personal loan shopping Archives

A Furniture Loan That Makes You Feel Comfortable in Any Home

Posted on July 8, 2021 | by William Vinson

Modern interior of apartment. Living room with sofa.

If you plan to use credit to buy furniture, it is good to shop for a furniture loan before you shop for the furniture. Retail furniture stores usually offer some form of financing, but they do not necessarily have the best rates.

Shop for a Furniture Loan

When you go personal loan shopping, imagine the monthly bill as a new expense. Take some time to see what loans you may qualify for and check out your credit history, which you might improve using credit management tools. A better credit score can help you qualify for a loan, perhaps at a better rate.

You can check out a loans shop online that is part of the Goalry Mall to get an idea of what loans might be available.

Strategic Furniture Buying

Having a priority list of needs separated from wants. This will help you strategically furnish a home. You may only be able to afford a bed, a chair, a table, a TV, and a refrigerator to get started. With those few things, you can at least sleep, eat, and relax.

Your priority list can be items or rooms listed by your personal interests. Once you have furnished a room at the top of the list, you can move on to use your disposable income to furnish the next room on your priority list.

How to Furnish an Apartment

ForRent.com reports that the average person spends $8,176 to furnish an apartment. To do this effectively, make a list of needs that you prioritize over wants.

Sofa: $1,024
Coffee table, end tables, and TV stand: $760
Area rug: $290
Drapes and curtain rods: $90
Decorative plants and art print: $36
Bedroom set: $2,050
Mattress and box spring: $1,536
Bathroom Accessories: $122
Dining table and chairs: $1,118
Kitchen shelving and storage: $135
Pots, pans, and trash can: $180
Patio furniture: $470
Grill: $300
Outdoor decorative lighting and plants: $65

Total $8,176

How to Furnish a Home

If you are lucky enough to afford to buy a home, you can use a rule of thumb to budget about 10% of the home’s price as a minimum for furniture or more if you can afford it. If the home sells for the median price of a home in America of $347,500, this means the furniture budget might be $34,750.

Be sure to set aside emergency funds first before taking on the expense of buying quality furniture. Have three months of your living expenses set aside as emergency funds? Use tools available at the Goalry Mall to help you achieve this goal. Once you achieve this goal, you can take on the furniture budget with any extra disposable income that you have.

Tips to Get the Best Deals

Sometimes you may find that buying something in the off-season will get a significant discount from the regular price. For example, look to buy outdoor patio furniture when the weather turns cold, and furniture stores bring in new inventory for the winter season.

The flexibility of using a personal loan may allow you to buy second-hand furniture that you cannot buy with store credit.

Look for quality-built furniture that can be recovered. For example, buy a well-built sofa for its frame, even if the fabric covering is totally ripped up. You can recover a sold frame with new upholstery. This can even be a do-it-yourself project if you have the handyperson skills.

You may find bargains at estate sales or if a company is going out of business. Offices can be a source of high-quality sofas that they use in the waiting areas. Hotels may liquidate lots of furniture when they are undergoing a makeover.

The key to having success in furnishing a home is to be patient and enjoy the process. Focus on quality over quantity. Buy the best quality you can afford to use in the most active rooms in your home.

Beautiful dog lying on the modern gray sofa.

Be Comfortable

Put comfortable furniture high on your list of priorities. If you want to have something as a showpiece, it is better to use artwork than to buy furniture which looks great but is uncomfortable to use.

Stretch your budget but don’t break it. If you cannot sit on your new sofa without worrying about how much you have to come up with to pay for it, you will probably be unhappy. The monthly payments you make on a personal loan for buying furniture need to be at a comfortable level also.

Quality furniture can become family heirlooms. Buying quality furniture is appropriate when using financing to help pay for it. Think about its useful life, and then you can spread out the payments over a long enough period to make it comfortable to pay for the furniture.

Final Thoughts

Investing in quality furniture and maintaining it in excellent condition is a good strategy if you have children who may end up with the pieces as part of their inheritance. Don’t force the furniture on them if it is a style that they do not appreciate. Just share the pieces with those who really want them.
Be sure to have plenty of good times using the furniture to infuse it with positive energy. If your children only remember the family constantly fighting around a beautiful dining table, then they may not want to have that table in their home.

There is a pseudoscience of psychometrics with a theory that physical things hold the energy of the circumstances surrounding them. Very sensitive psychics are supposedly able to touch things and get a reading about a person who has used them.
Whether you believe that this ability is true or not, it makes common sense to have more good times enjoying your furniture rather than being miserable using it. Fine furniture is like fine wine. It gets better as it gets older if it is well taken care of by its owner. Just about everyone enjoys sitting in a really comfortable chair. Feel free to gift that wonderful sensation to yourself and enjoy a happy life.

William Vinson

William Vinson has been a professional writer for more than 35 years. He is also a seasoned financial professional and raised significant capital for the startup of over 30 companies. He has expertise in real estate, insurance, financial planning, and investment management. He wrote thousands of articles for publication on major websites. All of his earnings from writing are used to support the charitable efforts of the Willivision Foundation that helps the elderly and does animal rescue.

How to Use A Personal Loan for A Major Purchase

Posted on March 3, 2020 | by Blaine Koehn

OK, I’ll admit it. This probably sounds like a silly question. Why would we even open with something so… obvious?!

I’m glad you asked.

Too many times, we dive into new debt without fully thinking through what we’re committing to. If we don’t fully understand what we’re applying for, we can’t properly determine whether or not there may be loan options that make more sense for our situation. There are as many varieties of loans as there are borrowers and lenders, and unless we stop and think about the specifics of what’s in front of us, we’ll most likely agree to the first offer that waves “low monthly payments” or “zero percent interest” in front of us like a hypnotist’s shiny watch.

Any offer that doesn’t hold up well to a few simple questions probably isn’t a very good offer.

Use Your Personal Loan In The Best Way

The “personal” part means you’re taking out this loan based on your individual credit score, your credit history, your current income and employment, and your assurance of repayment. The funds aren’t committed to purchasing a home, a new vehicle, or starting a business. With most personal loans, once approved you can do pretty much anything you wish with the money. If you’re taking out a personal loan for a major purchase, the assumption is that you anticipate a major purchase of some sort – but that may not matter to the lender. What matters to the lender is how likely you are to make your payments on time, every time. Unless your purchase is specifically required as collateral on the loan, it’s only a personal loan for a major purchase because of YOUR decisions and goals.

Most personal loans are “term loans”. These are the most standard sort of loans with which most of us are familiar. You reach an agreement with a lender to receive a lump sum upfront, and you repay it over a set amount of time in regular monthly payments until the loan is paid in full.

Secured and Unsecured Personal Loans

A personal loan for a major purchase can be “secured” or “unsecured.”

“Secured” means you’re offering the lender some form of collateral – your home, or automobile, or perhaps the item you’re purchasing. If for any reason you’re unable or unwilling to make your payments, the lender has the right to take possession of the collateral to recoup their losses. Because the lender is protected in this way, secured loans are often easier to get approved even with less-than-perfect credit. Sometimes you can negotiate lower interest rates as well.

An “unsecured” personal loan for a major purchase relies entirely on your credit history and personal guarantee for approval. Lenders may require higher credit scores to approve unsecured loans, and interest rates will likely reflect their higher risk. On the one hand, you’re not risking personal property if anything goes badly; on the other, the loan will probably cost you more and defaulting will seriously damage your credit. Secured or unsecured, you want to make sure you’re able to make each and every payment on time, every time.

How Much Interest Will I Pay on a Personal Loan for a Major Purchase?

“Interest” is the primary cost to you of borrowing money. There are sometimes other fees or extra charges for late payments. But interest generally makes up the bulk of the lender’s profits. Most basic personal loans carry a fixed interest rate. Your monthly payments remain the same each month until paid in full. And you know the day you agree to the loan exactly what it will cost you and the date of your final payment.

Some lenders will offer adjustable-rate interest for personal loans as well. These usually start off at a lower interest rate, but after a set amount of time can rise or fall based on current market averages. The lower initial rate is tempting for many borrowers, but over time loans calculated under this method tend to cost more than locking in a set rate at the outset. That’s the risk of adjustable rates – you can’t predict for certain which way rates will go during the life of your loan.

