PERSONAL FINANCE BLOG

Money shouldn´t stop making your plans come true. Learn how personal loans can help you!
Choosing Personal Loans For Bad Credit
4 Mar 2019

5 Things You Should Consider When Choosing Personal Loans For Bad Credit

There’s a reason that we don’t all get our personal loans for bad credit from the same place – there really are differences between the loans available from different lenders, and they really do matter. These 5 things are among the most important factors that set the best lenders apart from the rest, and they’re what you should be looking at when it comes to choosing a lender for yourself.

#1 – The Interest Rates

The single most important thing to look at when choosing what loan offer to go with is the interest rates you’ll be paying. Unlike payday loans, where lenders usually cluster their interest rates very closely around the legal maximum, rates payable on personal loans are often based on the specifics of your application profile can vary by quite a bit. Just because one lender offers you a particular rate doesn’t mean that you can’t get a better offer from someone else if you look around a little more. This is even more important when you’re dealing with personal loans for bad credit, since these types of loans tend to be much more expensive than ones that are meant for the general public. Whatever interest rate applies to the loan you choose is the one you will be subject to for the next several months or years, so it’s not a choice to take lightly. Do your homework!

#2 – The Other Costs

Just because a loan seems affordable when looking at its interest rates alone does not mean that that is true. Many loan providers charge their borrowers various extra costs that may or may not be bundled into the stated APR, and if you want a true picure of what you’re getting into with regards to expenses, you’ll need to find out what the case is for the loans you are considering.

Luckily, you can find all of this information on the provider’s website and in any documentation that they give you – you just have to know to look for it. There are some specific things for which you can generally expect to pay a fee, so look there first. Are there any loan origination or closing costs involved? What are the late payment fees that you might face? What will you be charged if your loan falls into poor standing? Even if you don’t expect to ever have to pay any of these fees, you should still know about them just in case and factor them into your choice of lender. You never know what could happen during the time in which you are repaying your loan, and you don’t want your carelessness to come back to bite you at a vulnerable time.

#3 – The Loan Size

Personal loans for bad credit come in all kinds of sizes, and not everyone needs the same size of loan. Some may only need a little bit, while others’ needs might be more substantial. You alone know what you plan to do with your loan, and by extension, how big that loan needs to be. You need to find a lender willing to extend you a loan that will cover the full cost of whatever purchase you intend to make.

Be careful, though: bigger isn’t always better. Don’t just go looking for the biggest loan you can possibly get. Even though you don’t have to take them up on the offer for the full amount you are being granted, lenders who are overly generous with their loan amounts are often expecting a high rate of default among their customers. This can only end badly for you, so take it as a warning sign if you end up qualifying for a far larger loan than you think you can reasonably handle.

#4 – The Length of the Repayment Period

Another important consideration to make when choosing a loan is how long you will have to repay what you owe. This critical factor is what will determine the size of your payments as well as the total cost of the loan by the time you are finished with it. In general, you want to choose a loan that allows for a generous repayment period so you aren’t under too much pressure to pay everything back before you’re ready.

Don’t drag things on longer than you need to – doing that will only increase the amount of interest you will pay in the end, as you can see by using loan calculators like this one. Choose a repayment period that will keep your individual payments within manageable levels but still keep you working on your debt at a reasonably brisk pace. As always, too, don’t forget that your repayment period is not set in stone; if you can make larger payments toward your loan and finish off the total before your loan actually comes due, you’ll be even better off for having done so.

#5 – The Customer Service Available

Taking out a personal loan is a fairly long-term commitment; it often takes people several years to pay them off once they’ve borrowed. Because of this, you’ll want to do everything you can to make sure you’ll have support available for you if you need it. Choose a lender that is known for being responsive when their customers have queries or complaints that they need addressed. That way, you’ll never have to worry about how you’ll get in touch with them when you need them. The last thing you want if something goes wrong with your loan is to be left hanging in limbo for days with no way of solving the problem.

Let Us Do Your Research On Personal Loans For Bad Credit For You

You may now know what to look for when shopping for a personal loan, but that doesn’t mean you necessarily have the time to dig up all these details. If you let us help you instead by going to Bonsai Finance’s comprehensive website, we can spare you that time. You’ll get all the information you could possibly want on specific offers for personal loans for bad credit without having to do any of the legwork to find it. It’s the best way to make sure that you can make the best choices when borrowing money.