Almost everyone needs help from time to time, but what if that help is more than just a few hundred dollars, and more like a $1500 loan?
Need $1500 but not sure where to begin? The good news is that there are options available, even if you need the funds quickly. Once you get the loan you need, you can take steps like creating a savings fund to prepare yourself for future emergencies. Keep reading for various options to get the loan you need.
What Are the Basic Qualifications Lenders Look For?
Suppose you haven’t taken out a loan before or need a refresher. In that case, there are a few qualifications (including an active bank account) that lenders will ask about:
1. Your Income
For most people, their income is from a day job. However, alternative sources of income such as SSI, contract work, and part-time work are just a few examples to provide when fulfilling an income requirement. Lenders will need to ensure that you have sufficient income to make your loan payments.
2. Ability To Make Each Monthly Payment
In addition to income, lenders will inquire about major monthly expenses such as your rent/mortgage payment and other bills. This will give them a better idea of how much you can afford.
3. Your Creditworthiness
Lastly, your credit score and credit history will determine the type of loan options and lenders available to you. Some lenders may be open to lending to borrowers with poor credit histories, while others may not.
Below are some loan options you can consider depending on what your credit score looks like. Learn more about credit scores and their rankings to choose the category you fall in.
Loan Options When You Have a Fair Credit Score
The great thing about having fair credit is that you will have more loan options to choose from, which not all applicants will get. Additionally, a good credit score means you will get better loan terms (more on that below).
Here are some loan options that work well for a $1500 expense and are available for good credit scores:
Personal loans are some of the most used loan options available. With fair to excellent credit, you will find a variety of personal loan options to consider. A bank, credit union, or a private lender are all financial institutions that offer personal loans.
Personal loans can be used for all kinds of expenses. Compared to more complicated loans, the loan application process can be reasonably quick. Once approved, the funds can be sent straight to your bank account.
Credit cards can be another option to borrow money, if you have good credit. If you don’t already have a credit card for use, check out credit card offers with introductory zero or low interest rates.
Some people opt to withdraw money through their credit card. This is referred to as a credit card cash advance. The interest rates are sometimes higher than normal credit card purchases. Plus, there is no grace period on the interest, meaning it will begin to accrue immediately.
$1500 Loans if You Have Bad a Credit Score
Even if you have less than perfect credit history, there are loan options you can look into. Here are a handful of them:
Bad Credit Personal Loans
Some lenders focus on personal loan options for bad credit borrowers. A personal loan for bad credit history can be a secured or unsecured loan option (secured loans involve collateral, while unsecured do not).
A payday loan is a short-term loan that is meant to be paid back by your next payday, hence the name. These loans may seem like an excellent way to get the funds you need, especially if you need them quickly. However, payday loans can be expensive, and to repay the loan you will be required to pay a lot of interest.
With payday loans, you can get your short-term financial needs taken care of, but you may find yourself in a cycle of debt. And so, avoid payday lenders if possible!
Car Title Loans
Car title loans (also referred to as title loans or auto title loans) are secured loans that use the borrower’s vehicle as collateral. If you face an emergency and have bad credit, title loans can help. However, they can be more expensive than necessary, just like payday loans. Consequently, you may find it challenging to repay the loan even with on-time monthly payments.
Considering Other Loan Options for $1500
Depending on your financial needs, some loan options can work better than those mentioned above:
Student loans can be used to fund any postsecondary educational expenses, including tuition, housing, books, transportation, and more. For federally funded student loan options, you won’t have to worry about your credit score or adding a cosigner for approval.
If you need funds for a business or commercial purpose, a business loan can help cover those costs. When your business’s credit is not involved with your personal credit, you do not need to worry about improving credit to qualify.
Borrowing From Friends or Family
Another option you could consider, if possible, is to borrow the funds from friends or family members. Although this option can be a little uncomfortable, there is usually no interest involved, and repayment can be flexible.
Borrowing From Yourself
Some people have saved money in their retirement account. Although not recommended for non-emergency situations, you can borrow from those accounts for necessary expenses.
If you are taking out a loan for a purchase, consider in-store financing. You may find flexible eligibility and unique offers on your specific item. Keep in mind, you may need to provide a down payment for eligibility.
How Do I Know Which Loan Option Is the Best Deal?
It may be challenging to find the best option with all the different loan providers out there—both online and storefront lenders. However, looking at all the other factors rather than just interest rates will give you an accurate repayment picture.
Here are all the variables you need to consider when determining the most favorable loan terms:
1. The Monthly Payments
The monthly payment is an essential part of a loan; it will encompass both the principal and interest. The ideal monthly payment should be affordable while not drawing out the loan period longer than necessary.
2. The Overall Interest Rate
When you get a loan agreement, the interest rate will be presented as APR (annual percentage rate) and sometimes in MPR (monthly interest rate). Depending on your loan, there could be additional interest variables to keep in mind. Still, APR will provide you with a good look at an overall cost. Finding competitive interest rates should be a top priority with loans.
3. Fees and Other Costs
Origination fees, balloon payments, fees for paying off the loan early, overdraft fees (for revolving credit accounts), etc., can increase loan costs but may not be apparent upfront. And so, it is essential to consider all of these costs that may be classified as finance charges.
4. The Loan Amount
In this case, you are probably looking for a $1,500 dollar loan amount. When searching for the right loan option, ensure it covers the entire cost; having one loan is often more manageable than having multiple.
5. Filtering Through Financial Institutions
Choosing the right lender is also crucial for picking the right loan. Whether you are applying with online lenders, banks, or credit unions, make sure you do research on customer experiences, and legitimacy, etc.
Once you have loan approval, you can consider all of these variables before you make a final decision. Although it may seem like a lot to think about, it is pretty simple to run through these numbers and costs, as long as you know what you are looking for in a loan agreement. And keep in mind that just because you go through a loan application and loan approval, you never have to move forward if it’s not the right fit for you!
Knowing Your Rights as A Borrower
Knowing your rights when borrowing any loan amount is vital for making an informed lending decision. The Consumer Financial Protection Bureau is a great place to start your research if you want to learn more about the different active laws and regulations. For military members and their families, knowing the policies of the Military Lending Act can be a tremendous tool.
A few protections various agencies and laws have in place include:
- Caps on annual percentage rates
- Rollover limitations
- Equal lending policies
The Importance of Building a Savings Account
Having a savings account can save you during financial emergencies.
But if you don’t have savings in place, it may be a good idea to think about starting a solid savings account. Having a savings account with at least 3 months of expenses can be a great way to prepare for future emergencies, help maintain a positive credit score, improve bad credit, and provide a foundation to begin building financial stability.
Consider Whether a $1500 Loan Option is Right for You
Loans are best used for short-term emergencies or particular purchases. Before choosing a loan option to cover your costs, learn more about good credit vs. bad credit. Taking out a loan for the right expenses can positively impact your credit score and net worth, while doing the opposite can be damaging.
Consider assistance programs when facing a long-term financial emergency such as a job loss, medical debt, etc. There are all kinds of government and public assistance services for different situations.
And so, if you are getting your $1500 loan for the right reasons, the loan proceeds can definitely help. And the good news is that you can get a loan with bad credit or no credit history at all.