What is a Personal Loan and How Does it Work
A personal loan is an unsecured loan, paid back in equal monthly payments with a fixed interest rate. Unsecured personal loans don’t require collateral and are generally used to consolidate debts, repay tax debts, cover necessary home repairs, moving expenses, wedding costs, and other large one-time expenses.
The minimum eligibility requirements to be pre-approved for a personal loan are: (1) be a U.S. Citizen or a resident of the U.S. or its territories, (2) be at least 18 years old, (3) have a checking account, (4) have a veritable, steady source of income.
A secured loan requires collateral for approval. This means that the lender will secure an asset (a car, home, etc.) to take in case the borrower defaults on the loan. An unsecured loan doesn’t require collateral.
Generally, an unsecured personal loan is between $5,000 and $15,000. The repayment terms for personal loans are typically up to 60 months.
A loan request may take a few minutes to process once you have submitted your application.
Once you have signed the loan agreement, your funds could be available as soon as the next business day. The actual timeframe may vary depending on the lender’s deposit process.
Depending on several factors, you might be able to get another loan. You’ll have to apply again for another personal loan online.
Personal Loan Application
Applying for a personal loan online is easy. Step 1. Fill out the loan application (selecting a loan amount, and providing basic personal information, along with the required documentation); Step 2. Submit the application and get approved.
There is no cost associated with applying for personal loans online, whether you are approved or not.
You’ll need to submit some documents which help lenders authenticate your identity and determine your financial stability. These documents typically include: (1) a valid form of I.D.; (2) proof of income (bank statements, pay stubs, tax returns); (3) proof of address.
Credit Score and Personal Loan
When you apply for a loan, lenders will begin with a soft pull of your credit score. Soft credit pulls don’t affect your score. Later on, during the loan approval process, lenders may do a hard pull of your credit history for further detail. Hard credit pulls can temporarily lower your credit score by a few points.
Yes, personal loans for bad credit are available from certain lenders at 1FirstCashAdcance.
Personal Loan Repayment
Your lender establishes the payment plan. Generally, they are set up to be on a monthly basis. Your repayment will be accessible through the online system that your lender provides. Additionally, some lenders may accept your payment by phone. Electronic fund transfers are available with all our lenders. You can set up the specific date on which your payment will be withdrawn from your bank account automatically.
If you have insufficient funds to repay your loan, you will be assessed additional fees. Also, missed payments can be reported to the credit agencies, which can negatively impact your credit score.
Some lenders may collect a prepayment penalty fee if you pay back your loan earlier. When you are reviewing the online loan offers from lenders, check to see if they charge prepayment penalties.