All it takes is a small financial misstep or unexpected output and your credit score can take a hit. A personal loan can often help you get back on your feet and hopefully improve your credit. It is a mercurial scale but on average credit scores range from 350 to 850. Anything from 720 and up is in the perfect range which can easily approve the credit purchase of just about anything. This range will also present some reasonable interest rates. If it drops below 720 but no lower than 681 there is still hope, but here is where interest rates begin to rise. 680 down to 641 is about as low as you want to get but you may still be able to work a premium interest deal if you fall between 640 and 600. Below 600 is considered too high a risk to use your credit at all. If your score is above 600 and you need to obtain a personal loan there are some things you can do to get one. Note: Refrain from applying for any loan online due to the sensitive information you will be sharing including your social security number.
As mentioned above, if your credit score presents even a slight chance of risk then a personal loan will cost you in high interest rates. These rates will vary depending on your actual score which you can obtain for free at Equifax, TransUnion and Experian. Knowing your score will help when applying for a personal loan enabling you to make a responsible choice. There are three ways you can seek out a personal loan:
- Credit Card
A bank is usually your best bet however a cash advance, although high in interest, from a credit card is faster and easier. Agencies are on the more risky side as they can easily take advantage charging their own rates that could be extreme. A positive outlook is that if you are able to maintain a constant payback history your credit score is likely to go up. After six months to a year you can contact your loan agent and possibly refinance, lowering your interest.
Credit Repair Agencies
By working with a credit repair agency you may be able to find a way to obtain a personal loan while at the same time increase your credit score. Remember, a personal loan is one of the highest risks for a bank to consider inasmuch that it requires no collateral.
Customize Your Loan
Sometimes a loan officer or agency rep will offer advice on how to set up your personal loan. Borrowing the least amount you need and paying it back over a long span of time is possibly a more appealing choice. This tells whomever you choose to borrow from that they will be getting their interest premium longer which is more beneficial to them. If something changes, you can pay it all off at once however sometimes there is a fee attached to early payment.
About the author: Deborah is a full-time writer with a passion for personal finance, credit repair, and bankruptcy. She regularly writes about credit repair, obtaining credit and personal loans, and topics related to budgeting and maintaining control of your finances during these difficult times.