If you're considering taking out a personal loan and are trying to decide how much to borrow, here's what you need to know. The results are based on a survey of annual percentage rates offered by lenders in the NerdWallet personal loan market. The better your credit score, the more likely you are to be approved for a loan and the lower your interest rate. However, secured personal loans may also be secured by other valuable assets, such as cash accounts, investment accounts, real estate and collectibles such as coins or precious metals.
Stable employment can go a long way towards improving personal loan eligibility and the amount of money you can borrow. The last thing you or the lenders want is for you to take out a personal loan and not be able to repay it. If a lower-than-average score stands between you and a personal loan, you can repay your debt the old-fashioned way until your score improves enough to qualify. If you do not have an updated personal report, Experian will provide you with a free copy when you submit the requested information.
If you decide to apply for a personal loan, remember to consider as many lenders as you can to find the right loan for you. You must fill in some personal information, such as the amount of the loan you need, your income, address, and other considerations. The maximum amount available for a loan and the maximum amount you can borrow will vary depending on your lender and your financial circumstances. A guarantor can be anyone with good credit, such as a parent, other relative, or trusted friend who is willing to share responsibility for the loan.
Compare various lenders and loan types and check if there is a prequalification option before you apply to avoid an impact on your credit. If you are planning to consolidate your credit card debt, repayment could be a good option, as your loans can only be used for this purpose. For example, one lender might allow you to apply for a personal loan to finance your small business, while another lender might not allow you to use the borrowed funds for business purposes. The lender will let you know if you need documentation from you and how to give it to the right person.