Comparing Installment Loans How to Find the Right Lender for Your Credit History

Comparing Installment Loans How to Find the Right Lender for Your Credit History

The lender will want to know your credit score before they consider approving your loan application. The APR interest rate that you are assigned depends on the credit score stated on your credit report. The higher the credit score, the lower the interest rate you will qualify for. Having low credit score means that you will face difficulty in getting a loan. Usually, the interest rate you pay will be high if you get approved for a loan with a low credit score on your credit report.

The easiest way to find a loan that you are eligible for is to use a loan comparison search engine. There are many loans comparison search engine that allows you to compare loans across all major lenders. You will have to provide information like how much you want to borrow, loan purpose, zip code, name, telephone number, social security number, and employment status. It will want to know whether you own your own home or is a tenant. You will also have to provide an estimate of your credit score range for example, excellent, good, fair and poor. If you states self employed as your employment status, you will be asked to enter your annual pretax income.

The loan comparison search engine will show a list of lenders that will approve loans at your credit score range. You will be able to compare the interest rates at a glance and see which lender is offering the lowest interest rate. The interest rate should not be the only thing that you are paying attention when comparing the loans. You should also take into account other factors like repayment period, prepayment penalty, and loan origination fees.

Shorter repayment period typically means a higher monthly payment and you pay lesser interest in the end. Longer repayment period means lower monthly payment and you pay more interest in the end. You should always choose shorter repayment period if you can afford it as it helps you to save money on the interest and you also pay off your loan faster. You can always negotiate with the lender to reduce/waive some of the fees or lower the APR interest rate. It is also possible to negotiate with the lenders by to offer you a loan term that is better than the original loan term.

If you have been refused by the creditors due to having bad credit, you should try to improve your credit score instead of continuing to submit more applications. Lenders will see you as someone who pose risk to them if your credit score is bad. You will have to pay high interest fees to compensate for the high risk that the creditor faces by extending the loan to you.

Installment Lending Offers, What are the Typical Fees If Your Credit Score is Average

Applying a loan with an average credit score means that you will get a higher quoted APR fee. The low interest rate advertised by the lenders is usually assigned to only a small group of applicants who have good or excellent credit score. Your credit score is not the only factor that determines the APR fee.

The lender will also assess other areas of your finance to determine if you belong to a low credit risk or high credit risk group. Borrowers with low credit risk will get a lower APR while borrowers with higher credit risk will be charged with a higher APR. Besides the APR interest rate, borrowers will also get charged with a variety of fees.

Most loans do not charge application fee nowadays. It is completely free to submit the loan application online. However, many loans do charge an origination fee which is an amount that you have to pay upfront. The origination fee is about 1-6% of the loan. The origination fee depends on your credit score. The lower your credit score, the higher the origination fee will be. It is automatically deducted from the loan amount before the funds is being released to the borrower so that you receive lesser than the full loan amount.

Many lenders do not inform their customers about the redemption fees. The redemption fee, also known as prepayment fee, is a fee that you must pay when you repay the loan in full prior to the end of the loan term. The redemption fee is fixed and will be the same no matter if you repay the loan fully a month after you apply the loan or a month before the loan term comes to an end. When looking for a loan, you should find one that does not charge any prepayment fee as you will probably have the funds to pay the loan in full before the loan term ends. Prepaying your loan can reduce the amount APR interest that you pay.

You can increase your credit score by promptly making repayment by the due date. If you fail to make prompt payment, you will be charged with extra fees like missed payment fees and late payment APR. Late payment will be reported to the credit bureau so that it appear on your credit report. The missed payment fee and late payment APR can be found in the loan agreement.

Before applying for a loan, you can request for a free credit report to check for any incorrect record that appear fraud. You can contact the credit bureau about the issue and they will start an investigation. If they find out that the record is incorrect, they will get it removed so that you can have a higher credit score.