Sometimes, things do not go according to plan; health emergencies, family needs or even regular student loans can put some stress on our finances. This is why we may need good personal loans from time to time.
Getting a suitable personal loan should not be a difficult task. With a good credit score, you can apply for some of the best personal loans around.
In this article, you will learn simple steps to take when applying for the best personal loans with good credit. We will also show you some of the best personal loans to apply for, with credit scores of 600, 550 and 500.
What is a Good Credit Score?
A credit score is a three-digit number that personal loan companies use to determine whether you can pay back your debt in due time. Loan companies calculate your credit score by observing how much money you earn, how much money you have left to spend after taxes, how much debt you owe, how long you take to pay back and for how long you have been in debt. These factors are collectively called your credit history.
Personal loan companies apply each of these factors differently. They are however mostly constant when your creditworthiness is being considered.
If you are thinking of applying for a personal loan, you are probably wondering what credit score is considered good. Credit scores range from 300 to 850. The higher your credit score, the easier it is for loan companies to lend to you.
An excellent credit score would be 800 and above. Borrowers whose credit scores are in this range are considered the lowest risk.
A great credit score would be between 750 to 799. 680 to 749 is considered a good credit score. Lenders would consider borrowers in these two ranges as mid-risk or ‘subprime’ risk. This means they may not get the best loan offers but may be considered for offers. A fair one would range from 580 to 679. Borrowers in this range are considered riskier than mid-risk borrowers.
Any credit score below 580 is considered poor and high risk. Thus, if you are looking at getting a good personal loan, ensure that yours is a good credit score. Below, you will find how to apply for the best personal loans with good credit.
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How to get a personal loan with good credit Score
- Sift through the options.
- Be sure that you qualify.
- Calculate the numbers
- Get all your documents ready
- Apply for the loan
Bonus Point: start paying as soon as you can
1. Sift through the options
There are lots of personal loans with good credit scores out there. You must take care not to jump on just any offer. Look through your options, to be sure that you choose the one that suits you best. Also, be careful with scam offers. They promise ridiculously low-interest rates for ridiculously high amounts. Here are some factors you should consider when checking out loans:
- Origination and Disbursement Fees
Some loan companies ask you to pay an amount at the beginning of the application process. Some others do not. Pick one which works well for you. Just do not consider this point in isolation. Do so alongside other factors as discussed below.
- Interest rates
Personal loan companies have different loan options. Consider each company’s annual percentage rates (APR) to get a good picture of how much you could make from each offer.
- Repayment Terms
The questions you want to ask are: how much time can I take to pay back this loan? What amount can I pay over each time frame? How much would a repayment default cost me?
- Loan Size
Of course, you want a loan that can take care of your needs. Taking more than one loan could be counterproductive in the long run. Stick to one, if you can.
- Funding Time
While some companies pay loans immediately after verification. Some pay 2 to 3 days later. Some take even longer. If you need the loan to attend to an emergency, go for companies that do not take much time to pay. If you however have the luxury of time, this factor may not mean much to you.
2. Be sure that you pre-qualify
Once you like an offer, check to see that you qualify for it. Lenders usually present a minimum credit score for each of their offers. Be sure that your credit score measures up. Look out for minimum income marks. Make sure you already exceed them.
3. Calculate the numbers
This process is crucial although slow and stressful. Regardless, you must go through it, to avoid running into trouble in the long run. Your best bet is to hire a financial expert to do this for you. However, you can calculate the numbers yourself, if you have a fair knowledge of your cash flow and some math.
First, determine how much income you already make or are sure to make (be careful with the prediction). Next, calculate your current and/or probable expenditures. If you are taking the loan to run a small side business, you want to make sure you capture every possible expense the business could incur, from electricity bills (if applicable) to marketing.
Then how much do you have left? The remnant amount – your profit…can it pay up the required interest rate and still leave you with enough to cater to your needs? If the answer to this is no, you probably should be looking at loan offers with higher amounts and lower interest rates.
4. Get all your documents ready
Lenders usually want your bank statement and other documents. Have them handy. Read between the lines of the requirements, so that you know exactly what you need to provide. Here are some other documents your loan company may ask for:
- Two or more personal identification documents.
- Evidence of tax returns
- Evidence of employment and/ or employers information
- Evidence of residence (for example, a mortgage, lease agreement, house insurance and/or property tax receipt
- Previous credit record (for only a few lenders)
5. Apply for the loan
Go ahead and apply. Once again, ensure that you take your time to make your application. Do not rush and do not make your application while distracted. Set out uninterrupted time for your applications so that you can avoid mistakes.
Check out Patricia app and see if it works for you
- Bonus Point: Start paying back as soon as you can
You may be tempted to stall loan repayments until the last minute. This could be due to the weight of responsibilities you may have to undertake. Do not fall for that temptation. You may not recover from it. Start repayment at the earliest possible time. Pay upfront if you can, or if the lender allows it. It makes for better convenience in repayment, even in the face of emergencies.
Some of the best loans with good credit scores are discussed below.
Personal loans with credit score of 600
Here are some personal loan offers that you could explore if you have a credit score of 600.
1. Upstart
Upstart offers loans ranging from $1000 to $50,000. The Annual Payment Rate (APR) ranges from 5.60% to 35.99%.
