With a decent computer and a good Internet connection, these days you can pretty much live your life right in front of your computer if you want to. You can play games, chat with friends, catch up on work, watch movies, and even pay your bills. And now, you can even take out a personal loan online.
Personal loans are not for everyone. If you have access to interest-free cash through the help of a friend or family member, then by all means that would the best way to get the cash you need. Or, maybe you do not have enough important expenses coming your way to warrant taking out a loan.
On the other hand, taking out a personal loan can be an excellent idea for you if:
* you need cash to pay down bills or other large expenses
* you need money fast in order to go on a special trip, pay for car repair, or cover a recent medical expense
* you need to borrow $500 to $10,000
* you are able to repay the loan within some reasonable period of time
Unlike auto loans, home loans, or boat loans, with a personal loan you do not need to have plans for making any particular purchases with the money you borrow. In other words, you can use the money for whatever you like. This makes them truly “personal” loans – because you can personally decide how to use the money.
What is the best way to apply for a personal loan? There are a lot of ways to go about it, such as via phone, in person, or online. However, if you choose to apply for a personal loan online, you are probably going to have the most convenient customer experience. The typical online personal loan application process happens pretty fast. Also, when you are applying online, you can afford to take the time to apply for a loan with at least 3-4 lenders.
Here are the recommended tips to take into account when applying for a loan online:
1. Run your credit reports. You can do this by running your report with each of the Big 3 credit bureaus, including EquiFax, TransUnion and Experian. Be sure to go over each report carefully and take notes on any items that tend to raise your eyebrows. Aggressively pursue correction for any falsely-reported items on the list.
2. If you have a low credit (FICO) score of under 650, make sure to limit your search for possible lenders to those that target bad credit personal loan lenders.
3. Only borrow what you need. Borrow too much and you’ll end up paying more than you need to in terms of interest. Borrow too little and you will be back to square one in terms of still being in need of cash.
4. Apply to all of the lenders on your list – even if you already have received a couple of offers. Reason: saving just a point or two on the interest rate could save you hundreds in interest payments. It’s worth it for your time to take a few extra minutes to apply to more than one personal lender.
5. When you talk to each lender, find out if they have any pre-payment penalties. Try to take out a loan that does not have such penalties attached to it. That way, you can pay down the loan early (before final payment is due) without paying anything extra. That will save you big on interest payments!
Try these 5 tips when applying for a personal loan online.