A personal loan is one of the most common types of loans that people get. Usually, people apply for this loan to finance a home, consolidate their debt or start a new business. The best thing about a personal loan is that its interest rate is very low which will help you to pay off your loan easily. Personal loan interest is usually around 10% to 15% while your credit card loan is 17% to 20% depends on your bank.
No matter you are borrowing this personal loan from a bank, a private lender or from online loaning site you will have to go through the same procedure to get a personal loan. Not everyone gets their application approved for the personal loan, so you guys must be a little smarter than others, so your loan application gets approved in the first go.
Reasons behind getting a personal loan
There are many unexpected events that come to life that we don’t have in our plans like financing a home, medical emergency, child marriage or starting a new business. These are some of those things which can happen anytime, and you will need lots of money for them. Even if you must pay for a vacation you will need a personal loan. These temporary shortfalls can be easily overcome by the help of personal loans. Always keep in mind that getting a personal loan is not like just buying vegetables in the market you must follow some easy steps and you will get the personal loan application approved in the first go.
Different type of Personal loans
Before we apply for a loan, we need to know what options we have to apply for. There are two main categories of Personal loan that we must look upon:
- Secured Personal loan
- Unsecured Personal loan
A secured loan is a kind of Personal loan which usually has a very low rate of interest but there is a catch. You must put something as collateral to get this loan and if you won’t be able to pay back the amount of loan the company will be the rightful owner of that collateral.
On the other hand, an Unsecured Personal loan is the one that has a higher interest rate, but you don’t have to put any valuable thing as collateral. This is a riskier chance to take at the lender ends hence the higher interest rate.
Know how much money you need before you apply
This should be the first step to take when applying for a loan. So, before applying for the loan calculate the total amount and then apply for the amount little more than that. For example, if you need a loan of $50,000 than apply for $60,000. It will cover all the extra expenses and you won’t have to apply for another loan to cover up small expenses.
Don’t apply for multiple loans
If you think that sending out an application to every bank will maximize your chances to get your loan approved than you are wrong. Always find the willing lender candidate and then put your application forward. Rejection of too many loan applications will put a negative impact on your credit score (inquiries). So, instead of sending multiple application choose the lender where you think you have maximum chances to get a loan.
Be Honest with a lender
Always put the right information in your application. If you will try to trick bank or online lenders it can bite you back. These companies have many ways to reach out to the truth about their customer and if they find any misleading information in your application, they will reject it.
Don’t apply for a fresh loan without paying off the previous one
Finally, always try to apply for a fresh loan and if you have a previous loan on yourself never apply for a new loan over it. This will put a negative image of you in the head of the lender. If your credit history is the clear lender will also have surety that you will pay off your loan.
If you are a startup business or existing business that would like to refinance debt with a personal loan BitX Funding is there for you!
BitX Funding is the online marketplace for small business owners looking to fund a project. They specialize in connecting small business owners with lenders who will compete for your business. They believe small business owners drive the economy and they are passionate about helping your company reach its full potential.
You can reach loans specialist by toll-free at 1-800-824-2407, or email at email@example.com or applying online here and we can guide you on which loans are the best fit for your business.