Personal loans are unsecured loans borrowed to meet immediate needs. As these loans are multi-purpose in their nature, they can be used for many purposes including home renovations, traveling, weddings, etc. Furthermore, there is little restriction on the amount of personal loans and they can help the borrower build his credit easier than with other types of loans.
Personal loans are considered unsecured loans and are sometimes called “signature loans”, as the lenders need the borrower’s signature on the agreement as a guarantee that he will pay the debt back as agreed.
Types of Credit Scores
The credit scores range from 300 to 850. FICO (Fair Isaac Corporation) defines the range from 300 to 579 as “poor”, the range from 580 to 669 is considered “fair”, scores from 670 to 739 are called “good”. Very good scores start from 740 to 799. The score range from 800 to 850 is considered “excellent”.
Personal Loans For Fair and Bad Credit
Not everyone in the US has good credit. Experian, one of the three credit recording bureaus, states that 17% of Americans have a fair credit score. Thus, if you have scores ranging between 580 to 669, you might find it hard to borrow money. Luckily, there exist personal loans that are available for those with fair credit scores.
The internet is filled with numerous opportunities to offer personal loans to fair credit holders. The first thing you need to do is to compare rates and terms at online lenders offering personal loans to borrowers with fair or average credit. Choose one that provides the lowest rate.
What to Do Next
After choosing the best online lender for personal loans, you now should fill out the online application form suggested by the website. The application will require personal information that includes:
- Name, surname
- Date of birth (at least 18 years old)
- Home address (Residency in the US)
- Email address (for notifications about loan procedure)
- Phone number (for more detailed information)
- Social security number and government-issued ID (to apply as a legal citizen of the country)
- Income source (as a recognizance that you will repay the debt)
- Active checking account ( to have money transferred into it)
Submitting the Loan Request for Personal Loans
After having the application completed; you should submit it, and wait for the lenders’ decision. As your claim is being examined by several lenders simultaneously, your chances to get approved are high. As long as you are approved by one of the lenders, your money is directly deposited into your bank account.
A piece of Advice to the Borrowers
Remember, personal loans are unsecured loans and do not require collateral such as your house or car to secure the loan. Instead, you receive the loan based on your financial history, your income, and any other requirements that the lender can have.