There are a number of benefits of personal loans. With this type of loan, you will be borrowing a set amount of money so you know what your monthly payments will so you don’t get hit with any surprises. A lot of personal loans are unsecured. This means you don’t need to have any collateral. When you get a personal loan online, you can have the money you need in as little as a day. You are also able to apply for a loan from the comfort of your home. Personal loans will typically have lower interest rates than most credit cards. If you’re interested in how to find a 6- month personal loan and other details about it, then read on.
Where Can You Get a Small Personal Loan?
A small 6-month personal loan can be something you need from time to time for everyday expenses. Whether it’s for medical debt or to pay for a vacation, there are different avenues for where to get a loan.
From a Bank
Getting a personal loan from a bank will require a decent credit score for approval of the loan. If your credit score is below 550 then you likely won’t qualify for this option.
From a Family Member or Friend
This is a non-traditional option but can work if your credit score isn’t sufficient or you don’t want to have the risk for a hard inquiry. You could have the option of getting a small personal loan from a friend or family member. Before you ask to borrow any money though, keep it professional and offer a written contract. This person should have reliable income and not be experiencing any financial tragedy.
With a Small Cash Loan
If these other two options aren’t available to you then you can also apply for small cash loans online. In order to do this, it helps to use an online lender finder service. This will allow you to search different lenders and determine if you can qualify for a loan. Many times you can pre-qualify for different loan options. Despite your low credit score, you can have the ability to choose your small personal loan options when you find one online.
What Is a 6-Month Personal Loan?
Typically the terms for a personal loan will range from 12 to 60 months. A 6-month personal loan is made for those who don’t have great credit. All you will need to get approved is an active checking account and proof of income or employment. You can then borrow up to $5,000 over a 6-month period. With this type of loan, you pay back the interest and principal in regular installments and they are usually set for once or twice a month. It helps to make sure the payments are affordable and realistic for your situation. Interest rates can be high and falling behind on your payments can have serious consequences.
Reasons to Use a 6-Month Personal Loan
These 6-month personal loans and smaller loan amounts can be used by people who don’t have the best credit and need some help getting over a hump. The reasons these loans work for people with not that great credit scores is because lenders can be more comfortable loaning smaller amounts of money to those with bad credit. These small loan amounts are usually geared toward these people and this is why the interest rates are higher.
Borrowers can use these loans for a number of different reasons that include utility bills and rent expenses, small home or car repairs, computers or other necessary electronic devices, wedding expenses, college expenses, travel, back to school expenses, birthday or Christmas gifts, replacing a home appliance, and to help with a down payment on a car.
How Does a 6-month Personal Loan Work?
A 6-month personal loan or other small loans don’t have a major amount of money. This amount usually can’t be used for something as large as a wedding but it can cover home repairs or unexpected expenses that require cash you may not have. When you get a loan online you can keep your business to yourself and not have to ask friends and family. The steps to get a personal loan are applying online, searching options, getting cash, and then making payments.
Getting a small personal loan online has never been easier. The entire system, from the application to repayment, can be found through a lender’s online portal. Even when you apply online you may still be required to prove your income. There are some information lenders may require. Lenders can require proof of pay stubs to show that you have a regular income and are being paid. Once the income is confirmed there are usually no extra steps and your approval will come quickly.
If you find the first offer won’t work for your needs then there are more options to consider. If you want to repay the loan quicker or push for smaller payments, you can search for this option. You can have the ability to customize the terms with the majority of lenders online.
Once you have been approved and found a loan that works with your terms then you can upload your bank information in order to have cash deposited into your account. Cash can be deposited the next business day, which is much faster than waiting for a check from a lender and then waiting to have it clear.
When it is time to make payments, all you have to do is log back into the lender’s online portal to easily and quickly make a payment. You can even have the payments drafted at your convenience to make sure you are paying back the loan on time. If you want to pay back the loan early, you can log in and choose the pay back the loan in full just as if you were making a regular payment. You may want to check your loan terms for any pre-payment penalties to make sure you won’t be hit with extra fees if you do choose to pay back your loan early.
How Long Does It Take To Get a 6-Month Personal Loan?
The entire process can be quick and easy and can be as fast as 24 hours from the time you apply to the time you get your cash. If you have more time then you can spend more time searching your options. Many pre-approvals for a loan will be valid for about three days. The pre-approval stage only take as long as getting the key information required to the lender to upload. Once you have been pre-approved then it’s up to you to search for options and confirm the loan option you choose. Once you review the loan options then it’s time to continue the application.
Online Loan Companies Usually Work Faster Than Banks
The online application process can take anywhere from fifteen minutes to half an hour, depending on the information that is required. Once the information is gathered then the lender will usually take several minutes in order to determine approval. Once you have been approved then cash should be in your bank account by the next business day, as long as your loan was approved prior to 5 p.m. If the loan is processed after then it could be another business day in order for you to see the funds. However, this is still faster than receiving a check from the bank or a local lender.
How Is a 6-Month Personal Loan Different from Other Short-Term Loan Options?
