Your OppLoans Road Map to Personal Loans: Getting from A to B (Part 1 of 3)
Just like road trips, people use personal loans to get from point A to point B. Maybe you need financial help for a big move across town. Maybe you need to cover some living expenses between now and your next pay period. Whatever the situation, you need to get somewhere and you need money to help you do it. There are a lot of ways to make this happen, but some routes are safer than others.
Here’s a road map to guide you as you get started:
Step 1: Plan your trip
If you’re heading out on a road trip, there are some basic things you do first: consult a map, make sure your vehicle is ready, and make a sweet playlist. And the same goes for taking out a personal loan. You might not consult a map, but there are definitely some things you’ll want to find out first. What kind of loan is right for me? Are these lenders trustworthy? How can I make sure I’m getting the best offer?
Start with an online search for lenders who service your state. Avoid all payday and title loans and find organizations that are accredited by the Better Business Bureau. Check out their customer reviews on Google and Facebook. Are their ratings high and are their customers happy? If they aren’t, maybe you shouldn’t be giving them your business.
Step 2: Turn right at the Credit Check
Traditional lenders check the credit scores of their customers to determine if they’re trustworthy or not. If you have a low credit score, or no credit history at all, lenders may consider you a risk and decline to offer you a loan. Or, if they do lend to you, they may do so at an astronomically high interest rate which means you’ll be charged more for your loan than someone else would.
If you’re someone with a low credit score, don’t worry, there are lenders out there who don’t perform traditional credit checks on their potential customers. Now, some of these lenders are not to be trusted—we’ll get to them in a second—but many of these lenders are just institutions who understand that people are more than just their credit score. In some cases, they’ll even help you to build your credit.
Think of these lenders like roadside assistance: this is help when you need it.
Step 3: Speed by those predatory lenders
When you’re on a long drive, you don’t stop at every single roadside attraction. (Do you really need to see the “World’s Largest Ball of Yarn”?) Likewise, when shopping for a loan, you shouldn’t stop for everyone who claims they can get “fast cash now!” The lending world is full of predators who shout from the roadsides, rooftops and the internet—especially the internet.
If you watch the news or do your research, you’ll see that payday loans are a dark and dangerous road full of debt traps, rollover, and bad customer experiences. Because payday loan interest rates are so high (as much as 574%) some borrowers end up getting their wages garnished for years in order to pay the loans off. Others face a choice between paying thousands of dollars in interest and getting their cars repossessed.
Don’t be like that van full of kids at the beginning of so many horror movies. Learn the truth about payday loans, cash advances or tax refund anticipation loans and speed past these backroad terrors.
Step 4: Hit the cruise control
Once you select a safe and responsible personal lender, set a payment schedule that will work for you and your budget. Will it be better for you to have a longer lasting loan, paid off over time with smaller increments, or a shorter one with larger payments? It’s your loan, so you should set the term and the payment schedule that’s right for you.
Either way, be sure to set up automatic payments: they’ll be less stressful, help build your credit, and give you some stability. Now that’s cruising.
Step 5: Welcome to your destination
You made it! You got a safe and secure personal loan, not to mention avoided all the potholes and hazards of predatory lenders. Remember, the key to any good road trip and any good personal loan is to plan ahead. Doing your research, avoiding predatory lenders, making sure your payments fit your budget, and setting up automatic payments will ensure that you have a smooth trip. Bon Voyage!