By CreditNinja
Modified on January 19, 2024

Dothan is the county seat of Houston County, located in the southeast part of Alabama. The county seat is a hub for retail and medical services, which pull in thousands of people within a 100-mile radius daily, including parts of Georgia and Florida.

Several major corporations have set up shop in Dothan, including: Commercial Jet Services LLC, Twitchell Technical Products LLC, Michelin North America Inc., International Paper, Cummings Resources LLC, Globe Motor Division, Wayne Farms LLC, Qualico Steel Co. Inc., Swedish Match Cigars Inc., and E&H Steel Corp.

Dothan’s population has grown by 3.8% from 65,774 in 2010 to 68,247 in 2019. Households in the city make an income of roughly $45,681, and the poverty rate is 19.1%. About 12% of residents under 65 years of age live with a disability in Dothan. In addition, 88% of residents under 65 years old have health insurance.

Approximately 59% of Dothan residents own a home, and each home has an average value of $146,800. Homeowners typically spend $1,131 every month (including mortgage) or $346 (without mortgage) for housing expenses. If you are renting, you can expect to pay about $735 for a home in Dothan.

In the course of paying rent, covering medical bills, buying household items, and managing other expenses, Dothan residents may need financial assistance from time to time. Personal loans with friendly terms may provide such help, especially when needed urgently.

What are Personal Loans?

A personal loan is a lump-sum amount of cash that you borrow from a bank, credit union, online lender or other financial institution. You pay the loan back in fixed monthly payments or installments.

The loan can be:

  • Secured (requiring an asset as collateral, such as a car)
  • Unsecured (no collateral required; hence, the loan is based on your credit worthiness)

Lenders determine loan approval and loan terms based on factors such as your debt-to-income ratio, credit score, and information found in your credit report. If you have an excellent credit score, you’re more likely to receive the lowest interest rates, but you can still get loan offers with a score of 600 or lower.

In case you don’t qualify for an unsecured loan, you may still have a chance of getting a secured or cosigner loan. A cosigner loan allows you to benefit from a credit score boost from the cosigner’s often-higher credit score. The cosigner vouches for you and offers to take on the debt if you are unable to continue to make payments.

When deciding whether to approve loan applications, lenders may also consider alternative data (anything that isn’t in your credit report). This includes bank account information, work history, and even your college major. Such data helps lenders better evaluate applicants by providing insights beyond what can be found in a credit report.

In compliance with the Truth in Lending Act, lenders are required to tell you about your loan’s annual percentage rate (APR) and other relevant details. The APR shows the true cost of the loan per year, including fees and interest rate.

Taking out a personal loan will involve a contract with an agreement that provides all critical terms of the loan, including:

  • The names and identifying characteristics of lender and borrower (e.g. an address and other contact information)
  • The amount borrowed
  • APR or interest rate agreement
  • Applicable payment terms (for example, $1,000 per month for 24 months)
  • How you as the borrower will make payment (cash, check, direct transfer etc.)
  • Payment authorization, if needed, such as an automated clearing house (ACH)
  • Rules on settling disputes between both parties
  • What the lender will do if you can’t pay (for example, late fees or collateral)
  • How you can negotiate a new payment plan
  • What happens if you repay the loan early

To better appreciate the impact of personal loans, here are some useful insights on the reach of such loans in the United States.

  • US citizens have $21.1 million in outstanding personal loans.
  • Borrowers with a 720+ credit score have an average APR of 7.25%, while those with a 600 score or less often have APRs over 100%.
  • There are 19.1 million consumers who have unsecured personal loans, compared to 176 million consumers with credit cards.
  • Personal installment loans make up less than 1% of the total US consumer debt.
  • Personal loan borrowers have an average loan debt of $8,402.
  • The average personal loan delinquency rate was 3.39% in Q4 2019.
  • In Q4 2018, the number of new loans increased by 9.7% year-over-year.

Benefits of Personal Loans

Personal loans offer multiple benefits that may help borrowers overcome financial difficulties. Such benefits include the following examples. 

  • Ease of access:

Online lenders have contributed to giving borrowers easy and convenient access to personal loans. In the past, you had to physically visit a bank and speak to bank representatives. Today, there are online platforms that help you complete the whole loan application process in minutes using a computer or smartphone.

  • Data-driven approach for customized loan offers:

Borrowers have benefited from the emergence of FinTech companies, non-traditional lenders that use a technological, data-driven financial services approach to deliver customized loans. Fintechs have contributed to the rise in popularity of personal loans and are fast becoming consumers’ preferred option. By Q4 2018, FinTech loans made up 38% of outstanding personal loan balances, compared to 5% just five years earlier.

  • Receiving a loan without collateral:

You don’t need to put up collateral for an unsecured personal loan. This also means you’re not at risk of losing your property if you default on your loan. Keep in mind, however, that  you can experience other consequences like credit penalties and lawsuits if you fail to pay your unsecured loan. 

  • A predictable repayment schedule:

Personal loans typically offer fixed interest rates and clear repayment terms. When a lender approves your loan application, you’ll receive precise details about how much you’ll repay each month, the number of monthly repayments, and the total cost over the life of your loan. This will help you plan for all future payments.

  • Long loan terms offer lower monthly payments:

You can receive personal loan terms lasting several years, which typically means lower monthly payments compared to shorter loan terms. This helps reduce the strain on your monthly budget, so you can more comfortably repay your loan.

  • Possibility of early payments without prepayment fees:

Some lenders allow early payment of personal loans without prepayment fees. With this option, you can clear your loan at a lower cost compared to making payments over the life of the loan.

  • Enhancing your credit mix:

Your “credit mix” (different types of credit like installment loans, credit cards, or financial accounts) makes up 10% of your credit score. Therefore, having a personal loan in addition to other forms of credit can potentially boost your credit score by adding to your credit mix.

  • Prompt loan payment can boost your credit score:

A track record of prompt payment of your loan can improve your credit history, which can potentially boost your credit score.

  • Long-term loans can improve your credit score:

One aspect of your credit score is the length of your credit history (average age of your credit accounts). It applies to currently active loans or lines of credit, starting from the date you open an account. Since a longer credit history is a positive indicator, dedicated payment of a long-term personal loan can positively impact your credit score over time.

Why Should You Choose CreditNinja?

CreditNinja offers convenient access to personal loans through our online platform. The application process is quite simple, requiring basic details of personal information, including:

  • Income and checking account details
  • Social security number and employment details
  • Credit history and payment history

Our basic eligibility requirements make the loans made or arranged by Credit Ninja accessible to many potential borrowers. Such requirements include:

  • Living in a state where we CreditNinja offers loan products
  • A minimum age of 19 years old residents for Alabama personal loans.
  • Having your own traditional bank account with a 60-day history
  • Receiving direct deposit paychecks in Alabama
  • Regular income deposits into your checking account.

Through CreditNinja’s dedication to fast service, you may get confirmation of your loan application approval within one business day.¹

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