Don’t Ever Accept Your First Loan Offer, and 5 Other Tips
Personal loans can be used to fund a home improvement project, pay for a wedding or funeral, or – most commonly – consolidate credit card debt. The loan product became popular after the 2008 financial crisis and is now one of the fastest growing for banks.
Most personal loans are unsecured, meaning they don’t require you to put up collateral, such as a house or bank account, as leverage for the bank. With personal loans, you take out a fixed amount of money and repay it over a fixed time period at a fixed interest rate. Though this seems simple, there are many intricacies to taking out a loan that aren’t immediately obvious, like checking what kind of fees are charged on top of a loan or making sure there are no errors in your credit reports.
Do: Check your credit reports
Your credit score and credit history are online payday loans Missouri major determinants in the interest rate you receive on a personal loan. Banks use credit as a barometer for risk. If you have made payments in a timely fashion before, then you are more likely to repay your loan. Therefore, the better your credit, the lower your rate. Generally, rates will range between 4 and 36%.
Due to the COVID-19 pandemic, the three major credit bureaus (Equifax, Experian, and TransUnion) are offering free weekly reports at through . As due diligence, we recommend pulling your credit reports to make sure they’re in tip-top shape. …
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