Welcome to naijabucks.com.ng. in today’s article I am going to introduce you some five(5) good steps on how to take a personal loan.
A personal loan can be a helpful resource when you need to pay for a large bill or unexpected expenses.
But before chosing any one, it’s best to have a reliable plan to pay it off.
Before you arrived on getting a personal loan you should be able to consider all the factors that’s into taking it.
Including your financial standing, the lender you’re using and how you will pay it off.
Before looking for a personal loan gather all the documents and information you need in getting the loan.
Doing so well help your process more efficiently and get your funds as quick as possible.
Get the information and documents listed below.
- Make sure you are with you personal documents, such as a driver’s license, social security card or passport.
- Provide a valid proof of your income, such as W-2s, paystub or filed tax returns.
- Employer’s name and the phone number.
- Proof of residence, such as a utility bill with your name and address or a lease agreement.
With all these information and documents you can get a loan.
Follow this step below to guide you on a personal loan.
- Check your credit score
- Consider your options
- Choose your loan type
- Pick a lender and apply
- Provide necessary documents
Run your numbers
First check on your income, if you can be able to repay your bill. While lenders typically do their due diligence to make sure you have the ability to repay the debt, it’s smart to run your own numbers to make sure it’ll work out.
Know how much cash you’ll need, make sure the money can afford what you want to used it for, knowing that some of the lenders charge an origination fee, which they deduct from your load proceeds.
Also find out what your monthly payment will be by using a personal loan calculator. This can hard you if you don’t find out why kind of rates and repayment terms lenders will offer you. Get an idea of how the loan will cost you and decide if your budget can handle it or not.
Check your credit score
Some lenders will make sure they run your credit score to know if you are capable in paying your fees.
Before you take a personal loan, your should have at least a fair credit usually between 580 and 669. Good and excellent credit above 670, will give you the best chance of getting approved with a competitive interest rate.
You can get a copy of your credit report from Annual Credit Report.com. It will provide a free copy of your credit report from all three credit bureaus every 12 months. Check to see if there are any errors on the report. If there is mistakes, contact the major credit reporting agencies (Equifax, TransUnion and Experian) to get them corrected.
If you have a credit score that’s low for other reasons, they can still offer you the loan, but the interest rates and fees maybe too high to make it worth it.
So take steps to improve credit before applying.
Consider your options.
If in case your creditworthiness don’t reach to deal with, you may need a co-signer to get approved loan with a decent interest rate. If you can’t find a co-signer, or the lenders you’re considering don’t allow co-signers, you may have the option to get a secured personal loan instead of an unsecured one.
Secured loans require collateral, such as a vehicle, a house or cash in a savings account or certificate of deposit, in exchange for more favorable terms. If you fail to repay the loan, the lender can seize the collateral to satisfy the debt.
You’ll also need to think about where to get a personal loan. With traditional banks, for instance, you may have a hard time getting approved if you have bad credit. Some online lenders, however, specialize in working with bad-credit borrowers, and some credit unions have short-term loans that serve as cheap alternatives to payday loans.
If you don’t meet the typical qualifications and your purchase can wait, take some time to build up your credit score so you can qualify.
Choose your loan type.
Once you know where you stands and you’ve considered your options which type of loan is best for your situation.
Some lenders are flexible in terms of how you want to used the funds, others may only approve loan applications if the money will be used for specific purposes.
For example, one lender might let you take out a personal loan to fund your small business, while a different lender might not allow you to use borrowed funds for business purposes at all.
It’s generally smart to find a lender that is comfortable loaning you money for the exact reason you need it.
Provide necessary documents
Your lender will likely ask you to provide some additional documentation. For example, you might need to upload or fax a copy of your latest pay stub, a copy of your driver’s license or proof of residence.
Accept the loan and start making payments.
As the lender notifies you that you’ve been approved, you need to finalize the loan documents and accept the terms. Once you do this, you’ll typically get the loan funds within a week.
When you’ve been approved, start keeping track of when your payments are due, and consider setting up automatic payments from your checking account. Some lenders even offer interest rate discounts if you set your account to make autopayments.
Consider paying extra each month. While personal loans can be cheaper than credit cards, you’ll still save money on interest by paying the loan off early. Adding even a small amount to your monthly payments can help you do so.
With what you read here I believe you can take a personal loan.
If you’ve any question in mind you can do so by dropping a comment down below.