The personal loan market has exploded over the last few years. It’s the fastest-growing type of consumer credit in the United States, beating out mortgages, auto loans, and credit cards.
Lenders are more likely to have personal loan programs for people with many types of credit. They’re more willing to offer different types of personal loans, too.
Unfortunately, there are also places that offer personal loans that aren’t honest in their dealings.
How can you find a reputable personal loan lender that you can trust? Read this guide to finding the right place that offers a personal loan.
1. Where to Look for Personal Loans
You can start with an online search, ask people for referrals, or use your existing professional relationships in your community.
You’ll find that there are a few different types of lenders. There is your traditional bank or credit union, which you can turn to first to see what they offer.
Online lending has taken off, and you’ll discover direct online lenders, peer-to-peer lenders, and affiliate lenders.
Direct lenders are like banks, where you deal with the lenders directly. Peer-to-peer lending sites match you with investors who lend money and make money on the interest.
Affiliate sites are sites that compare the rates for different lenders. If you sign up, they make a commission on the sale.
As you look for a personal loan, you can look for one that matches your specific needs. Should you be in the market for a debt consolidation loan, you’ll want to look for the best personal loans for debt consolidation.
2. Consider the Lender’s Reputation
You’ll want to check out the lender’s reputation first and foremost. Be sure to read reviews online and get an idea of the support available.
A lender that has limited ways to reach them or bad customer support should be avoided at all costs. You want to make sure that if you have questions about your loan or any issues during the life of the loan, you can reach someone.
3. Compare Interest Rates
You’ll want to pre-qualify for a loan to get an estimate of the loan terms. You’ll need to submit your information so the lender can do a soft credit pull, which won’t impact your credit score.
This will allow you to evaluate different lenders and the interest rates they offer. This will prevent you from taking out a loan based on the monthly installment payment alone.
You’ll be able to see how much you pay in interest and how much interest you’ll pay over the life of the loan. Obviously, the lower the interest, the better.
4. Look for Hidden Fees
There are lenders that like to tack on “administrative” fees onto your loan. While some fees are to be expected, you don’t want to sign up with a lender that charges an outrageous amount.
Finding the Best Places That Offer Personal Loans
Personal loans are good financial tools because you can do anything with the funds. You can pay off old debts, start a business, or put the funds towards a large purchase.
If you want to be financially sound, you have to find the best places that offer personal loans. Otherwise, you could pay a lot of money in fees and interest.
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