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Personal Loans

Mariner Finance Personal Loan Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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APR

Up to 35.99%

Credit Req.

No minimum credit score

Terms

12 to 60

months

Origination Fee

Not specified

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Mariner Finance personal loan details
 

Fees and penalties

  • Terms: 12 to 60 months
  • APR range: Up to 35.99%
  • Loan amounts: $1,000-$25,000. Loans less than $1,500 or greater than $7,000 must be funded through a branch. Loans between $1,500-$7,000 can be funded online.
  • Time to funding: For loans completed online, funding can be expected within two business days after the verification process. If applying at a branch, you will receive your check after completing the loan documentation step.
  • Hard pull/soft pull: Soft Pull to apply. There will be a hard pull if you decide to fund your loan through Mariner Finance.
  • Origination fee: Not specified
  • Prepayment fee: None
  • Late payment fee: Not specified
  • Other fees: Varies

In addition to accepting cosigners, Mariner Finance accepts applicants who have filed for bankruptcy, subject to certain underwriting requirements. Mariner reports to the three credit bureaus: Experian, TransUnion and Equifax.

Mariner Finance has created an educational online personal finance course, MoneySKILL, alongside the American Financial Services Association (AFSA). While you don’t need to hold a loan with Mariner Finance to take part, the free educational resource features a curriculum that covers everything from budgeting to borrowing to identity theft.

Eligibility requirements

  • Minimum credit score: Not specified
  • Minimum credit history: Not specified
  • Maximum debt-to-income ratio: Not specified

To take out a personal loan with Mariner Finance you need to live in one of the 22 states it operates in: Alabama, Delaware, Florida, Georgia, Indiana, Illinois, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Wisconsin.

Depending on the loan amount you’re requesting, you may need to visit a physical branch to complete the loan. Mariner Finance requires loan applicants to verify their identity, residence and income before funding loans. If you’re self-employed, you can still take out a personal loan, but you’ll need to provide bank statements and your most recent tax return to prove income.

Applying for a personal loan from Mariner Finance

The application process is relatively simple and painless. To begin, visit either Mariner Finance or one of its subsidiaries’ websites. On the top right of the page, you can click the “Check My Offers” button, where you’ll be taken to a page that specifies how large a loan you’d like to take out. Once you’ve specified the loan amount, click “Continue.” If you have any offer code, which Mariner Finance sends out to pre-qualified customers, you’ll click the “I have an offer code” link.

On the next page, you’ll need to provide Mariner Finance with your personal information. You’ll be asked to provide:

  • Name
  • Address
  • Date of birth
  • Email
  • Phone number
  • Citizenship status (U.S. citizen, permanent resident, foreign resident)
  • Social Security number
  • Personal pretaxed annual income
  • Household income (pretax)
  • Employment status
  • Employer phone number
  • How long you’ve worked for your employer
  • Whether you rent, own your home and/or have a mortgage
  • Monthly rent or mortgage payment
  • The loan purpose

Once you fill out the info, create login credentials and sign the disclosures and privacy box, your application will be submitted. You should hear from Mariner Finance within the same business day about the status of your application. When you hear back, if you decide to move forward with the offer, you’ll have to submit certain documents to verify the information you provided in your application. These include:

  • A valid driver’s license or passport
  • Your Social Security card
  • Proof of residence
  • Proof of income
  • A recent tax return or bank statement if you’re self-employed

You may need to go into a physical branch to submit these documents.

Once information is verified, Mariner Finance will conduct a hard pull on your credit before the funding the loan. If approved, your funds will be deposited either into the bank account provided during the application process if applied for online, or via check if your loan was closed at a physical branch. Loans that are completed online typically take two business days before funds are deposited into your account. For loans closed at a physical branch, you’ll receive funds after Mariner Finance has completed the loan document process.

Pros and cons of a Mariner Finance personal loan

Pros:

Cons:

  • No prepayment penalty: Mariner does not charge any prepayment fees for paying off your loan early. It also has a 15-day guarantee that allows you to cancel and return your loan without any charges.
  • Cosigners allowed: Mariner Finance accepts cosigners on the personal loans it funds, which can help you secure a loan or a better rate if your cosigner has better credit than you do. Your cosigner does not have to be family either.
  • Limited accessibility: Mariner Finance operates within 22 states. You can’t get a loan from Mariner Finance if you don’t live in one of those states.
  • May have to visit a branch: Depending on the amount of the personal loan, you may be required to go into a branch to complete the loan application and verification processes.

