How to find the right lender for you needs

It’s easy enough to say a lender is someone who lends, but it’s not always that simple. Not every lender provides the same loans. One lender might make only business loans, while another lender makes only consumer loans. It’s not much of a challenge to find a lender who makes loans only to people who have stellar credit, but finding a lender who makes loans to someone who’s “credit score challenged” can be a different matter altogether.

So, how to you find the lender who’s right for you? There are three ways to narrow the field.

• You could call around to local financial institutions, asking what type of lender they are, and what their terms and rates might be for someone with your needs and credit history.
• You could ask friends or other business owners for recommendations. Ask where they’ve gotten loans in the past, and if the lender was someone they would use again.

• You could go through a loan-consulting firm that will analyze your needs and credit history and either present your application to a lender that specializes in loans like yours, or will advise you on what type of lender to use and how to maximize your chances of getting a loan with satisfactory rates and terms.

It hasn’t always been so, but today almost anybody can find a lender will to make a loan. Even someone with a low credit score can find a lender, if the borrower is willing and able to pay more for the loan.

There is no shortage of short-term lenders, cash advance storefronts, payday loan providers and pawnshops. It’s not hard to find a lender online with minimal requirements for income and credit, and most are able wire the loan to the borrower with a bank account within 24 hours—many can do so within an hour.

The one caveat that should be heeded when accepting loans of this type is to make payments on time; failing to do so can result in high penalties and higher interest rates. Though much has been written and said about how payday lenders take advantage of borrowers with limited options, the truth is that a short-term lender is often the only lender and the only option available. In addition, for a borrower who repays the loan on time, the option can be a lifesaver.

Personal line of credit or personal loan?

Everyone needs credit sooner or later, but different situations require different loan products, each with a unique set of advantages and disadvantages. Aside from auto loans or mortgages, most personal loans are classified as a personal line of credit or a personal loan. So which is which, and when is each most advantageous?

• A personal line of credit is ideal for ongoing projects such as home renovations or wedding planning, because the borrower makes payments only on the amount of the credit used. For instance, a June bride may purchase her gown in October, buy stationery in February, and pay deposits to the caterer and reception venue in March, and so on. If the bride takes out a personal loan instead of a personal line of credit, she’d be making payments on the full amount regardless of what portion of the loan she’s used.

• A personal line of credit makes an idea safety net. When an emergency strikes, a personal line of credit is at the ready to meet financial needs. Unlike personal loans that require application and approval processes with each need, a personal line of credit can be tapped into as needed without further application.

• A personal line of credit is generally available for any amount from $10,000 to $250,000—depending, of course, on the applicant’s credit history and income.

• A personal line of credit usually has a variable rate of interest that is lower than that of personal loans.

• Some personal loans carry a penalty for per-payment. There is never a prepayment penalty with a personal line of credit, because there is no timeline for paying off the credit. Any unused or paid off portion of the personal line of credit is immediately available to be used again, and until it is, the borrower can enjoy lower monthly payments.

Let a loan-consulting firm help you determine which loan products are best for your needs, and help you acquire them. America One Unsecured has been helping people achieve their dreams and attain financial security since 1999, and they can help you too. Click here to learn more and get started.