A personal loan offers a flexible way to borrow for many different purposes. They typically have fixed or variable interest rates, with repayment terms from just a few months to seven years (though some go even longer). You can get a personal loan through a variety of lenders, including banks, credit unions, online lenders and consumer finance companies. Some lenders also offer specialized personal loans, such as those that are tied to specific products or services.
A variety of factors can impact your eligibility for a personal loan, including your creditworthiness and debt-to-income ratio. Lenders check your credit report to make sure there are no negative items in your history that could raise red flags, such as delinquent payments, collections accounts and bankruptcy. They also look at your income to make sure you can afford to repay the debt you’re taking on.
When you’re ready to apply for a personal loan, it’s important to compare the rates and fees offered by different lenders. This can help ensure you’re borrowing at a competitive rate and that the loan fits within your budget. Some lenders allow you to prequalify for a personal loan, which may require a soft credit inquiry that won’t impact your credit score.
Once you’re approved for a personal loan, the proceeds will be disbursed to your account. The money might arrive in the form of a direct deposit or through a check. Depending on the lender, you might be required to sign an agreement that outlines the terms and conditions of the loan, such as the annual percentage rate, fees and other details.