Unsecured loan Company

You can get these loans, typically unsecured, in amounts ranging from $500 to more than $50, 000. And with a good credit score, you’ll likely be able to snag the most affordable interest rates, too.

Your options shrink and your payments rise if you have no credit history or bad credit, but you’ll find some lenders are willing.

Here are some things to consider while searching for a personal loan:

With unsecured personal loans, credit is key

The interest rates on personal loans are typically higher than rates on secured loans, or loans backed by property. Because these rates depend on your creditworthiness, having a good credit score can also make it easier to find a low APR.

Credit unions, which are not-for-profit, tend to offer the lowest rates for personal loans. They may also be willing to help you out if you have a less-than-perfect credit. They are your best shot if you are looking for a small loan — say, of $2, 500 or less.

Peer-to-peer lenders such as Lending Club, SoFi and Prosper, which offer investor-funded loans to consumers with good credit, sometimes offer even lower rates than some credit unions to borrowers with excellent credit. If that’s you, compare rates you find online with those from your bank or credit union.

Borrowers with average credit will find plenty of options, along with higher rates. Some lenders will consider additional factors such as your job history or earnings potential in making their underwriting decisions.

With poor credit, you may have an easier time finding a personal loan if you have a cosigner or own property you can use as collateral. If you do find a cosigner, keep in mind that he or she will be on the hook for your missed payments. Do your best to honor your agreement and protect both your credit scores. Rates on these loans from alternative lenders will be considerably higher, as much as 36% APR if your credit is at the bottom of their underwriting guidelines.

What you need to apply for a personal loan

To apply for a personal loan, here are the documents you’ll typically need to provide:

• Identification – passport, driver’s license, state ID or Social Security card
• Verification of address – utility bills, recent mail or copy of lease
• Proof of past income – W-2 forms, pay stubs, bank statements or tax returns

You’ll also be asked for this information:

• Employer’s name, work address and phone number
• Gross income
• Monthly debt obligations (rent, student loans, etc.)
• Address, email, phone number
• Previous addresses
• Social Security number
• Date of birth
• Mother’s maiden name

After providing this information, you’ll need to specify the amount of money you want to borrow and how much time you need to repay it. Keep in mind that the longer you pay back your loan, the more you’ll have to shell out for interest payments. If you borrow only what you need, you can keep your costs low.

How to find the lowest rates on personal loans

Here’s what you should do before agreeing to a deal:

See if you qualify for a 0% credit card. If you have good credit, you can probably get a credit card that has 0% interest on purchases for a year or longer, and that may be less expensive than taking out a personal loan.

Consider a secured loan instead. If you have a house, consider using it as collateral in order to get lower rates. A home equity loan or home equity line of credit can often be cheaper than an unsecured personal loan. Keep in mind that using your home as collateral means that if you default, you could lose your home.

Pay off as much of your credit card balance as you can before you apply. The outstanding balance on your credit card — even if you pay it off at the end of the month and never pay interest — counts against you when a lender runs a credit check.

Shop around. Your local bank or credit union may have great rates, especially if you have a long relationship. But online lenders are offering very competitive rates, especially for borrowers without top-notch credit. (See “Where to Get a Personal Loan.”)

What to watch out for with personal loans

If you ignore the fine print in your personal loan agreement, you could find out the hard way that you agreed to less-than-desirable terms. Look for these gotchas before signing your contract:

Prepayment penalties. When a lender tries to estimate how much money it will make off your loan, it usually assumes that you’ll pay interest until a certain date. Paying off the loan too soon — and limiting the interest you pay on a loan — messes up those calculations. Some charge a fee for paying off the loan before a certain date, called prepayment penalties or exit fees. Be sure to look for the words “no prepayment penalty” on your loan terms when you apply.

Accidental overdrafts. If you link your loan to your checking account for automatic payments, you might be in danger of overdrawing your account and paying an overdraft fee — usually, about $35. To avoid accidentally draining your bank account, consider opting out of automatic payments or setting up a low balance alert with your bank.

Scam artists. Before you sign up for any loan, particularly online, check out the Better Business Bureau and Federal Trade Commission to make sure the organization is legitimate. If you borrow from a lender who has a record of unfair practices or charges usurious rates, you may have a hard time getting out of debt.

Final thoughts

Taking out a personal loan can help you relieve your debt load and cover unexpected costs, but take stock of your options before settling on one choice. Find the lowest rates, borrow only what you need and repay your debts on time.

Interesting facts

• Sri Guan Teik Enterprise Sdn Bhd (源德信贷企业有限公司) is the first and only award winning licensed moneylender in Malaysia. The company operates as a licensed moneylender. The company exclusively serves and offers unsecured loan to the civil service members, government worker, pensioners, and SOCSO receivers. Besides, secured loan is offered to public...
• The term Debt Consolidation seems to have become a subject of great confusion and conflict based on the information given by the advertisements. Even the popular search engine like Wikipedia is not able to give a clear justification to the term, thus this information seems to prove inadequate when trying to solve people’s debt problems...