Whether fixed or adjustable, your interest rate will largely depend on your credit history and your current three-digit credit score. If you shop personal loans today, you’ll find rates from major lenders are running anywhere from the single digits – around 7% or so – to 35% and higher. With a little searching, you’d no doubt find someone offering lower rates in the right circumstances. I’m positive there are other folks paying far more. It all depends on your specific credit history and timing.

What Determines My Interest Rate?

The stronger your credit history, the better the rates available to you. This doesn’t mean that every lender will offer you the same rate, however. Different lenders weigh the same factors in different ways. Some are quite myopic about your credit score and barely pay attention to anything else. Others look at your credit history to see what sorts of debt you seem to do well with and which sorts have led to difficulty. A chain-store retailer, for example, may give extra attention to your track record paying on store-issued credit cards and less attention to outstanding medical debt that hurt your credit score years ago.

In short, interest rates are strongly shaped by your credit, but they’re not 100% determined by it. Be prepared to do a little personal loan shopping until you’re confident you’ve found the best terms available to you.

Factors that Determine Interest Rate

Credit Score
Credit History
Employment Type and Income
Loan Size
Length of Term

Your Credit Determines Terms for Your Personal Loan

In the same way, your current credit history and three-digit credit score shape the rates and other terms available to you, the way you handle this loan going forward shapes your future credit history and credit score in return. As you make your monthly payments, your credit history grows stronger and your credit score gradually rises. It takes time to build, repair, or strengthen credit – but it may not take as long as you think it will.

One day, you’ll need financing again. You’ll want to make another major purchase, finance a vehicle, buy a house, pay for a wedding, or go on a vacation. The amounts and terms available to you when that day comes will be largely shaped by what you do between now and then. If you have good credit, you can make it better. If you have no credit, you can establish it between now and then. And if you have bad credit, you can start fixing it.

It may not be easy, but it doesn’t have to be as hard as it sometimes seems. And you don’t have to do it alone.

Should I Use My Savings Instead?

This isn’t a bad idea, especially if you’ve been saving up specifically for whatever it is you’re about to buy. On the other hand, you don’t want to empty your emergency funds or other savings accounts if you can avoid doing so. It’s sometimes worth financing small purchases (anything that costs less than a new car, for example) in order to keep money in reserve.

That’s assuming we have savings, of course. As Forbes recently reported, more and more of us are living paycheck-to-paycheck these days.

A new survey shows that 49% of Americans expect to live paycheck to paycheck each month this year. More strikingly, 53% say that they don't have an emergency fund that covers at least three months of expenses. At the same time, 91% say they want to develop better money habits this year.

They’re talking about our language. Taking more effective control of your personal and small business finances is what Loanry and the rest of the Goalry family are all about. It’s why we keep sharing these articles and offering free access to online money management tools. It’s also why you should keep reading.

If you can realistically put off your major purchase for another six months or a year until you’ve saved enough to simply pay cash, that’s often ideal. If not, the first “better money habit” you might want to develop is taking the time to explore your financing options before you buy.

Why Not Use Credit Cards?

You can certainly use your credit cards to purchase appliances, home electronics, or whatever else you need. It’s important to consider several things before making that decision, however.

High Interest-rate

Credit card interest tends to be higher than the rates you may be able to qualify for on a personal loan for a major purchase. A few percentage points may not seem like a big deal on paper, but over time, the dollar difference adds up faster than you’d think.

I’m sure you’ve noticed that paying your minimum payment on your credit card bill doesn’t seem to lower the balance very much from month to month. That’s because credit card billing is intentionally set up to keep you paying interest each month and very little towards the principal. A personal loan is a term loan. Your payments are the same each month and you know exactly when it will be paid in full. There’s no temptation to pay just enough to get by until next month.

You Shop More Than You Need With The Credit Card

Finally, credit cards make impulse buying much easier than it should be. You are thinking to buy a new laptop or desktop pc and you see in the store – it’s shiny and new and the description makes all sorts of promises. The plastic practically leaps out of your wallet or purse, begging to be used. How often have you been excited about a major purchase only to realize a few days later that you overlooked something very important to you in the excitement of the moment? That you probably didn’t need the “extended warranty” or should have negotiated better delivery options? Plus, it never hurts to let the salesperson see that you’re a methodical shopper, not likely to pull the trigger five minutes into your first visit.

Then again, getting a personal loan for a major purchase isn’t the time-consuming, laborious process it was a generation ago. You can log in from any connected device and in a matter of minutes submit your information.

“Zero-interest” Trap

So you’re at the electronics store, and there’s the amazing new 240” HD Quantum Plasma something-or-other TV and home entertainment system you’ve been lusting after ever since you first heard they were coming out. Or maybe your wife or girlfriend wants you to buy a brand new washer and dryer. The salesperson asks if you have any questions, then casually mentions that they have “interest-free” financing or that you get special terms if you sign up for one of their store credit cards today. Awesome, right?!

Well, maybe. Sometimes major chain stores offer promotional financing similar to what automobile dealerships do periodically. It’s possible that if you look over the details, you’ll discover it’s a pretty good way to get yourself that TV or entertainment system and finance it for practically nothing. The key is to really look at those details because other times you’ll find that “zero interest” only applies to the first few months, after which all of that interest is suddenly added back in and you’re actually paying a rate closer to your age than your shoe size. And most credit cards from chain stores are just that – credit cards. You may save a few points here or there when you use them at that store, but otherwise, they have the same advantages and disadvantages as any other card.

Be Patient and Compare All Loan and Credit Card Options

Store financing isn’t always bad. Like so many things, it’s all about knowing what you’re getting into. Compare the terms you’re being offered to those you get on your existing credit cards, then compare both to the terms you could get with a personal loan for a major purchase. You might be surprised how much difference you’ll find.

Oh, and by the way… are you SURE you need that 240” HD Quantum Plasma whatever-it-was? I mean, that thing will hardly fit in your house. Did you notice the great price on last year’s latest and greatest home entertainment system – the one they’re replacing to make room for this one? Ask your salesperson about that one; I’ll bet you could get a pretty good deal.

How About Rent-to-Own Places?

No. Just… don’t. Unless you for some reason need to fill a living room or office for a month or two then return it all, there’s no point even walking into most of these places. I’m happy to talk pros and cons of credit cards, dealer financing, personal loans, how to lower your interest, when to consider refinancing, etc., but if you’re seriously considering rent-to-own, I respectfully advise you save yourself some trouble. It’s better to simply withdraw all of the cash you have in your account and go throw it into the street and walk away.

Start Looking For Personal Loan Online With Your Cup of Coffee on the Table

The explosion of the internet in the 21^st century has opened up possibilities inconceivable a generation ago. That includes a plethora of online lenders with low overhead and national reach. Have you ever noticed that in almost every other industry, companies compete for your business? In traditional lending, however, you’ve been expected to persuade financial institutions to accept you as a customer. That’s backward.

At Loanry, we maintain a curated database of reputable online lenders. When you’re ready, let us know a little bit about you and what you need. And we’ll hook you up with a lender we think is most likely to win your business. In other words, the lenders compete for you – not you for them.

It’s always up to you, of course. If you don’t like what they offer, you walk away – no cost, no-obligation, no hurt feelings. But I gotta tell you, from the feedback we get, that doesn’t happen very often. It turns out we’re pretty good at this, and oddly, we enjoy it.

When you’re ready to explore that personal loan for a major purchase, let us know.

Benefits of using an Online Personal Loan.

In Conclusion

If you’ve decided it’s time to make the move and finally get new tv and audio equipment or replace those old kitchen appliances, then it’s also time to talk about a personal loan for a major purchase. You have several options.

Your local bank or credit union may be willing to consider extending your credit for purchases like these, assuming you have pretty good credit and can document your income from the past several years. It’s also helpful if you have an existing relationship with the institution – maybe a checking or savings account you’ve had for a while. We’ve already looked at credit cards and store financing as options. And you’ve probably figured out I’m not a fan of rent-to-own.

