How your credit score affects a personal loan
If you have a fair to good credit score, then a personal loan from a bank or credit union may still be possible, but you must first know your credit score and how it affects you. Before applying for a personal loan for debt consolidation or for any other reason for that matter, you must first know what your credit score is. There are online resources that offer free credit reports, but you should always read all information before using one these services because some have hidden charges. Everyone is entitled to a free annual credit report from the three major reporting agencies. Once you know your credit score, then you will have an idea of where to start shopping for a personal loan. You can find quick unsecured personal loans with affordable interest rates.
A credit score below 500 is bad. A score of between 501- 600 is generally considered poor. If you have a bad or poor credit score, then your chances of receiving a low-interest unsecured loan are slim to none, but if you have some type of collateral or a cosigner to secure the loan, then it may be possible to get a low-interest personal loan. A credit rating between 601-660 is considered fair. With a fair credit score, you may still need some form of collateral or maybe even a cosigner, but some lenders may be willing to offer you a loan but at a higher interest rate than if you had good or excellent credit. A credit score of 661 – 739 is considered to be good credit. With good credit, you can find a low-interest personal loan without having to secure the loan depending on how much you are trying to get.
When shopping for a personal loan, always seek the lowest interest rate possible with repayment terms that will not adversely affect your budget, and never borrow more than you can afford to repay.