A personal loan can be an excellent way to consolidate credit card debt at a lower interest rate and save money. It can also be a cheaper alternative to charging a credit card for major expenses, such as financing a wedding. Before applying for a loan from a lender, it's important to make sure you have the necessary credit score. Most lenders approve personal loans with an interest rate between 6% and 10% for borrowers with good credit. FICO recommends using less than 30% of your total credit limit to improve your credit score, but the lower you can keep the percentage, the better.
Even if you have bad credit or good credit, there are options available to you if you need to borrow a large amount of money. Closing credit card accounts that you no longer use can hurt your credit rating, even though it may seem illogical. We've briefly mentioned some of the common components of a typical credit score in these tips, but if you want to know all the factors that could influence your score, you'll find them (and the level of influence they have on your score) in the graph below. A lender that specializes in borrowers with fair credit or bad credit may give you the best chance of qualifying for a loan. Lenders tend to have large ranges of loans, and your minimum requirements for approval (credit score, income, and other factors) will determine if you can get at least the lowest loan amount.
A low credit utilization ratio shows lenders that you only need to use a small amount of the credit they've lent you, so they're more confident that you'll be able to repay a loan on time. The APR is the cost of credit as an annual rate and reflects both your interest rate and an opening fee of 0.99% to 5.99% of your loan amount, which will be deducted from any loan income you receive. Your personal credit report includes appropriate contact information, including a website address, a toll-free phone number, and a mailing address. A Best Egg personal loan might be a good option for you if you have several years of credit history, the ability to repay the loan, and a credit score of 640 or higher. Even opening a new account could hurt your credit score temporarily, but as long as you use the new credit responsibly, your score should pick up quickly. If you're looking for ways to improve your chances of getting approved for a $10,000 loan with good or bad credit, there are several steps you can take.
First, make sure that all of your bills are paid on time each month. This will help demonstrate that you are responsible with money and can be trusted to pay back any loans that are taken out. Additionally, try to keep your debt-to-income ratio low by paying off any existing debt before applying for new loans. Finally, make sure that all of your accounts are in good standing by checking your credit report regularly and disputing any errors that may appear.