Blaine Koehn

Blaine Koehn is a former small business manager, long-time educator, and seasoned consultant. He’s worked in both the public and private sectors while riding the ups-and-downs of self-employment and independent contracting for nearly two decades. His self-published resources have been utilized by thousands of educators as he’s shared his experiences and ideas in workshops across the Midwest. Blaine writes about money management and decision-making for those new to the world of finance or anyone simply sorting through their fiscal options in complicated times.

Personal Versus Business Loans: The Differences Revealed

Posted on December 2, 2019 | by Julia Peoples

There is a lot to know when you are considering a loan. It is important to fully understand your needs when it comes to a loan, so you can be sure to get the right loan for your needs. There are personal loans and business loans and many variations of each one.

Personal vs Business Loans: What You Need to Know

Business loans and personal loans have many similarities, so you should educate yourself on the details. Continue reading to find out the difference of personal versus business loans.

What Is A Personal Loan?

There is a lot to understand about personal loans when you are trying to make the decision of personal versus business loans. You should fully understand all the details about personal loans. I like to start with the simplest definition of personal loans. It is when a lender allows you to borrow a specific amount of money. You then agree to pay back the money with regular monthly payments.

The lender can be a bank, a credit union, online loan companies, even family or friends. The lender charges you a fee to allow you to borrow money from them. That fee we call interest. The lender decides your interest rate and determines it by your credit score. You have higher interest rates when you have a low credit score.

There are various personal loans by many different lenders. You do not have to select the first loan you see. But you need to make sure that whatever loan you choose, it is a good fit for you. You should do personal loan shopping before you make the final decision when it comes to your personal loan choices. It is also important that you can afford the loan payments. If you cannot afford the payment, is can negatively impact your credit score.

What Is a Business Loan?

When it comes to personal versus business loans, there are no limits to how you can use a personal loan. There are limits, however, on how you can use a business loan. A small business loan is when you request to borrow money from a lender as a business owner. The lender can be the same types of lenders as a personal loan, a traditional bank, a credit union, or an online lender. If your business has multiple owners, then all of the owners are requesting to borrow money for your business.

You are agreeing to repay the loan by making regular payments of a set amount. Just like a personal loan, lender charges interest as a fee for allowing you to borrow money. These terms vary from lender to lender and based on your credit and qualifications. When you sign the loan agreement, you are agreeing to the terms of the loan.

The lender sets the terms, which includes the interest rate and the length of the loan repayment period. The lender determines how often you repay the loan, such once a month, or every two weeks. These terms drive how much you pay with each payment. As long as you have a fixed interest rate, the amount you repay remains the same and does not fluctuate.

Are There Specific Uses For a Business Loan?

Yes, one of the largest differences between personal versus business loans is that business loans must be used for business purposes. Some business loans have specific intentions and must be used for that. For example, if you get an equipment loan, you must buy equipment with it. If you get a real estate loan, you must use it to purchase real estate. There are business lines of credit that can be used for smaller business items. Then, there are SBA loans that are intended for larger business needs. No matter which type of business loan you get, it must be used for the business.

You should have put thought into the purpose and not just apply for a business loan on a whim. Few lenders want to invest in a business that does not seem to have a lucrative idea, so make sure your plans are thought out. The lender wants you to show them that you are and can continue to make a profit. You must understand how to finance a business with any type of loan you acquire.

Can You Use A Personal Loan For Business Purposes?

One of the major differences of personal versus business loans is that you can use a personal loan for absolutely anything you want. With a few exceptions, there are no limits to what you can do with a personal loan, especially if it is an unsecured loan. Secured loans are slightly different. When you apply for an unsecured loan with a lender, you ask for a certain amount. The lender typically asks what your plan is for the money, but they never really verify it. Once you are approved, the lender deposits the money into your bank account. From there, you can do with it whatever you want.

If you choose to use a personal loan for business needs, that is up to you. One thing to consider is, if you are taking out a personal loan for your business, you are responsible. If you, Jane, are taking out the loan that makes you responsible for paying back the loan, no matter what happens to the business. Even if the business fails, you still have to make those loan payments every month. If you do not, it negatively impacts your credit. So if you do not pay back the loan, the creditors will come after you to pay them.

If you are part of S Corporation or an LLC, you may not be financially responsible for the loan, if the business does not do well and closes. Even if you have not paid the loan, it may not impact your credit. You also may not be subjected to collection calls in the middle of dinner.

Positives to Using A Personal Loan Instead of A Business Loan

There are many reasons why you might consider personal versus business loans.

Applying for a personal loan is much easier than applying for a business loan. The application process is faster and you get a response, and the money, much sooner. You can apply for a personal loan online. When applying for a personal loan the bank wants to know your personal credit history and credit worthiness. When applying for a business loan, the bank wants to know everything about the business, including tax returns, profit sheets, and the business plan.

You may be able to get a better interest rate when you apply for a personal loan. You probably have a better and longer credit history than your business, which helps when securing loans. Many lenders are less willing to invest in a business, especially a new one that does not have a proven record of success. Lenders want to make money, too. If your business does not look like you (and ultimately they) can profit from it then they may not allow you to borrow the money. If you go to an online lender, you can have your money within 24 hours.

Some business loans can take several months before you find out whether the lender approved you. Personal loans usually take a couple of days. Some personal loans give you a response the same day and if you got it, the money is in your bank account the next day.

Negatives Of A Personal Loan Over A Business Loan

There are some downsides to personal versus business loans. The biggest negative is one that I have mentioned before. That is, if you take out a personal loan for your business, you are responsible for repayment. It does not matter if your business fails or succeeds, you are personally responsible for the loan. It does not matter how the business was set up. When you take a personal loan, you are accepting personal responsibility.

When you take out a personal loan, it impacts your credit and debt to income ratio. You are taking on the personal loan as your own personal debt. So it adds to the amount of debt you are currently using. It means that it increases your debt to income ratio. If your only income is the business and it is not incredibly profitable right now, it may seem that your debt to income ratio is really high. This could prevent you from getting other items, like a house or a car.

Personal loans tend to be for smaller amounts, so it may not be a large enough loan for you to do what you need. Not only are personal loans typically for several thousands of dollars, you are limited in how much you can borrow based on your salary. As mentioned above, if your only salary is the business and it is not profitable, that may hurt you when you are trying to get a personal loan.

Can You Use Both Types of Loans to Start Up a Business?

When you want to create a start-up business and you are thinking about personal versus business loans, you should always consider the amount of money you need. You certainly can use either a personal or business loan to fund a start-up, but you have to determine which one is the right one for your needs. If you have a start-up business, most likely you do not have anything and you need to purchase it all.

You need to think about your inventory. What are you selling? How are you going to get those items? Do you need to hire people and how are you going to pay them? You might need equipment or a space to rent. All of these items cost money and you may need to take out a loan to have the cash flow to begin acquiring these items. You may decide that you are going to start your business in your home and you are the only employee.

I encourage you to do everything you can to begin making a profit before you obtain a loan from a lender. See how far you can get on your own before you begin to borrow money.

Personal Loans versus Traditional Business Loans

One of the largest differences between personal versus business loans is that business loans tend to be for larger amounts of money over longer periods of time.

An SBA loan is one of those business loans that tend to be for higher amounts of money. They are similar to a mortgage in that they are a large commitment. SBA loans are backed by the Small Business Administration. This is a government agency that guarantees 85 percent of the loan. The federal government does not provide the loan, that comes from an approved vendor. These vendors are typically banks. The government is just backing the loan so that if for some reason you do not pay it, they will cover about 85 percent of it.

These loans can only be used for business purposes, such as purchasing equipment, refinancing debt, buying real estate or other businesses, or to be working capital. These loans can be for as much as $5 million dollars and you can take up to 25 years to repay the loan with regular monthly payments. They do have fixed and variable rate options which can help with the interest rates. These loans may have a lengthy loan application process that requires background checks. You may have to provide collateral for this type of loan.