Who’s the best fit for a Mariner Finance personal loan?

A personal loan from Mariner Finance may be a good fit for you if your credit score is below average and you live in one of the 22 states where Mariner Finance issues loans. And if you value in-person customer service when dealing with financial matters, you may like that Mariner Finance has more than 450 branches. If you live outside of the states listed, you can still shop around to find the lowest rates.

Mariner Finance consumer reviews

Mariner Finance has an A+ rating with the Better Business Bureau. It has 4.8 out of 5 stars on LendingTree (Disclaimer: MagnifyMoney is owned by LendingTree), with 97% of customers recommending it in their review. The company scored 5 out of 5 stars in responsiveness and customer service while scoring 4 out of 5 stars in both interest rates as well as fees and closing costs.

“I was really impressed with how easy the entire process was. The staff was exceptionally friendly on the phone and in person,” wrote Teresa of Raleigh, N.C.. Most additional customer reviews talk about how helpful the staff are and how respectful the company is of you no matter what your financial situation is. Reviewers say the staff are patient and willing to answer all questions as they work to find a financial solution for you.

Mariner Finance FAQ

Mariner Finance offers a wide variety of loans including personal loans, mortgages and auto loans. Under these broad categories are many variations such as reverse mortgages and home refinancing or auto refinancing.

Mariner Finance aims to give you a response within the same business day when you apply for a loan.

Since you will be required to show proof of income you will most likely not be able to secure the loan without having a job.

You can spend your personal loan funds on legal expenses of your choosing.This could be for vacations, debt consolidation or home improvement.

Since Mariner Finance reports to the three major credit agencies, Experian. Equifax and Transunion, if you stop making payments on your loan this could impact your credit. If you can’t pay your bill, get in touch with Mariner Finance as soon as possible to discuss options that might work for you.

If you don’t qualify for a loan from Mariner Financial, start by asking your loan officer why you were rejected. Then, you can work to improve your eligibility and try again in the future.

Since Mariner Financial reports to the three main credit reporting agencies, positive payments will reflect well on your credit score and you could see your numbers improve over several months.

Alternative personal loan options

Marcus by Goldman Sachs®

Marcus by Goldman Sachs®
APR

6.99%
To
19.99%

Credit Req.

Not specified

Terms

36 to 72

months

Origination Fee

No origination fee

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure

Marcus by Goldman Sachs® offers personal loans for up to $40,000 for debt consolidation and credit consolidation. ... Read More


Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans).Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions. For New York residents, rates range from 6.99% to 24.99% APR.

Marcus by Goldman Sachs® advertises absolutely no fees on personal loans. It funds personal loans up to $40,000, with terms ranging from 36 to 72 months and APRs ranging from 6.99%–19.99%. Personal loans are available to anyone older than 18 who has a U.S. bank account and a Social Security number or taxpayer identification number, with a few exceptions: the minimum age is 19 in Alabama and Nebraska, 21 in Mississippi and Puerto Rico.

SoFi

SoFi
APR

5.99%
To
19.96%*

Credit Req.

680

Minimum Credit Score

Terms

24 to 84

months

Origination Fee

No origination fee

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on LendingTree’s secure website

Advertiser Disclosure

SoFi offers some of the best rates and terms on the market. ... Read More


Fixed rates from 5.99% APR to 19.96% APR (with AutoPay). SoFi rate ranges are current as of May 14, 2020 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

SoFi offers personal loans ranging from $5,000–$100,000 and terms between 24 to 84 months. Its personal loans have no fees and come with unemployment protection, which can help defer payments in case you lose your job while paying off your loan. Anyone who lives within the U.S. and in a state where SoFi is authorized to lend is eligible for a personal loan from Sofi.

LightStream

APR

4.99%
To
19.99%*

with AutoPay

Credit Req.

Not specified

Terms

24 to 144*

months

Origination Fee

No origination fee

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure

LightStream is the online lending division of SunTrust Bank.... Read More


*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 3.49% APR with a term of 3 years would result in 36 monthly payments of $292.98.

