Home > Personal Loans > What to Look for in Loan Companies

Comments 0 Comments

Sometimes you’re in a tight spot and need to borrow money. Personal loans are a great way to borrow money when you need it. But when it comes to finding a loan company, how do you know who to trust? Credit.com is going to help you know what to look for in a loan company.

What Is a Personal Loan?

A personal loan is when you borrow money and pay it back at a later time with interest. In order to determine your eligibility for a loan, lenders use:

  • Your credit score and credit history
  • Your income
  • Your employment status
  • Your other debts and expenses

Once you’re approved for a loan, you’re told how much you pay each month, as well as how long the payments last. Failure to do can lead to your account being sent to collections and possible legal action against you.

Reasons to Get a Personal Loan

Getting a personal loan isn’t always hard. But that doesn’t mean that you should apply for every loan you see. Apart from the fact that you can find yourself under a mountain of debt, there is one other huge reason why you should proceed with caution when applying for personal loans-they show up as hard inquiries on your credit reports. Too many hard inquiries can lower your credit score.

That, however, doesn’t mean that there aren’t some excellent reasons to get a personal loan. Some reasons to get a personal loan include:

Medical Expenses

Medical emergencies are never convenient. In many cases, you find that when the worst happens, your medical insurance doesn’t fully cover you. You have to pay for the rest yourself. If you don’t have an emergency fund or your savings account is running low, then you might have to take out a personal loan. A personal loan can help you pay off these medical expenses and make them more managable.

Home Improvement

Home improvement projects are a popular way to increase your home’s value. Some of these projects, like roof replacements, cost thousands of dollars. Taking out a loan for home improvement projects may actually end up paying off.

Debt Consolidation

If you’re carrying debt on different credit cards, then a debt consolidation loan may be your answer for paying these accounts off. Sometimes, you may miss a few of these payments-not because you can’t pay but because you simply forget to pay it. These late payments lead to additional late payment charges and increased interest on credit card debt. To avoid late fees and high interest rates, you can pay off all your credit card debt with a loan.

Big Purchases

Whether you want to buy a car or replace some of your home appliances, you probably don’t have enough cash to pay for it upfront. Taking out a personal loan can help you pay for these purchases.

As long as you have a plan on how you’re going to pay back your loan without missing a payment, taking out a personal loan can be very beneficial. However, you need to use the right lender.

What to Look for in a Loan Company

If you’re thinking about taking out a personal loan, here are some things consider before choosing a personal loan company:

  • Interest rates: Variable interest rates are often cheaper at the beginning but riskier in general.
  • Reputation: Do these loan companies stick to the contract you signed? Will they share your private information with advertisers or other companies?
  • Terms of the loan: You need to find a company with flexible repayment terms. One that not only offers the best rates but one also willing to work with you and allows you to set your payment date.
  • Upfront fees: A loan company that has a lot of upfront fees may not be worth it.

Finally, you need to find a loans company that cares about you as a customer – one that offers you 24/7 customer service and one always ready to talk to you about your loan.

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other sponsored content on Credit.com are Partners with Credit.com. Credit.com receives compensation if our users apply for and ultimately sign up for any financial products or cards offered.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.



Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team