When you want to borrow money for a variety of reasons, a personal loan is an option worth considering. It allows you to borrow a specific amount of money with a set interest rate and repayment schedule, and you typically don’t have to put up any collateral. In addition, many lenders don’t require a credit check before disbursing loan funds. But it’s important to compare lenders’ rates, fees and terms before you decide which one is right for your financial situation.
Often, the best personal loans have competitive rates and flexible loan terms. They can be used for a variety of purposes, from paying for a wedding to covering unexpected expenses. But they can also be useful for consumers struggling with high-interest debt, as they allow you to consolidate multiple debts into a single payment at a lower interest rate.
To qualify for a personal loan, you must meet the lender’s minimum income and credit requirements. If you have a low credit score, try disputing errors on your credit reports and taking steps to improve your score before applying for a personal loan. You’ll have a better chance of receiving the best terms and rates on your personal loan if you have an excellent credit score.
The average personal loan has an APR between 6% and 22%, and the typical repayment term is between one and seven years. Some lenders charge fees, such as origination fees or prepayment penalties, which can raise your APR and monthly payments. Others offer unique perks, such as zero-fee loans or autopay discounts.