There are some other types of traditional business loans, such as an equipment loan which is used specifically for the purpose of acquiring new equipment for the business. The equipment you are buying becomes collateral for the loan. If you do not repay the loan, the lender will take that equipment. However, this may help you get a better interest rate. Commercial real estate loans are similar to equipment loans except these are specifically for purchasing new real estate for the business. These types of loans often have reasonable interest rates.

SBA 7(a) loan fixed interest rates in 2022

SBA loan size $25,000 or less $25,001 to $50,000 More than $50,000

7(a) loan paid off in under 7 years* 9.00% 8.00% 7.00%

7(a) loan paid off in over 7 years* 9.50% 8.50% 7.50%

*Rates calculated with the current prime rate of 4.75%

Does My Credit Matter?

When considering personal versus business loans, one thing that matters either way if your credit. Your credit is always important, but in the case of personal loans versus business loans, it could be your personal credit, or the business credit, or both that matters. It all depends on the type of loan you are requesting and how your business is set up.

For a personal loan, only your credit matters. For a business like an S corp, only the credit of the business matters. If you are simply self-employed or have an LLC, your credit, along with the business credit may matter. What is important to know is that you want to keep your credit in the best possible shape that you can. Your credit not only impacts your ability to get a loan, but it also has much deeper implications.

When considering personal versus business loans, you must remember that a personal loan directly impacts your own credit and if the business does not do well, you are still responsible for repayment. If you do not repay, it directly impacts your credit and your ability to do other things, like get a house. This is important to keep in mind when you are thinking about personal versus business loans.

Conclusion

In all the information I provide about personal versus business loans in this article, I only touch slightly on deciding which one is best for you at this time. Most importantly, you need to make sure that you can afford to repay the loan. Businesses are hard because unless you are some mega-company that makes millions of dollars per year, you just do not know how well the business will do. You may have years where you make large profits and then lean years where you make little to no profit.

It can be hard to predict. You need to create a business plan that allows you to make smart decisions when you make a large profit but can also carry you through the lean years. It does take money to make money. However, you need to be sure you can repay your debts.

Julia Peoples

Julia Peoples is a long-time business manager focused on providing decision making assistance to the public. She works with people at key points of their lives who are making important retirement and financial decisions. She has had many articles published that educate the public on sound financial decision making.

Julia writes for those who are working towards financial freedom or a better understanding of how finances work. She has shared her financial insights with individuals on a one on one basis for years.

How to Find Personal Loans with Good Credit and Low Income

Posted on November 20, 2019 | by Julia Peoples

When you need a personal loan, it can be a stressful time. It can be stressful because you might be in a difficult financial position. You may need money quickly to pay for an emergency expense. It can also be stressful if you do not fully understand the details of a personal loan. There are some points you should be aware of before you agree to a personal loan. While it is fairly easy to get personal loans with good credit, your income may make a difference. Before you consider applying for a loan, make sure you completely understand how your credit and income impacts your ability to obtain a loan. Continue reading to find out all that you need to know.

All You Need to Know About Personal Loans with Good Credit and Low Income

I know you came here to find out how to get a personal loan with low income and good credit score. But let’s first go over the basics, just in case.

Personal Loan Basics

If you are considering a personal loan, it is important to understand the most basic definitions. Personal loans tend to go by different names, but most of them are personal loans. The lender can be a bank, credit union, online lender, or even a friend or family member. When you borrow the money, you make a promise to repay it within a set period of time. You usually make monthly payments for three or five years. The lender charges you a fee, better known as interest, for your ability to borrow the money.

Lenders get to set their own interest rates. They set those rates based on your credit score. It is easier to get better personal loans with good credit. The better your credit means the lower your interest rate, which means the lower your monthly payment. Most personal loans are unsecured loans, which means there is no collateral attached to them.

This type of loan is often riskier for the lender and has a higher interest rate. If you are interested in a personal loan, you should do some personal loan shopping. Loans are not a one size fits all type of lending. You should make sure that you read all the fine print of all loan agreements. You should make sure the loan you obtain is the right one for you.

Can I Get a Personal Loan With Low Income and Bad Credit?

If you have less than perfect, or maybe even, bad credit, that’s bad news. The good news is you can always work to improve your credit score. It’s really difficult to get a decent deal i.e. interest if you have both low income and bad credit. The lender just doesn’t have anything to hold on to and believe that you will be able to pay off this loan. So ultimately, you might even be denied a loan.

But, you can improve your credit score and increase your chances. It does take time and consistent effort on your part. The better your credit score is, the more likely a lender is going to lend you money. Use that as your motivation.

For now, let us focus on how to improve your credit score. The first thing you want to do is pull your credit report. This allow you to see your credit report, which includes your credit score. Once you see it, then you know what it is and know where to go from here. Take a good look at it and check for errors. If there is anything that does not look right, you must have it corrected or removed immediately. You can contact the reporting agency and have it corrected. If you go to their website, you should be able to find the appropriate form.

After that, you need to eliminate as much debt as possible. The more debt you carry means the lower your credit score will be. Most lenders prefer to see your debt to income ratio below 30 percent. This is the amount of debt you have in comparison to the amount of income you receive. Lenders feel that the more debt you have, the less likely you are to repay it. You may want to consider finding additional means of income to pay off more debt faster. Perhaps you can get a side job, or sell some items around your home to make more money.

In addition to paying off your debt as quickly as possible, you must pay all of your bills on time. You must also pay them in the correct amount. One of the top reasons a credit score drops is because you are making late or missing payments. You must make every effort to make all payments on time.

How Do I Know If My Credit Is Good?

Your credit score goes hand in hand. While your credit score is a three-digit number that appears on your credit report, it is an indicator of how well (or not) you have used your credit.

Whoa…I have said the word credit about four times and each one means something different. So, I am going to pause for a moment and do some explaining. Your credit report shows your credit history. When I say credit history, I mean anything and everything that has some credit implications. There are items that have an impact that you probably do not realize. It shows your employment history and how long you have been in your current job. And it shows how many jobs you had and for how long. It shows your address and how long you have lived there. It also keeps a record of your previous addresses and how long you lived there.

These items show how stable you are. When you move around a lot, lenders do not consider you to be that stable or secure. Your credit history shows all the credit you have been given and how you use it. It shows loans, credit cards, mortgages, etc. The lenders also get to see any late payments and even loans on which you defaulted.

Your credit report also shows your credit score. A typical credit score is in the range of 350 to 850. Most people have a credit score that falls between 600 to 750. If you have good credit, it falls between 670 to 800. You should be aware that anything below 570 is in danger of bad credit.

When you have bad credit, you may find it is difficult to be approved for a loan. Naturally, it is much easier to get personal loans with good credit. If you have less than perfect credit, do not stress. You can still obtain a loan, it just takes a little more work. Do some research and look around for the best loan for you. You may want to consider a personal loan finance company.

And What If I Have Low Income?

Your income is important when it comes to obtaining a personal loan. Lenders want you to have a stable and consistent source of income. They also want you to be able to prove it. A lender also looks at other factors to determine if you have a low income. Some of these factors are the size of your family and where you live. It is possible to find loans with low income, but you have to do a little more research and work. If you search for personal loans good credit low income, you can find some solid options for yourself.

You may see that loans for those with low income have high interest rates or are only for low amounts. If you have low income, you must be cautious with a loan that you obtain because some loans may make your financial situation worse. You can always find personal loans with good credit, even if you have a low income. If you have low income, you could consider getting a co-signer for your loan. This person promises to repay the loan if you are not able to do so. This person’s income is a factor in the loan, so you may be able to get a better loan with a co signer.

What is More Important – Credit or Income?

One is not more important than the other. They are both equally important. Your income does not impact your credit score, but it impacts your ability to pay your bills, which impacts your credit score. A lender can obtain your credit score without you having to provide documentation. For a lender to get a true idea of your income, you must provide documentation to the lender. They often want pay stubs as proof of income. They also may want to see your previous tax returns, or W2s, as well as bank statements.

