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A personal loan can be a helpful resource when you need to pay for large or unexpected expenses. But to make the most of one, it’s best to have a reliable plan to pay it off.
If you have decided to apply for a personal loan , consider all of the factors that go into taking a loan on, including your financial standing, the lender you use and how you will pay it off. Follow our eight-step guide to walk through the process.
Before you begin the process of applying for a personal loan, gather all the documents and information you need along the way. Doing so will allow you to move through each step of the process efficiently and get your funds as best payday loans in Covington quickly as possible.
- Personal identification, such as a driver’s license, Social Security card or passport.
- Proof of income, such as W-2s, paystubs or filed tax returns.
- Employer’s information, including the company name, your manager’s name and the phone number.
- Proof of residence, such as a utility bill with your name and address or a lease agreement.
How to get a personal loan in 8 steps
There are many reasons to get a personal loan , like an unexpected hospital bill or a necessary car repair. If you’ve decided that a personal loan is the right type of financing for you, follow these eight steps to apply .
1. Run the numbers
The last thing you or lenders want is for you to take out a personal loan and not be able to afford to pay it off. While lenders typically do their due diligence to make sure you have the ability to repay the debt, it’s smart to run your own numbers to make sure it’ll work out.
Start by determining how much cash you’ll need, keeping in mind that some lenders charge an origination fee , which they deduct from your loan proceeds. Make sure you borrow enough to get what you need after the fee.
Use a personal loan calculator to find out what your monthly payment will be. This can be difficult if you don’t know what kinds of rates and repayment terms lenders will offer, but you can play around with the numbers to get an idea of what the loan will cost you and decide if your budget can handle it.
Takeaway: Before you apply for a personal loan, find out whether the lender charges an origination fee – and if it does, ask what the fee is. Figure out how much cash you’ll need after fees, and a monthly payment you can comfortably afford.