Personal loans are a viable option for those who are looking into undergoing a big personal expense (adoption, home improvement, etc.) or trying to consolidate their debt into one loan.
While they are easier to get than ever before thanks to the internet, the loans are still subject to approval of your application. In order to get low rate personal loans – or at least the lowest rate possible for you – you'll need to follow specific steps to make sure you have the ideal personal loan application.
What You Need for an Ideal Personal Loan Application
The very first thing you need before applying for a personal loan is to check on your credit score. You can get a free report once a year from FreeCreditReport.com or use a credit monitoring service to pull it up for you.
When you pull up your report you'll want to look for credit history, debt usage, your payment history, inquiries and the kinds of loans you have. All of this combined makes your credit score and will give you an idea of what's working and what's not.
Ideally, you'll want to have good credit in order to get low rate personal loans. But even if you don't have wonderful credit, knowing your score will at least let you know what you can and cannot apply for.
Once you know your score you'll need to provide the following:
Identification – Passport, Driver's License, Social Security Card or State ID will do just fine.
Verification of address – Utility bills or copy of your lease.
Proof of past income – W-2 forms, tax returns, bank statements, etc.
These three pieces are paramount to securing your loan which is why it's always important to keep your financial files as organized as possible (or hire an accountant!).
You'll also be asked about your employer, your gross income, your debts, previous addresses, date of birth and your mother's maiden name. In other words, if you want the ideal loan application make sure to have all this information available before starting the application process.
Personal Loans for Fair Credit
If you have fair credit you may have a shot at getting a loan from an institution, but you may not get low rate personal loans and your options may be limited.
The important part in shopping for personal loans is to ask for a list of all the fees aside from just the interest rate. This will allow you to crunch all the necessary numbers to make the best decision for your particular situation.
You can also try credit unions, peer-to-peer lenders or shopping for an online personal loan to widen your pool.
Personal Loans for Bad Credit
If you have bad credit you can try getting a loan from a credit union or a peer-to-peer lender. Credit unions are non-profits so they may be more lenient in giving you a loan.
Peer-to-peer lenders such as Lending Club have also become a very popular option for people with bad credit. These lenders allow you to borrow money from a person instead of an institution, making it much easier for someone with bad credit to get approved for a decent loan.
For more information on where to find personal loans for all kinds of credit check out our reviews.