The SunTrust Bank-owned lender LightStream offers personal loans ranging from $5,000–$100,000, with loan terms anywhere from 24 to 144 months (2-12 years). Its personal loans come with no fees or prepayment penalties; however there is a hard pull on your credit.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Personal Loans

What Are Medical Loans and Where Can You Find Them?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Reviewed By

Medical loans are a type of personal loan used to pay for medical expenses. You’ll likely find them through online lenders, although some banks and credit unions offer personal loans that can be used to cover medical costs.

Loans for medical bills can help you pay for both planned and unexpected health care expenses, such as a scheduled surgery, ER visit or an ongoing prescription cost. They may also be able to help you consolidate medical debt into a more affordable package or pay for charges your insurer doesn’t cover, such as dental or vision services.

Despite these advantages, medical loans can be one of the more expensive ways to pay for medical needs, especially if your credit isn’t good enough to qualify for some of the best loan terms available to you. Before taking out a loan, research all your options and compare costs using our guide below.

What are medical loans?

Medical loans come as unsecured personal loans. That means they don’t require any kind of collateral, such as a house or car, in case you default on paying the loan back.

Lenders have different requirements for medical loans. In most cases, though, you’ll be able to use a loan for standard medical services and equipment, such as surgery, emergency care visits, drugs, physical therapy and long-term rehabilitation. Your loan may also help you cover less common costs, such as those for orthodontics, cosmetic surgery, dialysis and fertility treatments. Often, you can get a medical loan quickly, sometimes the same day you apply.

When you take out a loan for medical expenses, you’re given a lump sum of money that’s then repaid in fixed monthly payments plus interest. To determine your interest rate, lenders usually look at factors such as your financial history, credit score, employment status and monthly expenses compared to income.

Is a medical loan necessary?

Taking care of medical debt is important: If not addressed quickly, it can deeply damage your credit profile.

Still, before taking out a medical loan, review your medical bill for possible errors. Also,

speak with your medical provider about payment options. Some providers, like hospitals, may be able to offer you a payment plan, direct financial assistance or a discount that can be more affordable than paying interest, possibly for years, on a health care loan.

If you don’t have health insurance, you might be able to qualify for government and community programs that can help cover the cost of a necessary medical procedure. On the other hand, if the procedure isn’t urgent, consider delaying it until you’ve saved enough money.

10 reasons a medical loan may be worthwhile

  1. Emergency medical expenses
  2. Medical debt consolidation
  3. Dental work or orthodontics
  4. IVF or fertility treatments
  5. Cosmetic surgery
  6. Weight loss surgery
  7. LASIK surgery or other vision procedures
  8. Hair loss or hair replacement
  9. Chiropractic services
  10. Prescription costs
Medical loans: pros and cons

Pros:

Cons:

  • Access procedures you can’t pay for upfront
  • Consolidate medical debt to make your payments more manageable
  • Refinance medical debt to a lower interest rate
  • Build credit with on-time payments
  • Costly interest and fees
  • Good credit may be needed to qualify
  • Potential to end up in too much debt

What should I consider when comparing medical loans?

  • APR (annual percentage rate): Usually the lower the APR, the more affordable the loan.
  • Fixed vs. variable interest: A fixed rate will stay the same throughout the life of the loan, while a variable rate may change.
  • Loan terms: Longer terms mean smaller monthly payments but perhaps more interest in the end.
  • Eligibility: Your lender may not require a specific credit score but will still consider factors such as credit history, income and how well you pay back other types of debt, such as a credit card or mortgage.
  • Origination fees: You may be charged a loan origination fee equal to 1% to 8% of your overall loan amount. The fee will be deducted from your balance upfront, making the loan more expensive.
  • Loan amounts: Don’t borrow more than you need, but also make sure the lender will loan you enough money to cover your medical expense. Loan minimums may vary by state.
  • Time to funding: Check to see how long it will take to receive your funds and whether the process can be completed online, especially if you need money quickly.

6 medical loan lenders

LenderAPR rangeLoan amount
EarnestAs low as 4.99%$1,000 to $100,000
LightStream5.95% to 20.49%$5,000 to $100,000
OneMain Financial18.00% to 35.99%$1,500 to $20,000
Rocket Loans7.16% to 29.99%$2,000 to $45,000
SoFi5.99% to 19.96%$5,000 to $100,000
Upstart7.00% - 35.99%$5,000 to $30,000

Can you find a medical loan if you have bad credit?

