Life is full of surprises, and some of them require extra cash. You may have the opportunity to move into a bigger and better rental apartment, but need cash for the security deposit. Or your car might break down and need repairs. Or perhaps you need money to help a loved one with a health situation. Whatever the reason, you may need more cash than you’ve been able to save. One of the solutions to cope with these “surprises” is to apply for a personal loan.
Getting a loan is a real responsibility. The debt will need to be repaid. Therefore, be careful in your choice of lender and loan terms.
Most people know to ask about interest rates and APRs (Annual Percentage Rate), but below are three additional questions to ask while looking for the right loan:
1. What are the requirements? Do I need collateral?
Lenders have different requirements around credit scores. Others ask for collateral, like a car, home, or other valuable item that the lender will keep if you cannot repay the loan. Providing collateral for a loan is not necessarily a bad thing if it helps you access the loan you need at more favorable terms, but make sure you understand your choices, and make sure that you’re comfortable with the loan payments.
2. How realistic are the payment terms (loan amount and time)?
Some loans look affordable on paper, but the payment terms are so unrealistic that some fall behind on their payments. They often end up having to pay extra fees, or are forced to take out new loans to pay off the original loan. Read the contract carefully. Will you be able to make the payments when they are due? What are the consequences of being late on a payment?
3. Can this loan help with credit history?
If the lender doesn’t report customer accounts and payment histories to the credit bureaus, the loan will not help you establish the credit history you may need.
After asking yourself these questions, choose a loan company that fits your needs and abilities.
Consider an Oportun loan! We offer affordable and fixed payments that fit most customer budgets. While we will check if you have credit history, we do not require you to have it. Additionally, we report customer accounts to two of the nationwide credit bureaus to help customers establish a credit history.
The information in this site, including any third-party content and opinions, is for educational purposes only and should not be relied on as legal, tax, or financial advice or to indicate the availability or suitability of any Oportun product or service to your unique circumstances. Contact your independent financial advisor for advice on your personal situation.