Apply for a Personal Loan

Before you decide to apply for a personal loan, check your overall financial position. Here are three things to consider before deciding if you should apply for a loan:

How is Your Credit? If you don't have good credit, then the chances are that you are going to get a high-interest rate. If you have credit issues, then check on the best ways to improve your credit score. Start by checking your credit report and, if necessary, dispute any incorrect negative items.

Can you afford the monthly payments?: Even if you qualify for a personal loan, that doesn't mean it is affordable. Since the term of the loan is short (usually between 2-5 years), the monthly payments can be high. Take into account your total financial picture and make sure that you can afford the monthly payments.

Does the loan meets your financial goals: You can take a personal loan for many reasons. Check to see that this is the best solution for your situation. For example, if you are looking to make home improvements, then a home equity loan or a cash-out mortgage refinance loan might be more affordable. If you are looking to pay off debt, see if the loan offers a lower interest rate. If you are struggling with debt, then other solutions may be either cheaper or more practical.

Shop Around: Almost any lender lets you make an online application. You will need to provide them with basic financial information and allow for a credit pull. When shopping for an online loan, the lender will probably only do a soft pull. Check out the terms, including the rate, fees, and length of the loan.

Choose a Lender: Banks and credit unions offer personal loans. However, personal loans have become a popular product with many non-bank lenders, including peer to peer and non-bank lenders such as SoFi, Lending Club, and Prosper.

Get Your Financial Details Ready: Most lenders require the application form to include personal information, income and employment information, and data about your housing expenses. Depending on your situation, the lender will require you to submit other documents, such as wage slips, W2 form, and utility bills. For a more detailed list, check out Wells Fargo Personal Loan Checklist.

Once approved, lenders can almost immediately wire money to your account. However, take the time to make sure that the loan best fits your financial situation.

Before you shop around you might want to read about the best personal loan lenders. Compare lenders based on rates, loans amounts, and credit score requirements. Bills.com also offers you detailed information about lenders such as Avant, Sofi, FreedomPlus, and Wells Fargo.

Use Bills.com Personal Loan Calculator to check different loan scenarios. You can compare monthly payments based on varying loan amounts, repayment periods, and interest rates.

Are you already servicing too much debt? Will the new personal loan add to your debt load, or make it more affordable? Check out Bills.com Debt to Income Ratio Calculator before you apply for a personal loan.