It’s possible to find a medical loan if your credit score is not ideal. In fact, you might be able to qualify with some of the lenders mentioned above.

Here’s why: Rather than focusing just on credit scores, some lenders look at a range of information, such as your income and overall borrowing behavior. For example, Upstart will consider applicants who have a FICO® or Vanguard score as low as 620; however, it will also check to see how much debt you carry relative to income and whether you have any accounts overdue.

In general, if your credit is less than ideal, expect higher interest rates and smaller loan amounts.

3 medical loan alternatives

Payment plan

Most medical providers will work with you to set up a payment plan if you can’t pay your bill upfront. Hospital payment plans are often interest-free, and those that do charge interest may still be more affordable than a medical loan. These plans may not even involve a credit check.

Often, hospitals also offer financial assistance programs that can be used together with a payment plan. These programs provide discounts on medically necessary services for low-income and uninsured patients, which, in turn, can make the payment plan more affordable. The discounts depend on both household size and family income and are based on federal poverty guidelines.

Still, hospital payment plans have one big drawback: Because they are either low-interest or interest-free, they require a faster payback time. Medical loans usually come with loan terms of anywhere from two to seven years, but many hospital payment plans need to be paid off in one to two years. Of course, this can be an advantage if you’re trying to pay off your debt quickly and avoid interest fees, but it means you’ll see higher monthly payments.

Medical credit card

A medical credit card is a credit card for paying medical bills, and you may find them offered by your medical care provider or an independent company. You may be able to use the card to pay off medical bills over a period of years at a more attractive and often fixed rate. In some cases, the card may also come with a 0% APR promotion that lasts longer than for a regular credit card, say 24 months versus the 6 to 18 months now common.

CareCredit is a widely accepted health care credit card. It currently has no annual fee and offers promotional financing to applicants who’ve been approved for credit. You can use the card to pay for medical expenses, say, an emergency hospital visit or monthly prescription charge, as they arise. You can also use it online to access tools for finding doctors and service providers, such as medical specialists, primary care physicians and pharmacies.

Still, accessing a medical credit card that’s both flexible and convenient might not be your most affordable option for tracking medical bills. The CareCredit Card, for example, has a standard cardholder APR of 26.99% variable. That’s high compared to rates charged by some of the medical loans mentioned above.

Introductory 0% APR credit cards

An introductory 0% interest credit card may also help you pay off medical bills interest-free and sometimes over a period of a year or more. With a card like this, you won’t incur any interest charges as long as you pay off your balance before the intro period ends.

Pay attention to the terms of the introductory offer if you’re using a credit card for medical expenses. You’ll want a card with a 0% intro APR on new purchases if you have an upcoming medical expense, while a credit card with a 0% intro APR on balance transfers can help you pay off existing debt. The longer the introductory period, the better.

You’ll need good credit to qualify for an intro 0% APR credit card, and even if you do qualify, you might not be offered a high enough credit limit to cover the cost of your medical expense. If you have good credit, though, it’s worth a try, as these offers can save you money in interest. Some also come with sign-up bonuses or credit rewards that might add up quickly with a large medical charge.

FAQ: medical loans

You’ll have the best chance of qualifying for a medical loan if you have good or excellent credit, which is a FICO score of 670 or above. However, many online lenders accept personal loan applicants with credit scores in the low 600s, and a few even accept applicants with scores in the 500s.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Personal Loans

The Ultimate Guide to Personal Loans

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Reviewed By

Personal loans are a versatile form of credit. You can use them to consolidate other high-interest debts, pay for home improvements and more. Because they usually come with fixed interest rates and repayment schedules, you know exactly how much you need to pay each month and when your debt will be paid in full.

Still, taking on any type of debt is a serious responsibility. This personal loan guide will help you learn more about how personal loans work, which pitfalls to avoid and some alternatives to consider.

Part I: Personal Loans 101

How do personal loans work?

When you apply for a personal loan, you borrow a specific amount of money — most often at a fixed interest rate — for a set amount of time. Then you pay off your balance monthly until it’s paid in full.

The terms of your personal loan will depend on your unique financial situation and your lender. The loans are typically offered in amounts ranging from $1,000 to $50,000, and potentially even higher, depending on the lender. As for the repayment period, the loans’ terms often range from one to five years, but can potentially go up to 15 years for purposes such as home improvement.

