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Frequently Asked Questions
A personal loan is money you borrow from a bank, online lender or credit union. The money you borrow is repaid in fixed monthly payments over the term of the loan, usually between one to seven years. A personal loan can be used for almost any purpose including debt consolidation, large purchases, home improvements or urgent expenses.
Personal loans come with a fixed or variable annual percentage rate (APR) which usually ranges from 6% to 36%. Calculated on a yearly basis, the APR for personal loans includes the interest rate plus any other lender fees, such as an origination fee. The origination fee is between 1% to 10% of the loan amount and is typically deducted from the loan money sent to you. The APR you are charged depends on your credit score and debt-to-income ratio. Those with excellent credit scores of 690 or above who have a steady income and low debt-to-income ratio usually get the lowest interest rates and will have more loan options. Use our Personal Loan Calculator to see how the APR and repayment terms affect your monthly repayments.
We recommend that you carefully follow the steps below to ensure that you pick the right loan option for you:
- Check your credit score: This will give you an indication of the personal loan options available to you. You can get a free annual credit report at AnnualCreditReport.com.
- Search for Loan Offers: Search loan offers from our lenders using your credit score as one of the criteria. Identify lenders who offer you the lowest APRs available.
- Pre-qualification: Before making a final decision on a loan offer, you can pre-qualify with most online lenders without impacting your credit score. Get yourself prequalified by several lenders so that you can compare interest and fees.
- Calculate your total monthly payments. Use our Personal Loan Calculator to work out your monthly payments for the loan options that you receive, based on features such as their APRs, loan amounts and repayment terms.
- Read loan offer reviews: Before committing yourself, read online reviews from other borrowers to understand pros and cons of each offer.
- Apply for loan: This is when you officially apply for the loan offer of your choice. A hard credit check will be performed which can temporarily lower your credit score. At a minimum, you will need to provide proof of income and a government issued ID.
Some lenders fund the loan as quickly as one day after approval, but others can take up to a week or more. Look for fast personal loans to find same day or next day funding offers.
Personal loans can be a lifeline for borrowers with lower credit scores (those between 350 to 579) as the loan money can be used to pay off credit cards and other debts and help to rebuild credit. LendMeMoney collaborates with some lenders who specialize in offering loans for customers with low credit scores. Typically, they offer smaller loan amounts, shorter repayment terms, and higher interest rates. You may also consider finding a co-applicant with good credit to get a better rate. The co-applicant would be responsible for making the loan payments if you fail to do so.
Personal loan refinancing is the process of replacing your current loan with a new one, ideally with lower personal loan interest rates and better terms. The potential benefits of personal loan refinancing include saving money with low-interest personal loans, securing the best loan rates, and reducing your monthly payments. You can use the Personal Loan Calculator to understand how refinancing could impact your monthly payments and overall savings. A good credit score can help you qualify for more favorable terms, including lower interest rates and more flexible loan options.
A decrease in interest rates can significantly impact loan refinancing by allowing you to secure a new loan with a lower interest rate than your current one. This can result in lower monthly payments and long-term savings, making it an attractive option for borrowers seeking good APR for personal loans.
Yes, personal loans can be refinanced multiple times. As your financial situation changes, you can explore loan refinancing to better align with your needs and goals.
Lenders typically have specific criteria for approving refinancing, considering factors such as your credit score, income, employment history, and debt-to-income ratio.
Paying down the initial loan balance is crucial for refinancing, as it can improve your loan-to-value ratio. A lower loan-to-value ratio often leads to more favorable loan terms, including lower interest rates.
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