Your credit score plays a big factor in getting a personal loan.
When you apply for a loan, you will be required to furnish your credit score. The lender will run a credit bureau report to check your credit history and your credit score.
In general, you should have a credit score of 720 or above to secure a low interest rate. Your lenders will look at your score and determine if you have been paying your bills on time. If you apply for a loan and have a low score, you will most likely be asked to pay a higher interest rate on your loan.
Here is a quick guide to credit scores and what you may need for your loan.
Excellent Credit Score (720 to 850)
If you have an excellent credit score, you will have the ability to secure a loan at a low interest rate. Most lenders will allow you to get a loan at zero percent or at a low interest rate. You may be able to get a loan with a fixed rate or a variable rate.
Good Credit Score (690 to 719)
If you have a good credit score, you will be able to get a loan at a low interest rate. Most lenders will give you the option to get a loan with a fixed rate or a variable rate.
Fair Credit Score (630 to 689)
If you have a fair credit score, you may still be able to get a loan. The loan will come with a slightly higher interest rate than if you had a good or excellent credit score. In most cases, if you have a fair credit score, you will need to demonstrate that you made a serious effort to improve your credit score.
Bad Credit Score (300 to 629)
If you have a bad credit score, it is unlikely that you will get approved for a loan. Bad credit loans are available but with a high interest rate. If you still want to apply for a bad credit loan, you may need a co-signer.
The co-signer is responsible for paying off the loan if you are unable to pay for any reason.
Why a Personal Loan Is Important
A personal loan is important if you want to consolidate debt or if you want to make some home improvements. For example, you can consolidate your credit card payments into a low interest personal loan. The loan term can be as long as ten years.
If you are interested in a personal loan, you will need to have a good credit score. There are many lenders who offer personal loans. You can apply for a loan from a bank or from a credit union.
You may also be able to get a personal loan from a peer-to-peer lender. Peer-to-peer lending is commonly referred to as person-to-person lending. Each state has specific lending rules and regulations. You should do your own research to make sure you are applying for a loan in your state.
Your credit score is one of the biggest factors to consider to successfully get a personal loan. You can do your research online to find the right loan for you. Lastly, make sure you are applying for a loan in your state.
Apply for a personal loan that takes your situation into account. At Hometown Finance, we offer personal loans for bad credit in Murfreesboro, TN. Our loans cover all of the basic needs one might need. Get in touch with us today to learn more.