Credit scores and credit history show the lender how you have used credit and paid it back in the past. Income shows lenders your ability to make the payments to repay the loan. Sometimes, if you do not have the best history but you have really high income, a bank may be willing to lend you money. Also, if you have low income but have an excellent credit history of always making timely payments, the lender may allow you to borrow money. They are both an important factor in the lender’s decision. I know I have mentioned this a few times, but it is important to repeat: it is much easier to obtain personal loans with good credit.

What About the Interest When I Have Good Credit and Low Income?

Another item to consider when thinking about a loan is the interest. This is actually a big factor. The lender adds interest to that amount as a fee for allowing you to borrow the money. The more risk you pose to the lender than the higher the percentage of interest. A lender makes the decision on how much interest to charge you based on your credit score. The main amount that you would like to borrow is called the principal. When you obtain personal loans with good credit, the interest rate is lower.

If you have great credit, you can expect an interest rate from 10 percent to 13 percent, but if you have just ok credit, you can expect interest rates from 14 percent to 20 percent. That is correct, your interest rate can go up to 32 percent.

Credit score is what influences the interest you get. Low income can only influence the amount you can get, since you cannot take out a large amount of money if you don’t have enough money to pay each month. But again, be aware of high interest when you have low income, and avoid these kinds of loans. If you have good credit, don’t be fooled into taking out a loan that will only make your financial situation worse.

Credit Score Average Loan Interest Rate 720-850 10.73%–12.50% 690-719 13.50%–15.50% 630-689 17.80%–19.90% 300-629 28.50%–32.00%

Are There Different Types of Personal Loans?

There are different personal loans with good credit available to you. There are traditional loans that you can obtain through a traditional bank, that you probably think about when you think about a loan. Those are the big banks that have an actual building that you can visit when you need help. You can also obtain a loan from a credit union. You can also obtain a loan from an online banker. In the past, online lenders where considered for those who have bad credit. That has changed and now all types of personal loan shoppers obtain loans online. Online lenders offer quick and easy application processing. You are able to upload all documents in the same place as where you fill out the application.

There are also secured and unsecured loans. A secured loan means that there is collateral associated with the loan. The typical type of secured loan is a mortgage or auto loan. When you have collateral attached to a loan, if you default on the lender, they can take the collateral. Unsecured loans do not have collateral attached to them, which makes them a bigger risk for lenders.

Do I Need a Proof of Income?

You always need to provide some type of documentation any time that you apply for a loan. You always must prove your identity to the lender. They want to make sure that you are who you say you are. Any lender wants to see proof of your income. They may want recent pay stubs or bank statements showing how much income you receive regularly. If you do not have a standard job and do contract work or some other form of self-employment, the bank may want to see your tax returns.

The sooner you have all of these documents prepared and ready for the bank, the faster you can be approved. Lenders may also ask for some other type of document or may have additional forms for you. You should respond quickly to any and all requests. Failure to do so may result in your loan being delayed and even denied, even for personal loans with good credit

Conclusion

I have shared a lot of information about personal loans with good credit. The key piece to obtaining personal loans with good credit is to make sure you can afford to repay the loan. It is important that you are able to make those monthly payments. When you are not able to make those payments, you are adding stress to your life and could potentially negatively impact your credit score. You should create a budget to make sure you are able to afford any loan that you plan to obtain. It is also important to save as much money and reduce as much debt as you can. Taking both of those steps will put in you a better financial position.

Julia Peoples

Personal Loans for Unemployed: Do They Exist?

Posted on March 30, 2019 | by Brandy Woodfolk

One of the biggest times we need financial assistance is when we are unemployed. If we have no money coming in, we need funds to help us get through this time. The question is whether there are personal loans for unemployed people and how on earth can we get one. The good news is that you can get a loan even if you are unemployed. However, you still need to have some alternate form of income and a pretty good credit history. Otherwise, you’ll be dealing with alternative lenders who tend to have higher interest rates and fees.

Are There Personal Loans for Unemployed People?

Let’s face it: if you do not have any money coming to pay back the loan and your credit shows you have a history of not making payments, no one is going to want to loan you money. And really, would you loan a friend money that never paid you back and currently had no way to pay you a new one? Probably not- not unless you are okay with just gifting the money to them. Otherwise, you would likely stay away from that situation.

So, how do you go about getting personal installment loans unemployed? Let’s talk first about other types of income that can help.

Alternative Financing Options When You’re Unemployed: Caution!

Co-signer Loans

If you are having trouble getting a personal loan unemployed, you may find someone who is willing to co-sign the loan with you. This means that the co-signer is agreeing to make payments that you do not make. While co-signer loans can help you get approved regardless of your income or credit, that does not make them the best choice.

There is a lot of risk involved. The bottom line is that if you do not make the payments, your co-signer is going to owe the payments while you enjoy the benefits. Does that seem fair? Of course not, so it is of little surprise that so many family relationships and friendships are ruined over co-signer personal loans. Besides risking your relationships, there is also the fact that the co-signer can take you to court for everything they had to pay out plus extra costs if you leave them carrying the bag.

You could end up spending more out than you originally owed. Think carefully about this option before jumping on it. If you are not absolutely sure you can pay the loan back, do not bother with a co-signer loan.

Credit Card Cash Advance

If you have a credit card, one of the easiest personal loans for unemployed people is a cash advance on that card. Your credit card company may allow you to borrow cash against your credit line so you can pay something that does not accept credit cards, like your landlord. Here’s how it works: Let’s say I have $1,000 available in credit on my credit card.

If my credit card company allows cash advances, I can go to an ATM or a teller and withdraw that $1,000 in cash that I can then use to pay my rent. The $1,000 is deducted from my credit card and I go about making my monthly payments. Each credit card company is different but some will likely charge a higher interest rate on the cash advance than they do on your purchases. Still, it can be cheaper and easier than taking out a personal loan for unemployed periods of time.

Home Equity Loans

When your home is worth more than the amount you owe on it, that is known as equity. If you have equity in your home, it is possible to borrow on it- the equity, not the full value of the home. You will not get the full amount of equity most of the time. It works a little more like this: If your home’s value is worth $100,000 and you only owe $50,000 on it, you have around $50,000 in home equity.

If you need a loan, you may be able to borrow 80% of the value of the home minus what you owe. In this case, 80% would be $80,000. If you subtract what you owe, that leaves $30,000, which is most likely the amount you would get approved for. Home equity loans are generally paid back like a mortgage- with a fixed payment for a fixed term.

Car Title Loans

Car title loans can be a quick way to fix immediate problems. But they can also give you more problems to deal with. I learned this lesson the hard way. I had a Chevy Suburban that I loved. My husband was laid off so I needed help paying the immediate bills. I knew he would get hired again soon so I did not think taking out a title loan would hurt us.

I was so wrong. So, I borrowed $1300 on my Suburban making the monthly payments over $200. I thought we could handle that, until my brain kicked in and I realized that payment was only for interest. I had to pay a lot more than that if I wanted to pay off the loan.

Because of the high interest, I could not afford to fix my truck when it broke down, so there it sat in my driveway for over a year while I was making ridiculous payments on it. And when I finally got it paid off over a year later, my truck had sat still for so long that it would have cost way more than I could afford to get it working again.

I ended up having to sell it for way less than I should have been able to. Though title loans can save the day now, it is very important to factor in all of the interest and fees and look at how it will affect your future.

Some Payday Loans

Fast payday loans are another option that should be very carefully considered, which I also learned from personal experience. First, most payday loan companies start you at a very low amount- about $125 for your first loan. This may not be worth even taking the loan out depending on how much money you need. On your next payday, you go in to pay off the loan plus interest. You can usually re-borrow your loan amount that same day.

It seems simple and easy enough, but the interest can add up to tremendous amounts. For instance, when we were having a broke period at one point, I took out a few payday loans. One of them was for $500. I was to pay back $580 on my next payday, which I did. The problem came in with the fact that I could not afford to give them that $500 that paycheck and feed my family.

I took the $500 loan again. This led to $320 that first month in interest alone. It took me nearly four months to be able to pay the loan back meaning that I paid a total of $1280 worth of interest only. I paid back $1780 on a $500 loan I borrowed. If it is at all possible, find another solution.

