As the coronavirus pandemic forces the U.S. economy into a recession, many families are worried about covering their daily costs.
If you need help paying expenses right now, taking out a personal loan may provide you with the money you need. Personal loans generally charge lower interest rates than credit cards and you can use them for anything you want, from home improvement to paying off credit cards to covering basic needs. And the good news is, if you're a well-qualified borrower, there are options for getting your hands on cash quickly from many personal loan lenders.
How fast can you get a personal loan?
Traditionally, personal loans could take weeks to obtain as banks reviewed many aspects of your financial life and evaluated the risk of lending to you. But online lenders have changed the game, using automated tools to streamline the application process. With some online lenders, it's now possible to get an instant decision on your application and get your funds as soon as the day you apply.
You can visit Credible today to quickly compare rates and terms on personal loans ranging from $1,000 to $100,000 so you can find a lender that suits your needs within mere minutes.
What can I use a personal loan for?
If you've been approved for a personal loan, there are generally few or no limits on what you can do with it. You'll be able to use the money for any purpose you'd like, which can come in handy during these tough economic times.
If you think you can find an affordable loan, you're confident you can pay back the money, and you need to borrow, visit Credible today to explore your options and see if a personal loan is right for you.
But remember: Before you borrow, you'll want to make sure the loan really is affordable for you. Watch out for lenders charging high origination fees or loans offered at a high-interest rate, as these could be very expensive and could make your financial situation worse. You'll also want to have a plan to make payments on the loan, as defaulting could be damaging to your credit.
What do you need to qualify for a personal loan?
The size of the loan you're taking out can affect what lenders require to qualify you, as the more money you borrow the greater the risk. That means it may be harder to get approved for a $100,000 personal loan than for a $1,000 one. If you’re looking to view your available personal loan options, Credible can help you do so from the comfort of your own home.
Lenders typically want to see that you have a stable income with enough money coming in to repay the loan and that you've been responsible with repaying debts in your past. A good credit score and proof of employment are, thus, very important in getting approved.
Lenders also want to make sure you aren't borrowing more than you can afford, so they'll take a look at how much debt you already have. Your outstanding debt balances will be compared to your monthly income to determine your debt-to-income ratio. If your debt is too high relative to monthly earnings, you may be turned down for a loan.
If you can't qualify based on your own debt level or for some other reason, such as a low credit score or limited income, some lenders will allow you to apply for a cosigner to increase your chances of approval. In these situations, the cosigner's financial credentials are also considered and the cosigner must share legal responsibility for loan repayment.
What information is needed for a personal loan?
If you want to obtain a personal loan as fast as possible, you'll want to be ready to complete your application quickly without having to pause to find necessary financial information. There are a few basic things you should have ready when applying for a loan so you can quickly provide what lenders are looking for.
While lender requirements may vary, some of the most common things you'll need for your application include:
- Your Social Security number
- Identification, such as a driver's license, passport, or other state-issued ID
- Proof of address, such as a rental agreement or mortgage or utility bill
- Paystubs, tax returns, W-2s, 1099s, or other documentation to prove your earnings
- Your employer's contact information so the lender can verify your employment status
- Several months of bank statements
Not all lenders will ask for all of these documents. But all lenders will want to get an idea of your current financial situation. Most will also check your credit score to determine if you're a well-qualified borrower. This score will help lenders determine if they should give you a personal loan and what interest rate to charge you.