Enormous and unexpected expenses can come up at any time, and you may find yourself considering applying for a personal loan. While a personal loan can bring some much-needed relief, it can also become a very stressful part of your life. To ensure that you do not default on your loan in the future and face legal action from the lender, you need to be prepared for it.
Before you even fill out a personal loan application in Fort Lauderdale, knowing what to expect can help relieve some of your stress. Additionally, it is also important to know some tips that can help with your chances of having your application approved.
Decide How Much to Ask For
Before doing anything else, you must determine how much you are going to ask for. The way to do this is by first deciding how much you can afford to repay every month. Then, choose a number that is slightly less than the number you come up with, which will leave some room in your budget.
It is important to be realistic when coming up with the amount you are going to ask for. If you request too small of an amount, you will not be able to fully cover your expenses. If you request an amount that is too high, you will pay much more in interest and run the risk of not being able to pay it back. Calculate your debt carefully and make sure you are prepared to pay it back without getting in over your head.
Determine the Type of Loan Right for You
You have many options when it comes to personal loans. The most common types are unsecured and secured personal loans, medical loans, and debt consolidation loans.
An unsecured personal loan is one that can be used for whatever expense necessary and that does not involve collateral. Secured loans can also be used for any purpose, but the borrower puts up collateral in the event that they do not repay the loan.
Debt consolidation loans and medical loans are loans that are provided for specific purposes. A debt consolidation loan allows the borrower to repay other debts, while medical loans are specifically used for medical and dental procedures. It is always important to ask lenders what types of personal loans they offer.
Choose a Lender
You should compare several different lenders, and the personal loan packages they offer, before making your final decision. While you are comparing their interest rates, fees, and other terms, you should also determine what other qualities are most important to you. If customer service is important, you may want to apply for a personal loan with a bank or credit union. However, doing so can take a bit longer. On the other hand, if you apply for a personal loan online, the process is much quicker. Determine what your priorities are in a lender, and go from there.
Check Your Credit Score
Before applying for a personal loan, it is important to check your credit score with a reporting bureau such as TransUnion or Equifax. Any lender you apply for a personal loan with will check it, and it is important that you know your score before they do. There are many different systems used to calculate credit scores, but FICO is the most commonly used.
Your credit score will fall into one of the following four categories under FICO:
- A credit score under 579 is considered poor
- A credit score between 580 and 699 is considered fair
- A credit score between 670 and 739 is good
- A credit score above 740 is considered excellent
Before approving you for an unsecured personal loan in Fort Lauderdale, most lenders will check to confirm that you have a good credit score and at least one year of credit history.
Check Eligibility Requirements
While you are comparing lenders and different loan packages, you should also compare eligibility requirements. Lenders will generally determine if you are eligible for a loan by looking at:
- Your credit history
- Your credit rating
- Your annual income
- Your debt-to-income ratio
Read the Fine Print
Before completing any personal loan application, you should always read the fine print. A personal loan is a contract and you will be legally bound to the terms, so you must know what you are getting into before signing on the dotted line. Also, if you do not read the fine print, you may not know about certain terms, such as late fees, until it is too late.
Collect Your Documents
The process of filling out a personal loan application will go much more smoothly if you already have the required documents ready. Already having the necessary documents gathered will also help you get approved faster. You should always ask the lender what documents you need before filling out an application but generally speaking, you should have:
- Government-issued identification
- Social security number
- Employer’s contact information
- Proof of employment
- Bank statements
Get Pre-Approved, if Possible
Many personal lenders pre-approve borrowers before the loan is official, and this can be very helpful. Pre-approvals can give you an idea about what to expect with the loans, including potentially the interest rate attached to them. This makes it easier to compare the different loans side by side before determining which one is right for you.
A pre-approval will also help protect your credit score. Lenders do not perform a hard credit pull when drafting pre-approvals and so, it does not affect your credit score. However, lenders will do a hard credit search before finalizing the terms, so it is important to remember that pre-approvals are not final and the hard credit search may affect the terms.
Our Debt Defense Lawyers in Fort Lauderdale Can Help if You Fall Behind on Payments
Personal loans are a great way to deal with unexpected expenses, but they can also cause people a great deal of stress when they fall behind on payments. If a lender or debt collection company has threatened to take legal action against you, our Fort Lauderdale debt defense lawyer at Loan Lawyers can provide the sound legal advice you need. Call us today at (954) 523-4357 or contact us online to schedule a free consultation and to learn about the defense we can provide.
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Loan Lawyers is made up of experienced consumer rights attorneys who use every available resource to develop comprehensive debt solution strategies. Our goal is to take on those burdens, resolve those problems, and allow our clients to sleep soundly knowing they are on the path to a better future.
