There are lots of reasons why you might be looking for low interest personal loans. In order to find the right personal loan for you, it helps to start by understanding interest rates.
Personal loans usually have much lower interest rates than credit cards. For example, personal loans usually come with interest rates between 6% and 36% as long as you have good credit. Most credit agencies consider a score of 700 or greater to be good.
Finding a low interest personal loan for bad credit can be difficult. Most short-term loans for people with bad credit scores come with high fees. However, we have a couple of 0% APR options in mind.
Overall, if you’re looking to secure low-interest rate personal loans, it helps to understand low interest rates and boost your credit score first. Here’s how you can improve your credit score and simultaneously find low interest personal loans.
Table of Contents
1. Understand why you want a personal loan
What are your goals? Some lenders have limitations on how much money you can borrow at once, so before you start looking for a lender, figure out how much money you need by identifying what the loan will be used for.
Here are a few common reasons why people pursue low-interest rate personal loans!
Pay off your credit card bills
It’s not a bad idea to pay off a high-interest credit card balance with a low-interest personal loan. This strategy is called refinancing, also known as debt consolidation, and it can be a great way to lower your monthly payments, allowing you to get out of debt even faster.
Once you’ve taken care of your credit card bills courtesy of your personal loan, make sure you don’t find yourself in the same cycle of debt again. MoneyLion’s RoarMoney bank account offers in-app tracking to help you stay on top of your budget.
Tackle medical bills
Just like credit card bills, personal loans can be used to tackle medical bills, too. Not sure if you have access to all of your medical bills?
Contact your health insurance company or the hospital that issued the bills to you. This will help you ensure that you’re covering the bills that you need to pay.
Cover your moving expenses
Short and local moves usually aren’t very expensive. However, cross-country moves or relocating to a different state can add up very quickly.
Spend some time estimating how much money you’ll need for your upcoming move. Don’t forget to add in additional services like child care or pet care.
Create an emergency fund
Life is full of unexpected surprises, and not all of them farewell on your wallet. If you find yourself having to manage a large and unexpected expense, or if you have recently lost your job, a personal loan can ease the financial burden until you can increase your income.
While this strategy can help you get by, it’s always better to be prepared for the worst-case scenario. That’s why MoneyLion offers a Safety Net feature designed to help you prepare for an emergency ahead of time, saving you money and peace of mind when tragedies strike.
2. Find the lowest interest rate possible
You’ll have to pay interest to your bank, credit union, or online lender in exchange for your loan. This is also known as your annual percentage rate (APR). Your APR will tell you how much interest you need to pay on your loan each year.
For example, if you borrow $1,000 with a 36% APR, you’ll pay 36% or $360 in interest every year, which is about $30 per month. You don’t need to pay interest on the portions of your loan that you’ve already paid off. A higher APR can make paying back your loan much more difficult, so it’s important that you look for a low-APR lender.
Online lenders and credit unions usually offer lower rates than traditional banks. Also, watch out for high-interest loans like payday loans, credit cards, and cash advances.
When in doubt, consider taking out a low-interest personal loan from MoneyLion, which is also known as MoneyLion’s Credit Builder loan. This loan is designed to put extra cash in your pocket and build your credit score at the same time. You can also explore Instacash, which is MoneyLion’s very own 0% APR cash advance up to $250.
3. Retrieve your documentation and personal information
Before you take out a personal loan, you’ll need to provide your bank with more information about yourself. Here are some of the most common types of documentation and personal-identifying information that you may need.
Proof of ID
Every bank or online lender will require you to provide a valid form of identification before you can open an account or get a loan. Some valid forms of personal identification can include a driver’s license, a state-issued ID, a passport, or your military ID.
Other personal identification information
You’ll also need to provide your phone number, current address, and date of birth when you apply for a loan. If you’ve used a different name in the past, you will need to disclose this information as well.
