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Top 4 Factors to Consider When Choosing Personal Loans

by Stacey Santos

Did you know that around 20.2 million Americans currently have a personal loan? If you are trying to find the right personal loan to apply to, we are here to help. There are a few things to take into consideration when you are choosing personal loans.

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Keep reading to learn everything you need to know.

  1. Loan Qualifications

When you start shopping for a personal loan you first want to analyze your financial situation. Collect all of your pay stubs, your bills, and your proof of employment. This will help you analyze what your debt to income ratio is.

You might also want to check from a reputable online lender such as bonsaifinance.com what exactly you will need when it is time to apply. Usually, they will require a picture identification, proof of current address, etc.

Something else that you might want to do to prepare ahead of time is get a free credit score report. Your credit score will let you know if you qualify for the loan that you are looking for. There are some creditors that will require a high score above 740 and others that will allow a score as low as 580.

  1. Fees

You want to make sure that you are aware of any fine print from the loan company. Be careful because sometimes there will be hidden fees tacked on to the loan that you are not aware of.

Some fees that might be tacked on include early repayment fees, service fees, organization fees, and insurance fees. You have the right to ask for a list of fees and also the explanations for each fee the company might have.

  1. Restrictions

You want to make sure that you know if the company will have restrictions on what you can spend your money on. Sometimes companies will only lend money for certain approved items. If you do not want any restrictions you have to look for the right lender that will allow you to use the loan money for whatever you need.

  1. Look for 0% Balance Transfers

For those that have good credit, there are usually a few 0% balance transfer credit card options available to you. While this might not be a personal loan per se it is a great alternative if you have great credit because it will save you a ton of money on interest.

Usually, you can transfer the available balance to your bank account and pay $0 fees and have 0% interest as long as you pay it back within the allotted time frame. Then you can use the money from your bank account as a personal loan for whatever you need.

Feeling Like a Pro About Choosing Personal Loans?

We hope that now that you know the ins and outs of choosing personal loans, you can make an informed decision before you start applying. Make sure to do your research before submitting an application to the first creditor out there.

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