What Steps Do I Take To Get a Personal Loan While Unemployed?

Taking out personal loans for unemployed people is the same process as it is for the employed. The only difference is the precise information you will need to apply. Follow these 3 loan shop steps to find personal loans for unemployed people:

Find a lender and determine what documentation you will need to apply.
Gather your necessary documentation.
Fill out the application.

Upon approval, thoroughly read and then sign the contracts.

Decide if You Really Need a Loan-Try These Things Instead

Sometimes when we are broke and unemployed, we think we need more money than we actually do. In fact, there are other ways that can save us from having to take out a loan. Before running to the first financial institution you can find, try the following ideas first. You may find that you do not need to borrow a dime.

Make a Budget

Even if you do not have a single penny coming into your home, you still need a budget. You should understand what you need, what you must pay, what can wait a little while if it has to, what you can let go of, and so on. Making a budget can help you see what you really need to work toward and whether or not you actually need the loan. If your bills are not due for a few more weeks, that gives you time to work on other ways to make money. It is unwise to add a loan into the mix if you are already strapped for cash and you have another option.

Dip Into Savings

I personally hate touching my savings account. It takes so long to put money in there that the last thing I want is to take it out, especially when I am saving for something special. For instance, I am currently saving to take my family to the beach for the first time in my kids’ lives. I have almost reached my goal, but last night, I realized a bill I had forgotten about was coming due so I had no choice but to take the money from savings since this bill would have continually added interest.

Sometimes, the safest thing to do is use savings. I mean, that is kind of what it is there for. If you have to choose between a loan and replacing your savings later, remember that using your savings does not cost you interest.

Find Ways to Make Money with a Job

Obviously, if you are unemployed, you should look for another job, but that may take some time. In the meantime, there are other ways to keep your head above water. Have a yard sale for some quick cash. Babysit or pet sit for family, friends, and neighbors. Get paid to do yard work or wash cars in the neighborhood. Clean some houses.

File for Unemployment

If you meet certain qualifications about the way you lost your job or had to leave your job, you may get approved for unemployment. It never hurts to apply.

Alternate Forms of Income

A job that you clock in and out of is not the only type of income available when applying for a personal loan for unemployed people. Below are just a few other options that are considered:

Social Security
Unemployment Benefits
Pension Funds
Disability
An Inheritance
Investments
Tip Income
Child Support
Alimony
VA Benefit Income
Spousal Income
Verifiable Side Job Income
Rental Income
Royalty Income

If you have access to any of these listed or similar types, you may still qualify for a personal loan for unemployed borrowers. Keep in mind that not all loans are created equal so even if one lender turns your alternative income type down, others may not. It is best to do some unemployed personal loan shopping for the right lender for you.

If You Still Need Emergency Cash Loans for Unemployed Times

Even with all of the above steps and information, you may have to take out emergency cash loans unemployed or not. If that is the case, do not feel bad. Sometimes we do all we can and still come up short. If you still have to make this move, consider carefully which move you make. Weigh out the options of loans that are available to you and be as smart as you can about any you pick. It’s important to find a good lender, and Loanry can help you with that. If you’re in need of a loan right now, we have some options for you.

Do not borrow more than you need so you do not get yourself in an even deeper hole. If you only need to borrow for a couple of weeks, try a short term loan. If it will take you a while to repay it, your best option would be a personal installment loan so you have a longer period of time to pay for them.

Final Thoughts

Taking out personal loans for unemployed periods can be a big step, especially if you are unsure of how long that period of time will last. You should do your research and be sure you choose a loan that matches your needs and abilities. Using a company like Loanry can help you locate personal loans for unemployed by helping you find a lender that may be more helpful in your situation than a burden. Check out today us to see how we may be able to help you.

Brandy Woodfolk

Brandy Woodfolk is an educator, home business owner, project manager, and lifelong learner. After a less than stellar financial upbringing, Brandy dedicated her schooling and independent studies to financial literacy. She quickly became the go-to among family, friends, and acquaintances for everything finance. Her inner circle loves to joke that she is an expert at “budgeting to the penny”. Brandy dedicates a large portion of her time to teaching parents how to succeed financially without sacrificing time with their little ones. She also teaches classes to homeschooled teenagers about finances and other life skills they need to succeed as adults.

Brandy writes about smart money management and wealth building in simple and relatable ways so all who wish to can understand the world of finance.

www.linkedin.com/in/brandy-m-woodfolk/

Can You Refinance A Personal Loan from the Same Lender?

Posted on February 25, 2019 | by Julia Peoples | Leave a Comment

When you refinance a personal loan from the same lender may seem like a good idea. However, you should consider some things before deciding to refinance. You should understand how and if you qualify. You should also make sure you understand the refinancing process. Then you could ask yourself the question rather or not you can refinance a personal loan from the same lender.

Refinancing Your Loan From the Same Lender

Refinancing your current loan makes sense when it saves you money. When refinance a personal loan from the same lender, you may get a lower interest rate. You can shorten the amount of time you have to pay back the loan. If interest rates have gone down since you first got the loan, you could get a better rate now. Decreasing the length of time you pay back the loan may also decrease how much you pay in interest.

If you have a variable rate loan, you could switch to a fixed rate loan. This stops your monthly amount from changing, or increasing, every month. The lender may charge you fees or penalties to refinance. Factor that into the decision when determining if you are saving money. Make sure you look at the bottom line. Determine how much money you pay when the loan is paid off. You may end up paying back the loan for a shorter period of time and still pay more money in the end. You should do personal loan shopping to make sure you are getting the best deal.

Should You Refinance a Loan to Payoff the Same Lender?

When you refinance a loan from the same lender it will make sense in certain instances. Often times, you aren’t able to refinance a personal loan from the same lender. If you are, be sure to look at the fees and costs associated with a refinance, even if you choose to go with the same lender. You should be aware of fees such as an application fee, an origination fee, early repayment fees, and loan insurance.

Some lenders are willing to negotiate some of these fees. Be sure to ask. In some cases, lenders take the fees directly from your loan which means less money in your pocket. Be sure to read all the fine print. When the fees add up to be too much, it can negate any savings you might get from refinancing. You want to compare and shop personal loans to make sure your current lender offers you the best refinance options.

What Does Refinancing a Personal Loan Mean?

When you refinance a personal loan from the same lender, you are taking out a new loan so that you can pay off an existing loan. Typically, the purpose when you refinance a personal loan with the same lender is to get a lower rate of interest or to decrease the monthly payment amount. You may be able to get lower monthly payments by agreeing to a longer repayment schedule.

Keep in mind, this increases the total amount you pay back. Your original loan may not have been ideal, but it was the best you could get at the time. A finance may allow you to get a more reasonable loan agreement.

Basically, you are taking out a new loan to pay off the old loan. Sometimes this gives you some extra cash, but not always. This happens often with mortgages. You may have gotten your mortgage 12 years ago with an interest rate of 8%. The rates may have come down to 5% and refinancing could save you hundreds of dollars.

6 Steps to Refinance a Personal Loan From the Same Lender

When considering if you want to refinance a personal loan from the same lender, there are some steps you should take to make that decision. Refinancing may not be the right move for you at this moment. Taking these steps into consideration may help you determine if it is.

1. Make Sure Your in Good Financial Shape

You should check your credit first before doing anything else to make sure your refinance for a personal loan won’t be rejected. You may have an error on your credit report. While this is usually an easy fix, you don’t want to have errors on your credit. These can prevent you from getting loans, or other types of credit. You want to make sure that you aren’t carrying too much debt.

Be sure that your debt to income ratio is in a good place. If your employment isn’t stable, that could impact your ability to get a loan. If you hop from job to job, this can impact your loan worthiness. If you have too many different loans currently, most lenders won’t approve you for another. It appears to the lender that your income is coming from loans and not your income.

2. Compare Personal Loan Options With Your Lender and Others

Your current lender may not offer you the best refinance deal. When you refinance your personal loan from the same lender, you want to decrease your monthly payment, or the overall total amount you pay back. You may also want to decrease the length of time it takes you to pay back the loan. You should compare your current loan other options from the same lender. You should also compare what other lenders can offer. A different lender may give you a better offer.

