If you need to cover an unexpected expense, personal loan apps can help get you the money you need. (Shutterstock) If you need to pay for a large purchase, consolidate debt, or cover an unexpected emergency, you might be considering a personal loan. Many personal loan lenders have personal loan apps, which make it easy to borrow money online without ever visiting a bank. While personal loan apps are a convenient way to apply for a loan, they’re not suitable for everyone. Keep reading to learn more about personal loan apps and how they work, where to find them, and some alternatives to consider. You can also use Credible to compare personal loan rates from multiple lenders, all in one place. A personal loan app is a mobile tool that allows you to apply for a loan online without the hassle of going to a traditional bank. Some apps streamline the loan process, and you can apply for a loan and manage it entirely within the mobile app. With other apps, you may need to utilize the lender’s website on a desktop computer to apply for a loan. In addition to personal loan apps offered by banks, you can also access apps from online lenders and loan marketplaces. These apps typically work the same as their website counterparts. You’ll download the personal loan app, review your options, and apply for a personal loan. Once you’re approved for a personal loan, you can make payments and manage your account through your mobile loan app. Applying for a loan typically involves plugging in some personal and financial information into the loan application form. You’ll need to submit your name and contact information, along with your Social Security number, annual salary, and your desired loan amount. The interest rate and repayment terms you’re offered are based on your credit score, with higher credit scores typically yielding lower interest rate offers. Most online lenders, traditional banks, and credit unions offer personal loans through their mobile apps. You can download these loan apps from the App Store for iOS devices and the Google Play store for Android phones. It helps to know what you’re looking for on these platforms. You’ll find an abundance of payday loan apps or cash advance apps, which are quite different from personal loan apps. Look for the app from your bank or preferred lender or consider Credible partners with personal loan apps, such as LightStream, Prosper, and SoFi. You can compare personal loan rates on Credible without affecting your credit score. You can also use Credible to apply for a personal loan if you don’t want to download a personal loan app to your phone. Many personal loan apps ask you specific questions about how much you want to borrow and how you plan to use the loan. Once you plug in your information, the app will provide loan recommendations based on your answers, and you can then choose whether or not you want to continue with a lender. Different loan apps have different features for you to consider. Here are some things to look for as you’re evaluating which personal loan app is right for you: Personal loan apps need to link to your bank account so they can fund the loan. But some loan apps aren’t compatible with all banks and credit unions. Don’t give out personal or banking information on any app that isn’t compatible with your bank. If you’re unsure whether an app works with your financial institution, ask a customer service representative from your bank whether they partner with the app. Personal loan eligibility requirements can vary from lender to lender. For example, lenders could require a credit check or minimum direct deposit payments to your checking account from your employer. Consider what information you’re comfortable sharing before you start using a personal loan app. Loan amounts are an essential consideration when choosing a personal loan app. For example, Best Egg offers personal loan amounts between $2,000 and $50,000, while SoFi provides loans of up to $100,000. It’s important to only borrow what you need so that you won’t be stuck paying interest on a larger amount. Funding your loan is one thing, but how much will the loan cost you in interest and fees? If your credit is good, lenders may offer you competitive interest rates. On the other hand, you could be looking at high rates and fees if your credit is less than ideal. Some lenders charge origination fees for processing a loan, and others may charge a prepayment penalty for paying off your loan early. Make sure you understand any fees before moving forward with your loan application. The time to fund your loan varies depending on the lender, as well as how quickly your bank processes the transaction. Some lenders offer to deposit your money directly into your bank account by the next business day. LightStream says it can provide funding as soon as the same business day, while SoFi can take up to three business days to fund your loan. Before you apply for a loan through a mobile app, website, or even in person, make sure your lender can fund your loan in a time frame that works for you. As with any financial product, it’s wise to weigh the pros and cons of personal loan apps before you begin using one. If you look for personal loan apps in the Google Play store or the App Store, you’re likely to come across apps for payday loans or cash advances. While both personal loans and payday loans can provide you with the money you need quickly, you must be aware of some key differences between the two loan types. Payday loans often appeal to borrowers who may not be eligible for traditional personal loans. That’s because many payday lenders make it easy to borrow money without a credit check and, in some cases, without a bank account, as long as you have a prepaid card account. Personal loans are generally the better option because payday loans usually come with fees that equate to significantly higher interest rates — sometimes as high as 400%. On top of that, most payday loans are due in full on your next payday. If not, additional fees will be tacked on to the loan balance. These terms can make it nearly impossible to repay a payday loan, and it’s easy for borrowers to get trapped in a cycle of debt. By contrast, the average interest rate for a personal loan is 9.09% for a 24-month loan, according to the Federal Reserve. You also have much longer to repay the debt — traditional personal loan terms typically range from one year to 10 years. Additionally, many payday lenders typically don’t report your on-time payments to the major credit-reporting agencies like their personal loan counterparts. So, if you’re looking to build a strong payment history to improve your credit profile, a personal loan is the better option. Credible lets you easily compare personal loan rates from various lenders in minutes. If you believe personal loan apps aren’t for you, consider these alternatives: Source: Read Full ArticleWhat are personal loan apps and how do they work?
Where can you find a personal loan app?
What to look for in a personal loan app
Compatibility with your bank
Eligibility requirements
How much you can borrow
Interest and fees
Funding time
Pros and cons of personal loan apps
Pros of personal loan apps
Cons of personal loan apps
Personal loan apps vs. payday loans
Alternatives to personal loan apps