Social Security Number
Your bank may require you to back up your identification by providing them with your full Social Security Number. You should always be hesitant when giving out your SSN, so make sure you trust the bank or lender that you are sharing that information with.
Proof of stable income
Personal loans are unsecured, meaning they aren’t backed by collateral. Your loan provider needs to know that you have the funds to pay back the money that you borrow. You might need to provide a few bank statements or W-2s before you can secure a loan.
The specific information that you’ll need to provide in order to secure a personal loan will depend on your bank. Talk to your bank before you apply for a loan to make sure that you’ve supplied them with all of the necessary information.
4. Apply for the loan
Every bank has its own process that you need to follow when you apply for a loan. Applying for a Credit Builder Plus loan from MoneyLion is simple and straightforward. Just follow these five steps!
Step 1: download the app
Go to Google Play or the Apple App Store and search for the MoneyLion app. Enter your phone number, input the verification code you receive via SMS, and follow the in-app steps to open a free account with MoneyLion. You’ll need to provide some personal information and upload a valid photo ID to open an account.
Step 2: become a MoneyLion member
To get a Credit Builder Plus loan from MoneyLion, you’ll need to become a member. But don’t worry! It’s a quick and easy process that you can complete through the app. You’ll need to provide some basic personal information, such as your name, phone number, and current address.
Step 3: navigate to the “Finances” tab
In the MoneyLion app, you’ll see a tab labeled “Finances” at the bottom of your screen. Click on the tab and then navigate to the Credit Builder Loan or Instacash section of the app.
Both options come with no credit check, so deciding which one to use is a personal preference. The Credit Builder loan will grant you up to $1,000 at a competitive APR whereas Instacash is a 0% APR cash advance that offers up to $250.
Step 4: wait for approval for the loan
The amount of time you’ll spend waiting for approval will depend on the entity that you applied for the loan from, so the waiting period can vary drastically. The entire process can take up to seven days if you apply for your loan through a traditional bank.
On the other hand, you might be approved in as little as a few minutes if you applied through an online lender or via a peer-to-peer lending service. Better yet, you’ll receive approval instantly if you apply for a loan through MoneyLion.
Step 5: pay back your personal loan
Before you officially sign for your loan, make sure you read through the terms and conditions in order to understand how to pay back the loan on time. Your bank or lending service will notify you of your APR, monthly payments, and loan amount.
After you sign for your loan, start thinking about when you’ll pay it back by and how you plan to pay it back. Most lenders accept wire transfers, personal checks, and cashier’s checks as valid forms of payment. If you get your loan through a physical bank, you may also be able to pay your loan back in cash. Banks don’t usually accept credit card payments on loans.
Find a personal loan that works for you
The right low-interest rate personal loan can provide you with the financial wiggle room that you desperately need. If you’re looking for a personal loan up to $1,000 or 0% APR cash advances, make sure you consider MoneyLion as your lender.
If you need even more money, MoneyLion can still help you out. By applying for with MoneyLion’s Credit Builder Plus loan, you can boost your credit score and prepare yourself to secure a larger loan from your bank.
Whether you need cash, low APRs, instant approvals, or a boost in your credit score, MoneyLion can help. Create your account with MoneyLion today and start working towards a better financial future!
Frequently Asked Questions
What is a good interest rate on a personal loan?
Even if you have perfect credit, it’s rare to find a personal loan with 0% APR unless you’re talking about MoneyLion’s Instacash. Otherwise, you can expect to see interest rates between 6% to 36% as these are considered typical interest rates for personal loans.
Can I get a personal loan with bad credit?
It’s hard to get a personal loan with bad credit but it’s not impossible. For instance, MoneyLion is a great option. Both MoneyLion’s Credit Builder Plus Program and Instacash feature don’t require credit checks.
How quickly can I get a loan?
A: It depends on your lender. If you’re seeking financing from a bank, the entire process can take weeks. However, online lenders like MoneyLion work much faster, meaning you could be approved instantly.