Personal Loans 101: Can It Help Me During a Crisis?
There's no denying that the global pandemic has left a dent in every person's financial situation. Because many were furloughed or had suffered financial difficulties, government-issued stimulus checks provided some relief during the big hit. Unfortunately, for some people, this may not have been enough. So to deal with this, some have taken out a personal loan.
A personal loan is available in different banks, credit unions, and lenders. Typically, unsecured personal loans come in different amounts, which often start at $1,000, while some lenders fund loans on the same or the next day.
Seeing as dealing with a crisis can be a bit tricky, you're probably wondering if it's a good time to get a personal loan. Without the pandemic and all the uncertainty in the picture, you'll probably only have to worry about the interest rate as a deciding factor. Since lenders are tightening requirements and with income becoming less than ideal, there are many things to consider.
Am I Qualified for an Unsecured Loan?
Because of the global pandemic, some lenders increased their credit score and income requirement, making it difficult for some borrowers to loan money or get a low rate. For this reason, shopping for the best rate for personal loans is even more important.
Credit unions: they can consider your credit history and membership standing on top of your credit score and income. They will often offer loans with flexible terms than online lenders and banks. Also, the maximum allowable annual percentage rate on credit union loans is usually at 18 percent.
Online Lenders: If you have a steady income and good credit, you have better chances of securing a loan from them.
Bank Lenders: Typically, banks have a high credit and income standard for non-customers, but if your bank offers loans, you may have access to lower rates and special deals.
Other Options: Another way to secure a loan is to have a family member or friend co-sign a personal loan with you. This way, you get a higher chance of approval, giving you a lower interest rate.
How Do I Get the Right Personal Loan?
Know How Much It Will Cost: The total cost of a personal loan is shown at an annual percentage rate, including interest and fee of the lender. It is usually paid monthly and in installments, so it's best to see how much you can afford to pay back every month.
Payment Terms: Personal Loan repayment terms often last two to five years long. When you pay for longer periods, you get a higher interest cost.
When You Need the Funds: While some lenders specialize in fast funding if you need to get a loan on the same day or within a few business days, it's worth considering this option.
Features: Some lenders focus on debt consolidation and send funds to creditors, while others offer hardship programs allowing you to defer or move your payment date.
The Bottom Line: Should I Get a Personal Loan?
Getting a personal loan is a good idea under normal circumstances since it can help improve your financial health, and you can commit to its payments without stress. When it comes to a crisis, personal loans can help lift the financial burden and provide you with relief. However, there are many things to consider, so it's best to do your research and connect with the right lenders so you can find a loan that works best for you.
How Can We Help You?
When Ends Don't Meet was formed to help individuals who need financial loans in the Southeast. Our company and partners practice ethical lending practices, personal service, and transparency loans. With that, our partners proudly offer affordable installment loans to help you build good financial health.
If you're looking to get personal loans in Pelham, AL, reach out to us today!