Personal loans are unsecured debt, meaning they’re not secured by an underlying investment like a home or a car. For that reason, they usually come with higher interest rates than you might get with a mortgage or auto loan.

To get a real sense of how much a personal loan will cost you, keep an eye on the annual percentage rate, or APR. It includes interest and other costs, which could include an origination fee. An origination fee is a loan processing fee that can typically be 1% to 8% of the loan amount; however, some lenders, such as Lightstream and Discover, don’t charge any origination fees at all.

Pros and cons of personal loans

Pros

  • Interest rates can be lower than credit cards. While interest rates on personal loan offers have risen lately, they can still be a good option for consolidating high-interest credit card debt, especially if your credit is top-notch. The average APR on a personal loan offer from a lender is now 11.81% for borrowers with excellent credit, and 15.61% for those with very good credit, according to recent data from parent site LendingTree; in contrast, companion site CompareCards lists the average APR on all credit accounts is 15.09%.
  • Quick access to funds. Depending on your lender, you may receive funding for a personal loan in just a day or two.
  • Predictable payments and interest. Because personal loans generally come with fixed rates and payment terms, you may not have to worry about your interest rate or monthly payment going up. That makes it easier to budget.

Cons

  • Could lead to overspending. Personal loans can be used for almost any purpose, which could lead you to borrow more than you can afford to repay each month.
  • Higher interest rates than some loan products. For example, if you have equity in your home and good credit, you may be able to get a better rate with a home equity loan or line of credit.
  • Damage to your credit if you don’t pay. Some lenders offer options for borrowers facing financial difficulties, and may work with you if you lose your job or face other financial troubles. However, your credit might be damaged if you ultimately can’t make your payments.

What you may need to qualify for a personal loan

  • Good or excellent credit. If your credit score is 640 or lower, it will likely be more difficult to get approval for a personal loan (although some personal loan companies might still work with you). By contrast, having good credit (a FICO score of at least 670) will give you more borrowing options, and a score of 740 will let you qualify for loans with the best interest rates and terms.
  • Low debt-to-income ratio. Lenders might be hesitant to lend money if your debt-to-income ratio is too high. This ratio is determined by taking your total monthly recurring debt and dividing it by your gross monthly income. For personal loans, lenders usually like to see a DTI ratio of 36% or less. Still, even with a high DTI, you may qualify for a personal loan if your credit score meets a lender’s criteria, and you have both a solid income and credit repayment history.
  • Cosigner or collateral. If you have a bad credit score, you may need a cosigner with good credit or collateral to help you qualify for a personal loan.

How to pick the best personal loan

Here are tips that can help you identify a personal loan that’s right for you:

  • Shop around with different lenders. Gather information on personal loans to compare interest rates and loan terms from various lenders.
  • Read the fine print. Make sure you understand your contract, your monthly payment and all terms and potential fees.
  • Read reviews. Reading reviews of top personal loan companies can help you gauge the quality of each lender and what your experience might be like.

Part II: Common Uses for a Personal Loan

You might be surprised to know just how many uses personal loans can have. According to an April 2020 report from LendingTree, some of the top reasons applicants seek personal loans include:

  • Credit card refinance: 32.0%
  • Debt consolidation: 31.0%
  • Home improvement: 8.5%
  • Major purchases: 5.0%
  • Car financing: 4.3%
  • Business: 1.8%

These numbers don’t mean personal loans are the right choice in every borrowing situation. Here’s some more information about potential uses, along with some pros and cons:

Common uses for personal loans

Debt consolidation

If you’re struggling to pay back several types of debt, a personal loan may let you streamline payments and pay less interest overall. One caveat: if you can qualify for one, a 0% balance transfer credit card could be a less expensive option for combining debt.

Credit card refinance

Personal loans often have lower interest rates than credit cards — just make sure you’ll actually save money after taking into account a loan’s interest rate, origination fee and repayment term.

Home improvement

If you don’t have enough equity in your home to qualify for a home equity loan or line of credit, a personal loan can help finance home improvements. It may, however, come with a higher interest rate.

Major purchase

A personal loan might cost less in interest than a credit card for that big buy of yours. Still, before taking on new debt, consider whether you really need that purchase now — or whether it would be cheaper to save up and pay cash.

