Updated: Nov 8, 2021
People take personal loans for varied reasons, from needing to pay an unanticipated expense to consolidating several debts and more. There are even some who apply for a personal loan to finance projects like renovations or to use it for a huge purchase.
If you are thinking about getting a personal loan, you’d want to know everything you can about it, including how it works and, more importantly, what lenders will be looking for. After all, you want to make sure that you have a high chance of getting approved before submitting your application. Well, you are going to learn all that as Stones River Credit shares what lenders look for when you apply for personal loans in Murfreesboro, TN:
How Do Personal Loans Work?
Personal loans are a kind of installment loan, meaning you can borrow a specific amount of cash and then pay it in a set amount monthly, including interest, over the agreed-upon loan term. Most personal loans are payable in 12 to 24 months, though some long-term ones can last for up to seven years.
The amount that you can borrow varies from one lender to another, but they usually range between $1000 to $100,000. Several factors contribute to the amount that you are qualified to borrow, but the biggest consideration will be your credit status.
Once the loan is paid in full, the account will be closed automatically. If you wish to get more money, you can apply for a new loan.
What Lenders Look For
No matter what type of loan you are applying for, you always want to make sure that you’re presenting a good image, but that can be challenging if you don’t know what lenders are looking for. So, to help you out, here are some of the things lenders consider when someone applies for a loan:
Credit Score – This is the first thing that lenders check when you apply for a loan. They’ll check your credit report so they’ll have an idea of how well you handle your finances and whether or not you are a potential risk. After all, they want to make sure you can pay their money back. Needless to say, the higher your credit score is, the higher your chances of getting approved.
Employment History and Income – Lenders also want to check that you have a steady source of income from which you’ll get the money to pay them back. Your income also dictates how much you can borrow. If you have been working for years for the same company, you’re more likely to be approved.
Debt-to-Income Ratio – if your debt-to-income ratio is higher than 43%, your application will likely be rejected. There’s a chance you’ll get approved, but only if you have an excellent credit score and a high income.
These are just some of the things that a lender would look into and consider when you apply for a personal loan. Of course, there are other factors, too, but these are the ones that are most important. So, if you want to get approved for big or small personal loans in Murfreesboro, TN, make sure that you have a stellar credit score, a steady source of income, and a low debt-to-income ratio. Remember, though, that as a borrower, you need to do your homework and find the best lender in your area that can offer you the best deal.
Stones River offers personal loans in Murfreesboro, TN. We provide a variety of loan sizes to meet your needs and tailor affordable payment plans for our clients. Call us at 615-896-5006 to know more about our loans!