How to Get a Personal Loan in Phoenix AZ

Opting for a personal loan in Phoenix, AZ is very common for a variety of reasons. Some people are looking to pay a medical bill, consolidate credit card bills, get help with a move across the country or pay a surprise veterinary bill. No matter the reason you need extra cash on hand, choosing a personal loan in Phoenix, AZ might be just what you need.

Personal loans in Phoenix, AZ are also referred to as unsecured loans. This means that the loan does not require collateral, such as a car or a home. Personal loan amounts can range and are usually paid back in fixed, monthly amounts over the span of a few years. Your interest rate and term will vary, depending on your lender.

1. Assess Your Credit Score

Having a good credit score will help you receive the best personal loan in Phoenix, AZ. It gives you the best chance to receive a lower interest rate. There are many free sites to check your credit score for free. These sites include Credit Karma, Nerd Wallet and even your own personal banker.

In general, these are the ranges of credit scores:

  • 720 and higher: Excellent credit
  • 690-719: Good credit
  • 630-689: Fair or average credit
  • 300-629: Bad credit

If you find yourself in not the best of shape, there are still ways you can improve your current credit score. You can take small steps like making payments on past due bills, disputing any errors and trying to increase your credit limit.

2. Get Pre-Qualified

Lenders will want to check your credit score and in many cases they can do so by choosing a soft credit check. This means they can check your credit without affecting your credit score.

During a pre-qualification process, you can expect to be asked for the following information:

  • Social Security number.
  • Monthly debt obligations (rent, student loans, etc.).
  • Income.
  • Employer’s name, work address and phone number.
  • Address, email, phone number.
  • Previous addresses.
  • Date of birth.
  • Mother’s maiden name.

In some cases, you still may not pre-qualify for a personal loan in Phoenix, AZ. In addition to low credit scores, here are some reasons you could be denied:

  • Too little income.
  • Little or no work history.
  • A high debt-to-income ratio. Anything above 40% may be considered risky.
  • Too many recent credit inquiries, such as credit card applications.

3. Shop the Market

Personal or unsecured loans in Phoenix, AZ. are plentiful. You can find offers from online lenders, banks, and credit unions. To make fair comparisons, scan over loan amounts against monthly payments, interest rates and other terms.

4. Read the Fine Print

Understanding all the fine print is what will help you decide if a personal loan in Phoenix, AZ is right for you. This means asking tons of questions and keeping an eye for things, such as:

  • Prepayment penalties. These are fees assessed if you pay your loan off early.
  • Automatic withdrawals. Some lenders require automatic payments, so this means you need to keep close tabs on your checking account funds to avoid overdraft fees.
  • Annual percentage rate (APR). You should try to calculate the total cost of your loan to include origination fees and the APR to have full disclosure.
  • Flexible payment options. In some cases, lenders offer you the choice of your payment due date.

5. Plan for Repayment

The most important part of your personal loan in Phoenix, AZ. is to have a solid plan for repayment. The bottom line is that if you cannot repay the loan, you shouldn’t take one out in the first place.

When you begin to plan for repayment, there are several steps you can take before you take out a personal loan. Consider these first:

  • Budget. Are you able to comfortably fit the monthly payments into your budget?
  • Make automatic payments. Instead of making a conscious effort each month to make your payment, set up automatic payments to ensure your bill gets paid on time. In some cases you may even receive a rate discount of 0.25% from your lender for doing so.
  • Inquire about refinancing opportunities. Although rare, you might be able to refinance your personal loan in Phoenix, AZ for a lower rate.

Bottom Line

Personal loans in Phoenix, AZ. are very popular and for good reason. They can easily help you out of a bind or a financial emergency. If you need a personal loan, be sure you understand all of your obligations and that it fits into your budget.

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