Car financing

A personal loan could be an option for buying a car, but it might be easier to qualify for an auto loan, as well as pay less interest and fewer fees (a car loan uses the vehicle as collateral).

Small business financing

If you’re starting a business and aren’t yet earning money, it may be tough to qualify for a business loan. A personal loan can help get your business off the ground. One potential red flag: If your business goes under, you’ll still have to pay back the loan or risk damaging your credit.

Medical expenses

Taking out a personal loan to pay for medical expenses can keep medical bills from going to a collection agency. However, first see if your medical provider provides payment help, as many do. They may be willing to work with you to pay off your balance — and not charge interest.

Part III: Personal Loan Traps and Scams to Avoid

Here are some personal loan traps you should consider:

Advance loan fees

Occasionally, a fraudulent loan company will offer outrageous loans and loan terms with a catch: You must pay upfront fees or “insurance” to qualify.

Look out for lenders who ask you to wire funds via Western Union or MoneyGram — reputable lenders won’t ask you to pay money upfront.

‘No credit check’ loans

According to the Federal Trade Commission (FTC), a lender who isn’t interested in checking your credit is a red flag.

Steer clear of ads and websites that promise “Bad credit? No problem” or “We don’t care about your past,” the FTC cautions. These slogans usually signal a scam.

Precomputed interest

Some personal loans might come with precomputed interest, which means they use the original payment schedule to calculate interest, even if you make payments early. This forces you to pay more interest over time, even if you make larger payments or try to pay off your loan early.

Prepayment penalties

Some personal loans tack on a prepayment penalty if you pay your loan off early. And while prepayment penalties aren’t that common, they are unnecessary. Be sure to read through your loan terms to check for a prepayment penalty before you sign the agreement. If you find one, consider opting for another lender.

Part IV: Alternatives to a Personal Loan

Personal loans vs. credit cards

Credit cards can be a great deal if you pay them off monthly, as you have the potential to earn rewards.

Personal loans vs. HELOCs

A home equity line of credit (HELOC) is a revolving line of credit secured by your home. HELOCs often have lower interest rates than personal loans, and you may be able to deduct the interest if you itemize your taxes. By contrast, interest paid on your personal loan is not tax-deductible.

Personal loans vs. cash-out refinance

A cash-out refinance lets you take out a new mortgage that’s more than what you now owe, and pocket a portion of the loan as cash. It usually comes with a lower interest rate than a personal loan, but with longer terms, so you could end up paying more overall. If you’re opting for a cash-out refinance, check this calculator to determine how much you might be able to borrow, and what your new monthly mortgage payment will be.

Unsecured personal loans vs. secured personal loans

A secured personal loan requires borrowers to use an asset, like a vehicle or certificate of deposit (CD), as collateral. A lender can repossess the asset if the borrower fails to make payments, so interest rates on secured personal loans tend to be lower than those on unsecured loans.

FAQ: Personal loans

The amount you can borrow varies by lender, but generally ranges from $1,000 to $50,000.

Yes, if you use it to consolidate high-interest debts from credit cards or other loans. To get out of debt faster, make sure your new personal loan comes with a lower interest rate than you’re already paying, along with few or no fees.

Your interest rate depends on the type of loan you apply for, how much you want to borrow and the quality of your credit. While each lender is different — for example, some will work with you if your credit isn’t ideal — a FICO score of at least 670 will give you more options.

If you were denied a personal loan due to poor credit, the best thing you can do is work on improving your credit rating. Pay bills on time, pay off debt to reduce the amount of available credit you’re using and avoid opening or closing too many accounts.

Thanks to the internet, you can apply for a personal loan online and from the comfort of your home. You can also compare fees and interest rates from top personal loan companies by visiting this page.

If you apply for a personal loan, a hard inquiry will be placed on your credit report, but any negative hit your score takes will be short-lived. Your credit score will more likely take a larger hit if you borrow too much and can’t repay. On the other hand, repaying your personal loan on time, and ultimately in full, might actually help your score in the long run.

If you’re cash-strapped, this may sound tempting, but most mortgage lenders discourage it. Before approving you for a mortgage, lenders will look at your debt-to-income ratio, so taking on a personal loan to afford a down payment might actually disqualify you in the end.

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