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If you are considering taking out a personal loan, it is important that you find the right lender for your situation. All too often unwary consumers take out personal loans and just accept the first offer they receive. In many cases, these consumers end up paying higher interest rates and possibly additional fees because they did not take the time to shop around. If you want to get a good deal on a personal loan, the first thing you have to do is find the right lender.
Traditional Banks
The first option that many people consider is going to their own bank. This can really work in your favor if you have a checking and/or savings account with the bank and they value you as a customer. The downside though is that traditional banks do not always offer the best interest rates and it is more difficult to compare loan offers when you have to physically go to each bank and apply for a loan.
Online Lenders
There are multiple types of loans available online. For example, sites like creditloan.com, lendingtree.com, and wellsfargo.com offer personal loans for people with good credit, bad credit and for debt consolidation. One nice thing about visiting an online lending website is that you only have to fill out one application and the website sends it out to their partners for you. It is a much more efficient way to compare loan offers. Lenders connected with these types of websites tend to be very completive and you might be able to find a surprisingly good loan offer.
Credit Unions
If you have an account with a credit union, you might want to put them first on your list. Credit unions typically offer the best interest rates and reasonable repayment terms. Just like banks, they likely want to keep your business, so they may be a little more lenient about their lending criteria. It is still a good idea to compare offers, but if you can, add your credit union to your inquiry list.
Peer to Peer Lending
This is a relatively new way of borrowing money online. Websites like propser.com connect private investors with borrowers. The advantage to peer to peer lending is that a private investor may look at many different factors when considering your loan application such as why you are taking the loan out. You still need a relatively healthy credit score for most of these sites, but you might be able to find a better deal than most companies will offer you.
Taking out a personal loan is a big decision and obviously, no one wants to pay more than he or she has to. You can avoid being bulldozed into accepting a bad loan deal if you do some research beforehand. Do not be afraid to ask lenders questions and try to find out as many details as you can before you allow the lender to pull your credit report. The more you know in advance, the happier you will be when you do get your loan.
About the Author: Patty Kleen is a lending specialist who knows how tough it can be to compare and choose when it comes to loan options and debt. She enjoys helping her clients make objective decisions so they can move forward feeling secure in their finances.