There are other alternatives to a 6-month personal loan. Payday loans are also short-term loans and are usually for $500 or less. These loans are typically due on your next payday. Auto title loans are also another type of short-term loan. However these loans have higher interest rates and will usually use your car’s title as collateral. You may have to repay the loan back within 30 days, although some lenders do give longer options.
Three-month loans can usually give you up to $5,000 and can be a reasonable option if you can’t qualify for a personal loan. However, it can be hard to find lenders that offer short-term loan amounts. The longer term will make the loan more expensive. Long-term loans can have lower interest rates overall for borrowers that have good credit.
Do You Need Proof of Income for a 6-Month Personal Loan?
A lender, even for a 6-month personal loan, will want to see proof of income before you get approved. For an individual who is regularly employed, this shouldn’t be an issue. However, it can be harder for non-traditional employees. These people may be self-employed and don’t give themselves a paycheck.
In order to show proof of income if you don’t have a regular paycheck, there are some things you can do. There are other means of income that lenders will accept. A W-2 is a tax document that will tell a lender how much money you made in the previous year. Lenders can also accept tax returns if your are self-employed. A signed letter from an employer is another proof of income that lenders can accept. You may also use bank statements, which shows that your employer has made regular deposits in the account.
It can be difficult to get a personal loan without proof of income. There are other ways to get loans that may require some collateral.
Choosing Between Different Loans and Lenders
When searching for a 6-month personal loan, it is important to not rush and choose the first available option. This loan is going to affect your life for some time, even if you do pay it off quickly. There are some things to consider when choosing the right loan.
The Loan Terms
You have to look at the loan terms. Many different factors will vary from loan to loan and you have to be careful to notice these differences. Be sure you know what the interest rate is and how it is calculated. Is it fixed or variable? It is compounded yearly or monthly? It is added to the loan amount? It’s also important to understand if the payment amount due each month is only for interest or if some of it is also applied to the principal.
The repayment terms are also important. How long do you have to repay the loan? And how often do you need to make payments? How does the loan need to be paid? Knowing everything about the loan before accepting it will help make sure you don’t end up in worse financial trouble. If the loan you are approved for requires shorter repayment terms or larger payments than you expect then choose a different one. Don’t get yourself in a deep hole.
Purpose of the Loan
There are different types of personal loans and the loan you choose should be based on the purpose of the loan. If you just need some financial assistance to make a purchase or pay a bill then a loan option that doesn’t require collateral will work. If you are using the loan to build credit then you want to make sure you pick a loan type that will get reported to a credit bureau. Payday loans and title loans don’t get reported unless you fail to repay them. When you consider the purpose of the loan, you can choose the best one for your situation.
If you are choosing between applying for a loan online or at a brick and mortar lender, know there are some differences. Applying online can be much faster than driving around and filling out paperwork over and over again. When you apply online, you can start the application for multiple lenders at once. Some brick and mortar locations will hand out cash while others will give you a check and you need to wait until it clears. Online lenders will deposit loans into your checking account when you are approved.
What Are Some Loan Eligibility Requirements?
Every loan company will have a different set of eligibility requirements. Many lenders look at the debt-to-income ratio, along with if monthly payments are made on time. If you can’t afford monthly payments then you may not get approved. Other lenders will look at career experience, financial history, and education level. Lenders can require the borrower to be 21 years of age and have a steady income. Many lenders want their borrowers to have a steady job with a minimum annual income. There are also credit requirements and many lenders will factor in the credit score.
What Do You Do if You Have Bad Credit?
There are still some ways to get personal loans with poor credit. However, there are some things to keep in mind. You will need to know the distinction between a secured and unsecured loan. Secured loans require collateral to use as backup. Unsecured loans don’t require any collateral so they are riskier for lenders. With poor credit, you may only have the option for a secured loan so you need to know what you are using for any collateral. You should also expect the interest rate to be higher. Extending the length of the loan can be tempting in this case since it will lower the monthly payments but you will end up paying more in interest.
You will also need to prepare more when getting a personal loan with bad credit. You will need to have copies of financial documents, bank statements, employment information, and more. This paperwork will be submitted with your application. If you don’t have a good credit report then you will need to do more work. Don’t be discouraged if you are rejected from one lender as there are more opportunities available. You may be able to ask why the application was rejected so you know if there are ways you can improve.
Conclusion
A 6-month personal loan can help you out if you need cash fast. These loans are a little different than other short-term loan options and can be used for a number of different reasons. You can use a 6-month personal loan to get by on bills or to make sudden home or car repairs. There are different places where you can get these types of loans and each has its own advantages and disadvantages. It helps to know the process of how to get these loans and what to look for when you are choosing between different lenders and different loan options. You will need to show proof of income but even if you have bad credit, there are still options for you to choose from that may have higher fees and interest.
Jackie Strauss is a finance writer with a background in economics living in Los Angeles. She has a passion for helping readers learn more about personal finance, insurance, home loans and paying down debt. As a college student during the Great Recession, she has had to learn budgeting and money saving techniques to become a new homeowner.