How to Get a Personal Unsecured Loan

You don’t always have collateral to offer your lender in exchange for the loan when you need money. When this happens, a personal unsecured loan is often your best bet. Even if you haven’t applied for unsecured credit in the past, this type of loan is well within your reach.

Pull your credit

Reviewing your credit history is the single most important thing you can do when in the market for a personal unsecured loan. Lenders look at the information within this file to determine if they can do business with you. Your credit score itself is important, but pay attention to the details as well. If you find any erroneous information, contact the credit bureau to correct it.

Define your needs

Not every lender is a good fit for your credit needs, especially when you consider how many different kinds of unsecured personal loans exist. A payday loan lender might be a fast option when you only need a small amount of money for a very short term. On the other hand, you cannot get a payday loan for $15,000 with a repayment term of five years. Knowing what you want from your loan will determine who can help.

Research lenders

Getting a personal unsecured loan is a partnership between you and your lender. Check with your state’s Attorney General or the Better Business Bureau to find out if potential lenders have complaints filed against them. Some complaints may not apply, but pay special attention to clients who talk about harassment from the lender when the payment was late. You have an obligation to repay your loan according to the loan’s terms; however, missing a payment does not allow the loan company to disregard state and federal laws pertaining to account collection procedures.

Compare loan factors

While an important factor to consider with any loan, the interest rate is not the only part of the loan you should check. Does the lender charge an application fee? Is there a prepayment penalty? How long is the loan’s term? If these additional factors are equal between lenders, it is then appropriate to let the interest rate guide you.

Submit your application

If possible, apply to only one lender. Multiple inquiries on your credit file can lower your credit score. Protect your rating by limiting the number of applications you submit while shopping rates.

By following these five simple procedures for getting a personal unsecured loan, you can find a loan that meets your needs and avoid buyer’s remorse after you close the deal.

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