3. Calculate Refinancing Cost (Beware of Fees other Fine Print)

When you refinance a personal loan from the same lender it comes with fees. You should be aware of the fees before you decide to refinance a personal loan with the same lender. Do not ignore the fine print. Read everything and make sure you understand what you are paying. Fees can add up to as much as 8% of the value of the loan. Some personal loan fees that you should look for are a one time application fee simply to fill out the application.

There are origination fees from some lenders. Make sure there is no early repayment fee. Some lenders charge you for paying the loan off early. Check to see if the lenders charges any other fees that may crop up unexpectedly, like a late payment fee. A lender may require loan insurance. Walk away from this lender. A personal loan is unsecured and does not require any type of insurance.

4. Pre-Qualify and Apply

Pre-qualifing for a loan gives you a clear picture of your options and helps you decide in which direction to go. Pre-qualification does not impact your credit. You should be aware that the numbers a lender gives you when pre-qualifying may change when you apply. During pre-qualification, the lender does a soft hit on your credit. This gives the lender a small amount of information.

When you apply for the loan, they do a hard hit on your credit and pull your entire credit history. Some lenders use the term pre-qualified while others use pre-approved. It’s important that you understand if the lender is making a hard or soft inquiry to your credit. Be sure to read all the documents and understand the fine print.

5. Secure New Funding

Once you decide which lender is best for you, you have to apply for the loan. Even if you have a pre-approval, or a pre-qualification, you still have to apply for the loan to secure the new funding. You will fill out the loan application and provide all of the documents, such as your pay stubs and bank account information, that the lender requires.

6. Use Loan to Payoff Existing Debt

A refinance can be handled two ways. One is the lender cuts you a check for the entire amount of the loan. You are responsible for paying off the original loan. You must get the payoff amount from the existing lender and pay that amount. Be sure that the pay off amount is a current amount. The last thing you want is to think you paid off the loan and there is money left to pay. Handling the refinance this way gives you peace of mind that the loan is paid in full. The other way a refinance can be handled is the new lender pays off the old lender directly.

In this scenario you do not have to be involved in paying off the old lender. This is easier on you because you don’t have to be in contact with the previous lender. The new lender will be sure to pay the amount in full and there won’t be a need for any extra payments.

When Should You Refinance a Personal Loan With the Same Lender?

You should only refinance a personal loan with the same lender when it put you in a better financial position. If you are in a situation where you need to decrease your monthly payment, refinancing a personal loan with the same is a better option than accruing more credit card debt. If refinancing gives you a lower payment amount, a better interest rate, or a shorter repayment schedule, then it might be right for you.

In some cases, when you refinance, you may be able to borrow more money. This allows you to pay off additional debt that you have accrued with a payment you can afford.

If the Numbers Make Sense and You’ve Done 1-3 Above

Do not skip over the important steps of checking your financial health. Check your credit report and make sure there are no errors. Look at your credit score and see where you fall. Make sure your debt to income ratio is in a healthy place. Compare loan options.

Do not go with the first lender you fine. Do some personal loan shopping. There are many options available to you. Calculate the fees that you pay with your refinance. Make sure that even with the fees, the refinance is still worthwhile.

After You’ve Reviewed Any Pre-payment Penalties

Some lenders charge you a fee when you pay off your loan early. Check to see if your existing lender is going to charge you to pay off your loan early. If so, factor that in to the cost of the refinance to ensure it’s worth it. Check to see if the new lender has an early payoff fee just in case. You may find yourself in a position to pay the new loan off early. You want to know if you will be charged to do so.

When the Factors Affecting Your Rates and Fees Is in Order

There are many things that could impact the interest rate you get with your loan. Your credit score impacts the loan options available to you. If you have bad credit, you may be penalized with additional fees. Be sure that you understand all the details of your loan, including the fine print. If you have any questions, ask them. Do not sign any documents until you completely understand them.

Compare and Shop Personal Loans

There are many loan options available to you. There are tons of websites that will help you compare and shop personal loans. Many of these sites are user friendly and easy to navigate. To start, you put in the amount you want to borrow, the reason, and your credit score. The website gives you a list of lenders and what options they have available that for which you might qualify.

I say might because this is all theoretical until the lender has checked your credit score and history. These sites give you a good idea of what loans might be available to you.

Conclusion

Refinancing a personal loan from the same lender may be a good option for you to decrease your current loan payment. You may find significant savings in your monthly payment, or in the total amount that you pay for the loan. There are some things you should consider before jumping in. Always look at the fees you have to pay. Always look at how much money you will be paying back in the long run.

Always read the fine print. Make sure you understand all the terms of the loan. Ask questions. If you are saving yourself money and repayment time, then a refinance may be the answer for you.

Julia Peoples

How Much Income Do You Need to Get a Personal Loan

Posted on February 16, 2019 | by Blaine Koehn | Leave a Comment

Applying for a personal loan is easy, but to get an approval is the hard part. There are several factors that determine your ability to get a personal loan; income being one of them. Therefore, the question “How Much Income do you Need to get a Personal Loan” is a relatively important one. Before we answer it, let’s talk about personal uses and the basics.

Some seek a personal loan to consolidate debt or improve their own credit score. It’s all about making available credit more accessible for other parts in your life. When it comes to gaining financial empowerment, one way to achieve this goal is securing a personal loan to improve your own credit situation.

Unlike other forms of financing, unsecured personal loans don’t require collateral to be put up before gaining approval from a lender. It’s important to remember that you will have to pay back the loan at some point. You can make the process go much easier if you plan out a timeframe to pay off the personal loan as this approach avoids any chance of being overwhelmed by the entire process.

How Much Do You Need to Make to Get a Loan

A personal loan is requesting a set amount of money that can range from $1,000-to-$100,000. The lender’s requirements are all based on personal and financial information. One of the main requirements answered by the information submitted is how much income do you need to get a personal loan.

Usually, the minimum salary requirement for how much income do you need to get a personal loan is in the area of $15,000-$20,000 a year for the lowest loan amounts. If you’re asking for a $100,000 loan then your income needs be about 10x the minimum salary. You may get up to $100,00o with high income of at least $150,000 a year.

It is important to note that when it comes to getting a personal loan there is no set income requirement. The above figures are simply average markers. Each lender will have difference requirements. Income also just one factor in the lenders underwriting criteria.

What Is The Minimum Salary to Get a Personal Loan

When you’re applying for a personal loan, the lender must be confident that you have the capability to repay the loan. There is no set dollar amount that can secure a personal loan. Instead, you must at least qualify for the minimum income requirements that do vary with the terms of the personal loan. Again, it will come down to how much income do you need to get a personal loan.

The one plus that is in your favor will be having a good, steady income. But, if you have high debt, you might not be able to meet the monthly payment requirements. You will need to show how much disposable income is available each month as this number will show your money management skills.

Disposable income is the portion of your monthly salary that remains after you pay bills, rent and other living expenses. Many lenders call this dollar figure a borrower’s monthly cash-free flow. Often, they will adjust the final total after taking into consideration the amount of taxes paid and other financial obligations

Do You Need Proof of Income For a Personal Loan

You will need to show proof of income when applying for a personal loan. The standard form of documentation to prove income is showing pay stubs for a period of three months. Lenders use this proof to verify the borrower’s ability to repay back a personal loan. Before personal loan shopping based on your income, it’s smart to research the type of proof of income most lenders are looking for on an application form before approving a personal loan.

The reason to research how to get personal loan online could be if a proof of income verification is missing from the application packet, then your approval for a personal loan could be greatly jeopardized. Plus, research this topic will help answer how much income do you need to get a personal loan.

Why Does a Lender Need This Information?

Showing pay stubs will confirm that you’re a “W2 employee”. Other workers like self-employed or independent contractors will have to show other forms of employment documentation that will confirm their income amount. Lenders will need verification of their current financial state before determining how much income do you need to get a personal loan.