Requirements:
Borrowers must have a source of income – a full-time job, a regular part-time job, or a job in view within the next 6 months from the time of application. Not strict about their credit score requirement. They display a minimum of 600 on their website. Still, they are usually willing to consider borrowers with credit scores of 550 and above. Upstart’s considerations are job history, educational history and proof of residence. Borrowers should earn a minimum of $12000 per annum. They also consider debt-to-earning ratio, financial bankruptcies and volume of previous credit inquiries.
Use: Student loans, credit card debt consolidation.
Credit Inquiry: Hard pull
Loan Terms: 3 to 5 years
2. LendingPoint
LendingPoint offers loans ranging from $2000 to $36,500 for an Annual Payment Rate range of 7.99% to 35.99%
Requirements: 600 minimum credit score requirement. Borrowers must reside in the 48 eligible U.S states or Washington DC. All states are eligible but Nevada and West Virginia. LendingPoint does not accept co-signers or joint loan applications.
Use: Any legitimate personal use.
Credit Inquiry: hard pull
Loan Terms: 2 to 6 years
3. Happy Money
Provides loans ranging from $5000 to $40,000. The APR range is 7.99% to 27.99%.
Requirements: This loan applies to borrowers in all states except Nevada and Massachusetts. Applicants provide their employment information, housing information and bank statement, among others. Applicants must pay the origination fee. The origination fee varies, depending on the loan amount a potential borrower applies for.
Use: Credit card debt consolidation
Credit Inquiry: Hard pull at full application.
Loan Terms: 2 to 5 years.
4. Lending Club
Provides loans from $1000 to $40,000. The fixed APR range is 8.3% to 36% depending on the loan amount a borrower chooses.
Requirements: Applicants must be U.S citizens and adults who are employed or in business. Must have a government-issued photo ID, utility bills, proof of housing and a statement of financials (most likely a bank statement and recent tax returns). Applicants must have a steady source of income. The higher the loan amount, the higher the predictable income a borrower should have.
Use: Debt consolidation, credit card pay-off, household expenses.
Credit Inquiry: Soft pull at application, hard pull upon approval.
Loan Term: 3 to 5 years
Personal loan with credit score of 500
1. OneMain Financial
Accepts applications from borrowers with a credit score of 500 and below. According to their website, they take applications from borrowers with no credit history. You can get up to $1,500 to $20,000. APR range is 18% to 35.99%
Requirements: A valid government-issued ID, Social security card, proof of residence and proof of income. OneMain loans are not available in Arkansas, Alaska, Connecticut, Massachusetts, Rhode Island, or Vermont.
Use: Debt consolidation, home and personal expenses. Does not apply to post-secondary school educational expenses.
Credit Inquiry: hard inquiry at the approval stage.
Loan Term: 2 to 5 years.
Personal loan with credit score of 550
1. Avant
Applicants must be either U.S citizens or permanent U.S residents. Avant personal loans are from $2000 to $35,000. The fixed APR ranges from 9.95% to 35.99%.
Requirements: A borrower’s minimum monthly income must be up to $1,200. The maximum debt-to-income ratio is 70%. The maximum number of accounts on an applicant’s credit report is 1. Avant loans are available in all states except New York, Nevada, Iowa, Colorado, Hawaii, Vermont and Wolverhampton.
Use: Debt consolidation, bills and emergencies.
Credit Inquiry: soft pull at application, hard pull at approval point.
Loan Term: 2 to 5 years.
2. Opportun
Opportun considers borrowers with credit scores of 550. It offers loans from $300 to $12,000. Maximum APR is 35.99%
Requirements: Opportun requests proof of identity, proof of address, proof of income, proof of recurring monthly expenditure, and borrower’s purpose for the personal loan. Loans are available in all states of the U.S except Washington D.C. Borrowers must have a social security number.
Use: Emergency bills, repairs, fill-in for income gaps.
Credit Inquiry: performs a hard pull.
Loan Term: 2 to 4.5 years
3. NetCredit
Easy 100% application process. Offers loans from $1000 to $10,000. APR is 35% to 155%.
Requirements: Borrowers must be 18 or older in all states. Loans are available in 37 states. Initiation and disbursement fees vary from state to state and by loan amount.
Use: Any legitimate expense.
Credit Inquiry: Performs a hard pull.
Loan Term: 6 months to 5 years.
Conclusion
Whatever need you are trying to meet, a personal loan should go a long way. With the information you now have, you can start applying for your best personal loans of choice right away.
FAQs on personal loans with good credit score
How can I get personal loans with a credit score of 600?
There are a lot of personal loans you can get with a credit score of 600. Some of them are discussed in this article. Just sift through the list, pick your choice, prequalify, get the required documents and apply.
What are the easiest loans to get approved for?
If your credit score is 600 or below, we recommend BestEgg, Upstart, HappyCredit, NetCredit, and Avant. If you have a higher credit score, you can go for Marcus by Goldman Sachs, Discover, or Lightstream.
What type of loan can you get with a 700 credit score?
With a credit score of 700, you will most likely get access to a conventional loan. You can also get a Federal Housing Authority (FHA) loan.
References
- https://forbes.com/advisor – Best Personal Loans
- https://equifax.com/personal/education – What is a good credit score?
- https://bankrate.com – How to Apply for a Personal Loan in 8 Easy Steps
- https://www.nerdwallet.com – 700 Credit Score: Is It Good or Bad? How to Build Higher
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