There may come a time when you realize that a personal loan is the best way to get your hands on the money you need. These unsecured loans can be used for many things, including but not limited to debt consolidation, home improvement projects, and traveling the world.
While applying for and securing a personal loan online is more popular than ever, many people still opt to visit with a loan officer at a local bank. There’s nothing wrong with this, despite the fact that it’s likely to take up more of your time.
Regardless of the manner in which you seek out a personal loan, there are some questions you should ask your loan officer or other lending company representative. Here’s a good place to start:
- What are the eligibility requirements for a personal loan? This is where it all starts. If you don’t qualify for a personal loan, you can turn your attention to another means of securing funds. For example, a credit card may make more sense this time around.
- Does a personal loan require collateral? The majority of personal loan products are unsecured. You are not required to put up collateral in exchange for the money.
- What are the fees associated with a personal loan? This varies from lender to lender, so learn more before making a final decision on which one to borrow from. You don’t want to be responsible for more fees than necessary.
- Are there any restrictions on how I can use a personal loan? Generally speaking, as long as you’re using a personal loan for legal reasons, the bank doesn’t care. However, depending on the lender, they may ask how you plan on using the funds. You can be as general or as specific as you wish.
- What interest rate do I qualify for? This impacts your monthly payment and total out of pocket cost, so be sure to shop around. The lower the rate the better.
- What terms are available? Personal loan terms vary by lender, but most are in the 12 to 84 month range. Shorter terms save you money, but your monthly payment is larger. Compare all your options to ensure that you choose the term that best fits your budget.
If you’re searching for the perfect personal loan product, now is the time to gather a list of questions for your loan officer. Once you clear the air, you’ll feel confident in your ability to choose the right loan at the right time.