages of Peer to Peer Lending
Below are some features that make using peer to peer lending an attractive option:
- Quick Application
- No Credit Check
- Easy to Qualify
- Quick Money Transfer
- Don’t Have to Work with Traditional Lender
What to Look for in Personal Loan Companies
Now that you have a deeper understanding of what different types of personal loan companies are available, it’s time to decide which one is right for you. The first thing you should do is assess what you want to get out of your lender. We’ve compiled a list of certain things you should be looking for in a personal loan company. Assess the different features and determine which ones you value.
There’s nothing worse than wasting time on an application. You don’t want to spend hours filling out an application that you might not end up being approved for. We highly recommend that you work with a lender that has a quick application process. There is no reason not to have a lender that has a decent application speed. Most online lenders can provide you with the quickest applications.
The biggest cost burden associated with any loan is the amount of interest that you have to pay on it. If you want to save money, you need to make sure that the interest rate is low. Interest rates don’t seem like a lot of money in raw numbers, but when they accumulate over years they can be extremely expensive. Don’t underestimate the burden that interest rates can be.
Many lenders will attract you with low interest rates but then load on a high amount of fees after you’re approved for the loan. This is a good way of sucking borrowers in and getting them to make lending agreements on the basis of affordability. You want to make sure that you don’t fall victim to this. Make sure to read the fine print and ask your lender about any fees that might be associated with the loan.
The number one thing that you should be looking for in a lender is your ability to access the loan. You need to make sure that they work with borrowers that have similar credit backgrounds to you. You don’t want to work with a company that will end up rejecting you. This will have a negative impact on your credit score and mean that you have to start the entire process over again. Never apply for a loan that you know you can’t get – there’s no point shooting in the dark when it comes to finance.
Ask you lender what type of credit score ranges they accept. You should also ask if there are any credit report items that automatically exclude people from qualifying for their finance. Don’t apply for a loan you’re already disqualified from – many lenders have automated systems deciding whether to accept you or not, they will automatically reject you if you don’t qualify.
You want to make sure that your lender provides you with a good online platform where you can view your loan balance and make payments. You don’t want to miss payments simply because you weren’t aware they were due. Having a fully functional online platform is pretty standard for lenders these days – make sure that the lender you’re working with has one.
Good Customer Satisfaction
Customer satisfaction is much more important than you may think. Working with a lender that has a poor customer satisfaction record is a sure way to have a horrible experience. You may think you might not be having much interaction with your lender after you borrow money, but you don’t want to be on the bad end of a dodgy company.
Consumer Affairs and the Better Business Bureau both provide platforms for customers to review companies they have worked with in the past. They also do some of their own research to determine if a company is an ethical operator. Make sure to run your prospective lenders through this database before you decide to work with one.
Electronic Money Transfer
You need to make sure that lenders you work with have electronic money transferring capabilities. It can be a nightmare making payments if they don’t have this feature. It’s much easier to transfer money via the electronic channels. If the company you’re working with has this feature, you’ll most likely be able to receive cash within 24 hours of approval.
Should I Secure My Loan?
This is one of the most common questions we get from our readers. Many people want to know if they should have a secure or unsecured loan. You don’t want to end up with the wrong type of loan. For those who don’t know, unsecured loans are loans that are not tied to the value of any of your assets. If you default on the loan, the bank or lender will not be able to use your assets to pay back their debts.
On the other hand, secured loans are tied to the value of an asset that you put forward as collateral. If you end up defaulting on your loan, your lender can seize your property and require you to liquidate it to pay back the money that you owe. In this regard, it is a much riskier option for borrowers.
If you’re worried about your ability to pay back your loan, you should never secure the loan. This is because most secured loans are secured against a home or a car – both of which are very valuable assets. You don’t want to put the wellbeing of your family at risk to get a personal loan. If you’re someone who is very financially responsible, you may find that securing a loan is beneficial. It will drastically reduce the interest rate you are offered by lenders.
No matter what you do, if you do end up securing a loan, you will probably need to work with a traditional lender. Many online lenders don’t have the ability to secure loans for you.
It’s important to take your application seriously, you should never underestimate how important it is to be prepared for any type of financial application you make. We’ve provided the following tips to help our readers better prepare for their application.
- Check Your Credit – Make sure that you’re eligible for the loan that you’re applying for by checking your credit. You need to make sure that everything on your credit report is correct – there are more mistakes on credit reports than you realize. You can request to the reporting bodies that mistakes on your report are removed.
- Have All Your Information – You need to make sure to have proof of income, addresses, personal details, and your SSN. You don’t want to have to start the application process over again simply because you forgot important details.
- Choose One Lender – Applying for multiple loans at the same time is a huge mistake. You should choose one lender and commit to applying with them. If you get rejected by a lender, you shouldn’t apply through another one straight away. Lenders can see that you’ve been rejected on your credit report. Applying for a lot of finance at once is considered a huge red flag – lenders will view you as a risky borrower and won’t extend credit to you.
You should have all the tools you need to determine which personal loan companies are best for you. Make sure that you consider all the features mentioned in this article before you decide on a particular lender. You need to be certain that you’re working with a company that you can trust – it’s very important to be in accordance with the firm you’re working with.
We’ve provided a list of reputable personal loan companies that you can work with. Head to our homepage to see who we currently recommend. We are committed to providing non-biased assessments of personal loan companies. We want our readers to have as much knowledge as possible regarding who is best to work with.
If you have any more questions about personal loans and how they work, make sure to check out some of the other content that we have here on our site. We have information on a wide variety of topics related to personal loans.