A personal loan might help you tackle that long-awaited home repair, afford a special celebration like a wedding or fill a hole in your budget due to an unforeseen emergency. While it might seem like a loan is only available to people with strong credit scores, there are ways to get accepted for
loans in Atlanta, GA, with less-than-perfect credit.
Check your credit
Your credit score represents your creditworthiness, which is your ability to
manage and repay money on time, and your reliability as a borrower. A credit score is based on data that banks, credit unions, and lenders provide to the three major credit reporting companies: Equifax, Experian, and TransUnion. Factors like how much debt you currently have, how long you’ve had your credit cards, and how much of your available credit you use each month are included in this data.
Knowing your credit score before you apply for a loan could help you identify which lenders might work with you. When you need money quickly, you don’t want to spend time talking to lenders that are unlikely to provide you with the necessary funds.
You are entitled to receive a free credit report every 12 months through annualcreditreport.com.
The more knowledge you have about your finances, the more confidence you might have during the loan application process.
Shop for lenders
Once you know your credit score, you could begin looking at loan options from different lenders. Personal loans generally offer fixed
interest rates and predictable monthly payments. However, specific terms and conditions vary from lender to lender.
When you’re looking at lenders, consider whether you meet their eligibility requirements, which include your employment history and credit score. You should also look at the range of loan amounts and interest rates a lender typically offers, as well as any fees you may be required to pay.
Look into prequalifying
After you’ve identified a few personal loan options, it’s a good idea to see if you prequalify for a loan rather than immediately submitting complete applications for one or more loans. When you apply for a loan, the lender will do what’s known as a hard credit check, which could slightly lower your credit score. Prequalifying for a loan, on the other hand, typically involves the lender doing a soft credit check, which won’t affect your credit score. Prequalifying may give you an idea of your approval odds and the loan amount and interest rate you might be offered.
The process of prequalifying varies from lender to lender, but you can often do it online in just a few minutes.
Take time to apply
Once you’ve found a personal loan that suits your budget and needs, it’s time to apply. Typically, you’ll need to provide some basic information like proof of identity and address, employment status, income and the amount of money you want to borrow and how long you’re interested in taking to pay it back. If you apply online, you may find out if you’re approved right away.
Once you’re approved, carefully review the terms and conditions to see if the loan still meets your needs. The loan amount, interest rate and repayment terms may not be the same as the loan offer you prequalified for, so be sure to review everything before you accept.
If you don’t qualify for a loan, lenders are required to let you know why. With this information, you can take steps to potentially improve your chances of qualifying in the future.
Improve your chances of securing a loan
If you have a low credit score or no credit history, there may be ways to improve your odds of qualifying for a personal loan.
You might consider a secured loan, which requires the borrower to put up collateral in order to receive the funds. Collateral is a valuable asset you own, like your home or car. If you fail to repay the loan, the lender could take possession of your collateral, allowing them to recoup some of their losses. Because a secured loan lowers the lender’s risk of suffering a loss, you may be more likely to be approved for a secured loan if you have a less-than-favorable credit score.
Another option that could help your chances of qualifying for a loan is by using a cosigner. The cosigner agrees to sign a loan along with the primary borrower because of their stronger credit history or better credit score. Remember that the cosigner will be responsible for paying the loan if the primary borrower fails to repay it.
Many lenders have rules about who can be a cosigner, and some lenders don’t allow cosigners at all. Be sure to check these requirements before asking someone to be a loan cosigner.
Don’t let less-than-perfect credit stand in your way
Depending on how you approach the process, having a less-than-favorable credit history doesn’t have to be a barrier to qualifying for a loan. Prepare to apply for a loan by verifying the accuracy of your credit report, shopping around among lenders, and checking for prequalified loan offers. Taking these steps could potentially improve your chances for loan approval.
The good news is that there may be options available to you to get the loan you need and achieve your financial goals.
Notice: Information provided in this article is for information purposes only and does not necessarily reflect the views of [under30ceo.com] or its employees. Please be sure to consult your financial advisor about your financial circumstances and options. This site may receive compensation from advertisers for links to third-party websites.
Sources:
https://www.annualcreditreport.com/yourRights.action
https://www.bankrate.com/loans/personal-loans/how-to-choose-the-best-personal-loan-lender/#compare
Photo by Blake Wisz; Unsplash