If your occupation on a tax form is self-employed or independent contractor, then you will also need to show proof of income. Usually, a lender will require you to show some form of regular depositing into your bank account as this will confirm that you do have a consistent source of income coming into your home each month. Other financial documents may be required during the review of your personal loan application. This information will help to determine how much income do you need to get a personal loan.

How Much Personal Loan Can I Get on My Salary

When, it comes to obtaining a personal loan, the guidelines on what a person can afford are very clear. It’s important to take a look at your own financial situation as there are questions that must be answered before moving forward. The biggest question is how much income do you need to get a personal loan.

One way to get a better understanding on how much personal loan can a person get on their salary is beginning the application process with a lender. After all, the lender’s main interest is keeping their business doors open. This is only accomplished by limiting the amount of money offered to potential borrowers. They achieve this by offering the right affordable dollar amount to a borrower who then can pay it back over time. Lenders determine how much income do you need to get a personal loan by the information submitted on the loan application. This course of action prevents them from losing money on the loan.

Income Types to Calculate

Most personal loans come with terms of two-to-five years. Most lenders will require you to fill out an application and authorize a credit check. The types of personal loans are either a single or joint. The difference is requiring one signature or multiple signatures on the final documents. The typical underwriting requirements include a minimal credit score between 640-750. It also requires your debt-to-income ratio being no higher than 45 percent.

The debt-to-income ratio will show how much debt you have already accumulated in your lifetime. The percentage number will determine whether you gain approval for the personal loan. In some cases, it will be the deciding factor over your income and credit rating score. Some lenders won’t approve a borrower over the above number (45%) on debt-to-income ratio.

Even, if you have a low percentage number, but have a large amount of credit card debt, you may have trouble getting approval for a person loan despite holding a high-salary job. The main reason is you’re too big a risk defaulting on the loan.

Here are important financial definitions in relation to determining how much income do you need to get a personal loan:

Income Definitions

Term is the length to pay back the loan. Often, when a lender is calculating and determining how much income do you need to get a personal loan, they will ask you how many years you need to repay the loan.
Interest Rate is the percentage of your loan balance that the lender will charge a rate over time.
Gross Income is all money you earn and account for on income taxes for the year. This figure excludes untaxed income like government benefit payments or money you collect from renting property.
Untaxed Income is funds you recieve monthly, but aren't subjected to paying taxes each year. This type of income could include work pension, social security, disability and child support. All fall under the untaxed income umbrella
Rental Income is the amount of money you earn from renting an apartment, home or any other living quarters. Once again, it's the number accumulated before taxes.

Individuals that fall short of the above criteria can still obtain a personal loan. At least, as long as they can afford to make monthly payments to repay the lender back. You may be eligible to borrow an amount of money between $1,000-$5,000. How much income do you need to get a personal loan you will know when you look at the information on the application.

Borrowers will list all income earned as some falls under the heading entitled “reasonable expectation of access”. This terminology has a broad definition. Unfortunately, there is no guideline to calculate irregular income unless a person reports this amount on their tax return. It’s smart to use common sense when reporting income on a personal loan application. This information will help to answer how much income do you need to get a personal loan.

Other Factors Besides Income

Lenders look at factors like your credit score, your debt-to-income ratio (DTI), what you intend to use your funds for, number of other times you’ve looked for credit and sometimes even look into your employer.

The loan can serve in a number of ways. Some borrowers will use the money from a personal loan to get through an emergency situation. Others will pay off outstanding credit balances in order to get their finances in order to make a “big ticket item” purchase in the future.

The basics of a personal loan for a borrower is having a fixed monthly payment plan, a repayment timeline and securing an interest rate that is based on your current employment status and how much money you make in a given year. Besides offering your own credit score, you will need to figure out the exact amount of money needed to borrow, and the length of time you will need to pay back the loan. This information helps the lender determine if you (the borrower) have the capacity to repay a personal loan back.

The lender will want some assurances that you will be able to make the scheduled payment each month and still have the ability to weather other untimely expenses that will add debt to your finances.

What Credit Score Do I Need For a Personal Loan

Credit scores play a major role in what type of personal loan a person can obtain. Most lenders will offer personal loans up to $50,000. Other lenders will offer loans up to $100,000 to those borrowers who have an excellent credit score and hold a high income job. The more positive you can be in your credit history, the more money you will likely get in a personal loan.

714 is the average FICO score in the U.S. in 2021.

An average credit score is between 620-679 and a poor credit score fall under 580. If your credit score is below this range, you can still secure a personal loan. You may have to use your personal (car, home or land) property as collateral to gain a secured loan from a lender. These types of personal loans come with a higher interest rate. It remains all throughout until you pay back the lender in full. Plus, the lender will repossess the property if the borrower defaults on the personal loan.

Using Collateral to get a Personal Loan

Most cases, individuals aren’t required to put down something of value as collateral in an unsecured loan. The lender may place a cap dollar amount on how much a person can borrow based strictly on their yearly salary. If you don’t own property that has some value, then you might want to reconsider your situation and work on rebuilding your credit score.

If you have provided all the information necessary to qualify for a personal loan, then once you’re approved, the money will be deposited into your bank account as fast as one business day. However, this is all based on a lender’s personal loan process.

Blaine Koehn

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Be Comfortable

Final Thoughts

Use Your Personal Loan In The Best Way

Secured and Unsecured Personal Loans

How Much Interest Will I Pay on a Personal Loan for a Major Purchase?

What Determines My Interest Rate?

Factors that Determine Interest Rate

Your Credit Determines Terms for Your Personal Loan

Should I Use My Savings Instead?

Why Not Use Credit Cards?

High Interest-rate

You Shop More Than You Need With The Credit Card

“Zero-interest” Trap

Be Patient and Compare All Loan and Credit Card Options

How About Rent-to-Own Places?

Start Looking For Personal Loan Online With Your Cup of Coffee on the Table

In Conclusion

Personal vs Business Loans: What You Need to Know

What Is A Personal Loan?

What Is a Business Loan?

Are There Specific Uses For a Business Loan?

Can You Use A Personal Loan For Business Purposes?

Positives to Using A Personal Loan Instead of A Business Loan

Negatives Of A Personal Loan Over A Business Loan

Can You Use Both Types of Loans to Start Up a Business?

Personal Loans versus Traditional Business Loans

Does My Credit Matter?

Conclusion

All You Need to Know About Personal Loans with Good Credit and Low Income

Personal Loan Basics

Can I Get a Personal Loan With Low Income and Bad Credit?

How Do I Know If My Credit Is Good?

And What If I Have Low Income?

What is More Important – Credit or Income?

What About the Interest When I Have Good Credit and Low Income?

Are There Different Types of Personal Loans?

Do I Need a Proof of Income?

Conclusion

Are There Personal Loans for Unemployed People?

Alternative Financing Options When You’re Unemployed: Caution!

Co-signer Loans

Credit Card Cash Advance

Home Equity Loans

Car Title Loans

Some Payday Loans

What Steps Do I Take To Get a Personal Loan While Unemployed?

Decide if You Really Need a Loan-Try These Things Instead

Alternate Forms of Income

If You Still Need Emergency Cash Loans for Unemployed Times

Final Thoughts

Refinancing Your Loan From the Same Lender

Should You Refinance a Loan to Payoff the Same Lender?

What Does Refinancing a Personal Loan Mean?

6 Steps to Refinance a Personal Loan From the Same Lender

1. Make Sure Your in Good Financial Shape

2. Compare Personal Loan Options With Your Lender and Others

3. Calculate Refinancing Cost (Beware of Fees other Fine Print)

4. Pre-Qualify and Apply

5. Secure New Funding

6. Use Loan to Payoff Existing Debt

When Should You Refinance a Personal Loan With the Same Lender?

Compare and Shop Personal Loans

Conclusion

How Much Do You Need to Make to Get a Loan

What Is The Minimum Salary to Get a Personal Loan

Do You Need Proof of Income For a Personal Loan

Why Does a Lender Need This Information?

How Much Personal Loan Can I Get on My Salary

Income Types to Calculate

Income Definitions

Other Factors Besides Income

What Credit Score Do I Need For a Personal Loan

Using Collateral to get a Personal Loan

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