Personal Loans

A personal loan is a type of installment loan that can be used for a wide variety of purposes, with a fixed repayment window and monthly payment. When a loan is disbursed, borrowers will receive a one-time payment of cash from their lender and will then be responsible for paying that amount (plus interest) in regular monthly installments over the life of the loan.

Unlike auto loans and mortgages, personal loans are not typically secured by any kind of collateral and provide a great short to mid-term financing option to borrowers with different needs. 

Personal loans are very flexible and can be used for a variety of purposes. Most people use personal loans to consolidate debt (including credit card debt), finance large purchases, cover medical expenses, pay for short-term obligations, and more. However, it is important to note that approved loan purposes can also vary from lender to lender. It is always a good idea to check lender eligibility requirements and approved loan purposes before making a decision.

Some lenders will disclose their minimum credit score and income requirements, as well as other factors that affect eligibility. However, with so many factors that can affect a credit application, it's hard to know whether you will qualify based on that alone.

The two most important factors considered in your personal loan application will be (1) your credit score or history, and (2) your income. Lenders may request additional information to help verify your identity, income, and other relevant details included in your loan application.

If you are simply checking your rate, a lender may just run a soft inquiry on your credit to give you more precise rate information or a pre-approval; this will not affect your credit score. 

However, if you are submitting a personal loan application, the lender will more than likely run a hard inquiry on your credit, which will certainly impact your credit score. Usually, this only lowers your credit score by a few points, but other factors like the number of credit inquiries, overall debt balances, and other items reported in your credit profile may impact it further. On-time payments will help you build credit and strengthen your credit profile.

Lenders may charge an origination fee - which covers the processing, administrative, and underwriting fees involved in the lending process - and can vary from lender to lender. Origination, and other, fees are typically disclosed in the loan terms.

For a full list of applicable fees (including late fees, prepayment fees, etc.), please contact your lender directly.

Most lenders allow borrowers to pay off their loans early with no prepayment penalty. Others may not allow it at all or opt to charge a prepayment penalty, as disclosed in the loan terms. You should always confirm your repayment terms with your lender before proceeding with an early payoff.