1) Eligibility Requirements
The first criteria we looked at were each lender’s eligibility requirements. Many lenders have mandatory qualifications, like a minimum credit score, a specific debt-to-income ratio, and income requirements. Each lender uses different standards to determine whether you’re eligible to apply and the interest rates you qualify for under company terms.
2) Loan Amounts
We also looked closely at loan amounts when we compared these five companies. Most online lenders have minimum loan amounts of around $500 to $2000, with maximum amounts between $5,000 and $50,000. Of course, the loan amount, terms, and rate also depend on your credit report, overall financial history, and current debt load.
After looking at loan amounts, we considered lending terms. Repayment terms vary greatly based on factors like the type of loan you’re applying for, your credit history, and the specific lender. For example, will you be applying for a secured loan or an unsecured loan? Each type has different terms and rates, even when you are asking for the same loan amount.
Some lenders specialize in short-term loans with quick durations, like two or three years, whereas others offer long-term personal loans, sometimes between five and seven years. Another critical aspect to consider is whether you’ll be subject to prepayment fees for paying off the loan early. Be sure to read through all the fine print carefully before you accept any terms.
4) Interest Rate
Personal loan interest rates determine how much extra money you’ll have to pay back during your repayment period, above and beyond the original principal you borrowed.
Bad credit borrowers often feel they have no choice but to accept the highest interest rate loans (25% and above), which in turn will increase your monthly payments. Unless you have a minimum credit history of Good (720 and above), you’re unlikely to find a personal loan with a single-digit APR.
When you find yourself in an unexpected financial emergency, time is usually of the essence when it comes to raising funds. That’s why we also considered the overall speed and timeliness of https://paydayloansohio.net/cities/zanesville/ approval for the five online lenders we reviewed.
Upgrade has one of the quickest application and loan approval processes of the five lenders. However, you don’t always have to choose a direct lender. Instead, you can opt for an online lending marketplace to pre-qualify and view your available rates without affecting your credit score. While your loan amount and offers will vary from site to site, most lenders provide loan proceeds within one or two business days after approval.
6) Application Process
Online loan applications generally only take a few minutes and require basic information like your name, address, income, etc. We urge you to take the time to read through the fine print before you sign anything.
For example, some companies charge origination fees, which means you’ll have to pay an extra percentage of the loan (usually between 2% and 8%) just to file your application. You es like “administration fees” or “appraisal fees,” but those are just fancy names for the same thing.
You may think it doesn’t seem like much, but even a 4% origination fee can add up to a lot, especially if you’re seeking a large loan amount. For example, on a $10,000 loan with a 4.75% origination fee, you would pay an extra $475!
Unfortunately, this world is full of unscrupulous lenders willing to prey on the most desperate people to get their money, and bad credit personal loans are no exception to the rule. Always research and thoroughly vet your lender before handing over your personal information or banking information. Between identity theft and outright larceny, criminals have plenty of different ways they can use a fraudulent loan scam to steal from you.