A Complete Guide:
Getting a Personal Loan in Schenectady New York

Generally there are a handful of bits of data to take into account in this first step. Start by being realistic about what you need. It‘s important to remain realistic here because borrowing more than you need probably will not really help you in the long run.

One place to start is by utilizing a personal loan calculator. Here, you’ll input your desired loan amount, the number of months you want the loan for, and the estimated interest rate associated with the loan.

With this info, our calculator will display your estimated  monthly payments, the amount you’ll have to pay back (with the interest factored in), and the total cost of the loan.

If you have not discovered a lender you’d like to work with, it might be difficult to identify things like your desired loan amount, the expected amount of interest, and the length of the loan. However, this process will give you a general idea of how personal loans work and what rates and monthly payments you can expect.

Depending on your lender, you will want to watch out for origination fees.

An origination fee is an upfront fee that some lenders charge to process a loan application. Typically, these fees are a percentage of the loan, ranging anywhere from 0.5% to 1%.

Another fee to keep an out for is prepayment penalties. This is crucial because if you’re doing well on your repayments and are in a position to pay off your loan ahead of time, your lender may charge you penalties for that. This will be described in your final loan documents.

One of the last sets of data you’ll need to consider is your credit score. Your lender will examine this number closely.

Currently there are plenty of free online tools to get your personal credit score.

At a minimum, you’ll need a “fair” credit score in order to receive a personal loan. Borrowers with “good” or “excellent” credit will find lenders offer more competitive rates with favorable terms compared to borrowers with “fair” or below crdit.

There may be other determining factors, aside from your credit score. For example, you might have an excellent credit score but have a high debt-to-income ratio. Many lenders consider a high debt-to-income ratio to be a negative.

This being said, your other streams of debt might come into play here, i.e., credit card balances, student loans, and home mortgages. Still, do not let any of this deter you from checking your rates.

Another factor you’ll need to be aware of is whether you’ll need a secured loan or an unsecured loan.

Secured loans require collateral. With a secured loan, you might need to put your house, your car, your savings, or other assets to back the loan. Putting up collateral could help you secure a better rate from a larger pool of lenders if you fall into the “fair” credit category.

Unsecured loans do not require any collateral. This is why it’s important to look at all your options, as the difference between a secured or unsecured loan can be a major difference.

Prior to applying for a loan, take a look at each the lender or banks reviews. If you’re looking into a personal loan with a community bank or credit union, you’ll most likely already have a relationship with that financial service provider.

Yet, there are numerous online lenders who are perfectly} reputable and will offer you competitive rates. In many cases, online lenders offer lower APRs than traditional lenders and community banks because their online process is much cheaper to run than a brick and mortar bank location.

Yet another factor of personal loans is that they come with a fixed interest rate. This simply means that you’ll have the same monthly payment throughout the lifetime of the loan. This is good because you won’t be surprised by an increasing monthly loan payment and can budget accordingly.

This is among one of the most common uses for a personal loan. If you have debt with a couple of different credit card companies, consolidating that debt into a persona loan can help consumers save thousands of dollars and set up a path to get out of debt.

Life has plenty of unanticipated emergencies. Perhaps your car needs an expensive repair or your home needs a new heating system in the winter.

Regardless of the emergency expense, personal loans are a great option to help you out of a financial pinch.

Did you know the average cost of a local move is $1,250? And the average long-distance move costs $4,890? If you don’t have that kind of cash on hand, you may need to take out a personal loan to pay for moving expenses.

Personal loan funds can help you move your household belongings from one place to another, purchase new furniture for your new residence, transport your vehicle across the country and cover any additional expenses. Using a personal loan for moving costs can also help you stay afloat if you’re moving somewhere without a job. This way you can avoid raiding your savings or emergency fund.

Did you know the average cost of a wedding in 2019 was $28,000. For couples who don’t have that kind of cash, a personal loan can allow them to cover the costs now and repay them later. A single personal loan can be used for big-ticket items like the venue and bride’s dress, as well as smaller expenses like flowers, photography, the cake, and a wedding coordinator.

You can also consider paying for the engagement ring with a personal loan. The rule of thumb is you should spend at least 2 months’ salary on the engagement ring, for example, if you are making $60,000 per year, you should spend $10,000 on the engagement ring. If you don’t want to deplete your savings account, consider a personal loan to help make your engagement and wedding exactly the way you always dreamed it to be.

Your average vacation might not cost enough to necessitate taking out a personal loan, but what about a honeymoon or a luxury cruise? Whether you’ve just graduated and want to go on a trip or you’re celebrating an anniversary, personal loans can help you finance your dream vacation.

Savvy homeowners can use a personal loan to upgrade their homes or complete necessary repairs, like fixing the plumbing or redoing the electrical wiring.

A personal loan is a great option for people who don’t have equity in their home or don’t want to get a home equity line of credit or home equity loan. Unlike home equity products, personal loans often don’t require you to use your home as collateral. Making them less risky.

While a personal loan is a great tool to finance unexpected expenses or larger purchases, sometimes a personal loan might now be your best option.

While applying, consider your financial situation and the reason for taking out the loan. Individuals with fair or below credit might be subject to a very high-interest rate, if the interest rate is too high, a personal loan might not make sense. The lower your credit score, the higher your interest rate could be. If you have poor credit, shop around for bad credit loans, which cater to borrowers with a less-than-perfect score.

A personal loan also may not make sense if the loan is used for a purchase that would qualify for a better loan type like real estate, automobiles, and education. Mortgages, car loans, and student loans are all designed specifically to fund a particular expense and each comes with features and benefits that personal loans do not offer.

Lastly, if you’re on a tight monthly budget, a personal loan may not make sense for you. Some may find that the payment on a personal loan would be higher than their various minimum payment requirements combined. This can potentially leave you with more accumulating debt and a cash flow crunch.

When searching for a personal loan, you should compare multiple lenders to find the lowest interest rate.  A good place to start is your current bank. After that, you can begin to apply with online lenders, local credit unions, and other banks. A majority of online lenders will allow you to get prequalified, letting you see your potential interest rates and terms before you apply, all without a hard inquiry on your credit report. Along with interest rates, you should also compare loan terms and fees.

After finding a lender you like, you then submit a complete application with your loan details, personal information, and income verification documents. This will result in a hard inquiry on your credit report. For most lenders, this part of the process is quick; as long as you submit all relevant documents, you may be able to get your funds in a matter of days.