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What it is
Conditions refer to a variety of factors that lenders may consider before extending credit. The conditions may include:
- How you plan to use the proceeds from the loan or credit account.
- How your loan amount, interest rate, and term may be impacted by market conditions or the state of the economy.
- Other factors that may impact your ability to repay the debt ― for example, a mortgage lender wants to know if the property you’re buying is in a flood zone or in an area prone to wildfires.
Our standards for Debt-to-Income (DTI) ratio
Once you’ve calculated your DTI ratio, you’ll want to understand how lenders review it when they’re considering your application. Take a look at the guidelines we use:
35% or less: Looking Good – Relative to your income, your debt is at a manageable level
You most likely have money left over for saving or spending after you’ve paid your bills. Lenders generally view a lower DTI as favorable.
36% to 49%: Opportunity to improve
You’re managing your debt adequately, but you may want to consider lowering your DTI. This may put you in a better position to handle unforeseen expenses. If you’re looking to borrow, keep in mind that lenders may ask for additional eligibility criteria.
50% or more: Take Action – You may have limited funds to save or spend
With more than half your income going toward debt payments, you may not have much money left to save, spend, or handle unforeseen expenses. With this DTI ratio, lenders may limit your borrowing options.
How to Get an Easy Personal Loan
While the process varies by lender, follow these general steps to apply for an easy personal loan:
- Check your credit score. It’s best to know your credit score before you apply for a loan. You can find your score through your bank or credit card provider, or through one of the many free sites that offer credit scores. Understanding your score can point you in the direction of a lender that can serve you best.
- Take time to boost your score, if necessary. If your credit score is below the minimum threshold, take time to improve your score. As a good rule of thumb, make sure there are no errors on your credit report and pay down your balances.
- Determine what you can afford to pay. You should understand what monthly payment you can afford before you apply for a loan. Go through your current expenses and income to calculate what you can manage. That will keep you from taking out a loan that you can’t pay back.
- Prequalify with multiple lenders. Some lenders offer a prequalification process that lets you see what terms you may receive—if you’re eligible—without hurting your credit score. Prequalifying with multiple lenders is the easiest way to find the best offer for your specific situation.
- Submit your application. Once you find and choose a lender that works for you, fill out the formal application. To complete the application form, you’ll have to provide your birth date, contact information, Social Security number (SSN), employment information and other relevant details.
Frequently Asked Questions (FAQs)
If you don’t have any income, you’ll find it much more difficult to qualify for a personal loan. Proof of income is important to lenders. If you have low income, unstable income or no income at all, you’ll likely need a co-signer or co-borrower to qualify for a personal loan.
Exact credit score requirements vary among lenders, but in general, the minimum credit score necessary to get a personal loan is between 580 and 600.
Credit scores are a crucial factor when applying for a personal loan. If you have bad credit, you’ll find it more challenging to get a personal loan. Fortunately, there are lenders who cater to borrowers with bad credit, including those on this list. If you don’t qualify for an easy personal loan, take time to improve your score before reapplying.
Comparing other financing options to personal loans
Personal loans may not be the right solution for everyone. Be sure to compare and contrast the pros and cons of various funding options before you make a decision.
|Credit cards vs. personal loans|
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|Credit cards with 0% intro APR on balance transfers vs. personal loans|
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|Home equity lines of credit (HELOCs) vs. personal loans|
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|Borrowing from family or friends vs. personal loans|
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Before you take out an easy loan, make sure you explore all of your borrowing options. Doing so can help you pay the least amount of interest possible or get the best terms. If taking out an emergency loan is your only option to access cash quickly, prequalify for a personal loan to compare rates, fees and terms from multiple lenders. If you have a membership with a credit union or bank, contact it to see if you qualify for a personal loan.
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