F.A.Q – Frequently Asked Questions
A signature loan is a type of installment loan, meaning you pay it back over a set period of time with a predetermined amount each month. Rates for installment loans can vary from 5.99% to 35.99%, and the payback terms can be anywhere from 90 days to 72 months (or six years). The type of rate and term you get will vary on the lender and your state. Generally speaking, regardless of where you live, if you take out a larger loan, you’ll have more maneuverability with your APR, term, and processing fees.
How fast will I get my money if my application is accepted?
In some cases you can get your money the same day, but normally it arrives the next business day. To expedite the process, however, make sure you apply before 3 PM on a business day. Most lenders use ACH to transfer money to your account, but some are known to transfer to credit cards. Before applying, clarify with the lender as to how and when you will receive your money.
What is a credit score and how does it affect me?
A credit score is a number that credit bureaus give to individuals to reflect their financial responsibility which is based on their past credit history. It affects you whenever you apply for credit or loans because, if you have a low score, you may be denied access to a line of credit or given a high APR.
How can I check my credit score?
Certain banks or credit card companies will update you on your credit score throughout the year at no cost. However, you can also go to each of the three credit bureaus and request your credit score. The three bureaus are:
At MyFico you can see your credit score from all three. If you need to know what’s on your credit report, you can go to www.annualcreditreport.com once a year and get an update from all three credit bureaus for free. You won’t be able to see your score, but you will at least know what’s hurting it.
I was denied a loan. How can I improve my credit score?
There are many paths to a higher credit score, but here are the most common methods:
- Ensure you make all future payments on time.
- Get negative marks removed from your credit history one at a time.
- Have all credit cards paid off except one. For the card with a balance, have the balance be over $2.00 and less than 8.9% of the total available.
- Never max out any credit cards (note: 88.9% is considered maxed out).
- Only ever go up 38.9% of a card’s available balance.
- If you have zero open credit cards, open 3. No more, no less. If you have to secure the credit card with a deposit, do so.
- Take out an installment loan, such as signature loan, and get remaining balance down to 8.9% as quickly as possible.
I have a very low credit score. Can I still apply?
TThe short answer is yes, you can still apply. Lenders look at a variety of factors when deciding to approve or deny a loan, such as net income.
What is a good and a bad credit score?
Anything over 700 is considered to be good credit, and anything over 800 is excellent. Most people’s credit scores are between 600 and 750.
Poor or bad credit is anything from 300-579.
Do I need an income to apply for a loan, if so how much?
For signature loans, the recommended net income is at least $2,000 a month or more. There are other loans that only require $1,000 a month, but signature loans have higher requirements.
Can a personal loan application affect my credit score?
Yes, anytime you apply for a line of credit with a lender and that lender runs a credit history check on you your credit score will be affected. However, credit bureaus recognize that borrowers need to shop around and compare rates, so if you apply to several lenders within the same time frame your score will not be greatly affected.
Taking on more debt will also negatively affect your score; however, debt can work towards your favor when you have consistent, on time payments. Your payment history is the biggest contributor to your credit score.