Four essentials to know before you apply for a personal loan

A credit score of 690 or higher helps lower your interest rates
Published: Aug. 11, 2022 at 9:54 AM MST
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InvestigateTV - Personal loans can be a useful financial tool for financing home improvements, consolidating credit cards, or handling an emergency.

Most personal loans are unsecured meaning you don’t need collateral, like a car or house. If this is what you need, there are several steps to take to secure a loan like this. 

Our partners at the financial website NerdWallet helped us put this list together.

Check your credit score: A strong score gives you the best chance at not only qualifying but getting a lower interest rate. A good credit score is 690 or higher, and an excellent score is 720 or higher.  You can check your score for free at AnnualCreditReport.com.

Figure out how much to borrow: Don’t borrow more than you need. A larger loan amount has more interest and higher monthly payments. 

Do your research: Compare estimated rates to figure out how much you would owe each month and make sure it fits within your budget. 

Get pre-qualified if, you can: It will give you a sneak peek at the offers you may receive.  You will need to be able to answer a few questions such as your loan purpose, loan amount, income and how much money you already owe.

Once you have taken the above steps, shop around. Online lenders, banks and credit unions offer safe, unsecured loans. Compare your pre-qualified offers with loan amounts, monthly payments and interest rates from various lenders to get the best loan offer.

Finally, always read the fine print to ensure you understand the exact terms and payment schedule.