Conventional bank loans are often hard to secure with imperfect credit, too little income and other circumstances that are beyond the borrower’s immediate control, but those who choose to work with alternative lenders have the opportunity to take advantage of the loans that they need without the hassles that are associated with traditional lenders. If you lack the time or strong financial history to satisfy the lending requirements at your bank, you may still have options when it comes to getting a personal loan.
How to Find the Best Lender for Your Situation
If you’re like most people, you have a few issues in your past that you would rather not discuss with a potential lender, and many lenders are perfectly fine with that; instead of searching tirelessly for a bank that is willing to accept a couple of mistakes that you made earlier in life, choose to apply for a personal loan from a car title lender, even if you are not planning to use your vehicle as collateral. While your credit will still be a factor for a personal loan from this type of lender, significantly fewer requirements are in place to actually borrow the money.
Most alternative lenders do require a base credit score, however, as well as a pay stub or a bank statement and a piece of identification, like a driver’s license. In the case of those who do not qualify for a loan without collateral, a free and clear car title in your name or evidence of up-to-date car payments may improve your chances; many lenders are committed to doing what it takes to help you acquire the funds that you need. Although various companies offer different loan amounts, many choose to cap borrowers at a maximum of $3,000; additionally, some states and municipalities have lending requirements to which lenders must adhere to remain in compliance with local or statewide laws.
Interest Rates and Payment Plans
Clients who are searching for non-traditional loans will often encounter high interest rates, but that does not mean that you shouldn’t shop around for the best deal on your personal loan; compare several lenders, their repayment process and how much interest you can expect on your loan.
It is also very important to understand the terms of your loan that are described in the contract; not only will it tell you how much interest you will pay over the life of the loan, but it will also describe your repayment schedule and amounts. Every borrower should read and understand the entire contract before entering into the agreement; the loan contract, also referred to as a promissory note, is legally binding once you have signed it with the intent of borrowing and repaying the amount of the loan, plus accrued interest.
Final Considerations on Personal Loans
Everyone occasionally runs into a situation where they have no choice but to borrow money, but it is vital to your financial future to ensure that you can handle the loan obligation, including both interest and fees. While borrowing money is perfectly acceptable and can even improve your credit score if handled responsibly, remember that failing to make payments as required by the contract could impact both your credit rating and ability to borrow money in the future.
