Are you looking for a cash loan in Detroit? Then you should consider the benefits of getting a personal loan. Detroit has many personal loan options available, but which one is right for you? This article is your guide for learning how to spot the best personal loans in Detroit that meet your needs and, most importantly, your budget. And if you think you need perfect credit to borrow money, think again. So buckle up, Detroit—we’re taking the fast lane to your personal loan solution!
Detroit: The Basics
Detroit is a major U.S city located in the state of Michigan. With a population of 4.3 million people, Detroit is the 14th largest city in America. It is a major port on the Detroit River and sits on the U.S/Canada border. The Ambassador Bridge that connects Detroit to Windsor is the busiest border crossing in North America and one of the most critical trade routes on the continent.
French colonists founded Detroit in the early 1700s as a fur trading post. After the French and Indian War, the settlement at Fort Detroit became a British territory. Detroit continued to evolve as a major center of commerce because of its proximity to the Great Lakes. It attracted immigrants from other countries and migrants from other states that exploded the city population in the 19th and 20th centuries.
Nicknamed “The Motor City,” Detroit has been at the center of the automobile industry since the Model T. The metro area remains the corporate home to giants like General Motors (GM), Ford, and Chrysler. Like many other industrial centers, Detroit also has a rich cultural tradition, particularly in the development of American music; it’s the home of the iconic Motown Records, the birthplace of techno music, and has definitive influences in rock, soul, and jazz music.
Detroit is a great place to work and live, but where can you get a loan with bad credit? Whether you’re in Detroit or any other part of the country, the key to a good loan is knowing what you need to look for.
Secured vs. Unsecured Loans
When you start your search, you may notice a significant difference in the variety of loans out there. Some loans are described as “secure,” while others are called “unsecured.” So, what’s the difference? The answer is collateral.
Collateral is a valuable asset that you would have to give a lender a loan guarantee. If you don’t repay the loan, the lender can take ownership of the collateral. The collateral’s value decreases the risk to the lender because they could recoup any money you don’t repay from selling the collateral. Meanwhile, the risk increases for the borrower; to keep the collateral, you have to honor the loan agreement.
Secured loans are loans that require collateral. Many people use secured loans for large purchases or expenses, like buying a house or getting a new car. The low risk of secured loans means that lenders can offer lower rates on interest and fees.
Secured Loan Examples:
- Car loan
- Title loan
- Pawnshop loan
Unsecured loans do not require collateral. Since the lender is at a higher risk, unsecured loans depend on a borrower’s repayment ability. They make their decision by reviewing a borrower’s creditworthiness, determined by different aspects of the borrower’s past behavior and current financial standing. Unsecured loans can have higher interest and fees than unsecured loans, so they work best for those short-term loan needs that many of us have from time to time.
Unsecured Loan Examples:
- Credit cards/Lines of credit
- Payday loans
- Personal loans
What Is a Personal Loan?
A personal loan is an unsecured loan that you can use for expenses as you see fit. A personal loan is disbursed in a lump sum but repaid in installments. These installments are monthly payments that last throughout the life of the loan.
Where Can I Get a Personal Installment Loan?
A personal installment loan is a solid financial fix for many different people. However, where you get your loan matters. In Detroit are provided through these three main types of lenders.
Banks can provide personal loans to their existing customers. There are some advantages to working with your bank, including low fees and easy management features. For example, an installment loan held at your bank can have fixed monthly payments drawn from a bank account. However, bank loans can require lots of paperwork and can take many days—or sometimes over a week—to get a decision.
What if your bank was “members only?” then essentially, you’re in a credit union. A credit union is a financial institution that provides the same services that you would find at a bank, like holding money accounts and offering personal loans. You may find loan rates and fees at a credit union that is competitive; as a nonprofit organization, a credit union is more concerned with serving members than making profits. But again, membership is required to reap its benefits.
Traditional lenders are known for long application processes that end in denial for many people who have a less than perfect financial past. On the other hand, private lending companies provide the most options for the widest range of borrowers. Additionally, these lending companies mainly operate online, with 24/7 access to applications and customer service. Some other significant benefits to working with a private lending company include:
Private lenders can set individual requirements for lending, and many of them lean towards a “less is more” approach to their applications. Private lending companies have personal loan applications with requirement lists as short as a valid ID, proof of income, and an active bank account. The less information you need to provide, the higher your chances of getting approved for personal loans with a private lender.
No Collateral, No Problem!
The collateral needed for secured loans is a barrier for many potential borrowers. Even if you desperately need a loan and have collateral, you may ask yourself, “Is this loan worth the risk of losing my property? Private lenders don’t require collateral for unsecured personal loans, so people can get a loan without having to worry about losing their valuable assets.
A Better Way To Handle Debt
Instead of personal loans, some people try to manage their credit cards to fill financial gaps. Depending on the credit card, you can quickly rack up purchases or cash advances that will only sink you further into debt. Instead of making minimum payments across one or more credit cards, borrowers can use personal loans to consolidate those balances and pay the debt down under steady interest rates.
Do I Need a Good Credit Score To Get a Personal Loan?
Even if you’ve never had a line of credit or personal loan, you probably know that when it comes to personal loan approvals, your credit score matters.
Where Your Credit Score Comes From
Your credit score comes from the data in your credit report. Credit reports contain information about your relationship with your creditors, past, and present. Potential lenders will use your credit report to determine approval or denial when you apply for certain loans.
Have you ever “had your credit run?” Then you have had a credit check performed on you. A credit check is what lenders do to look at your credit report and credit score. These are the three components of your credit report that influence your credit score the most:
Have you ever made a late payment on a bill? The chances are high that it’s on your payment history. Payment history is the most important part of your credit report. Lenders look at this record carefully because it can give them the most insight into your potential as a good borrower. If you pay your bills late or consistently miss payments, lenders believe your behavior will not change with a loan from them. Keep your payment history clean by paying your bills on time, every time.
Credit Utilization Ratio
Your credit utilization ratio is how you measure your credit card debt. A balance of $500 on a credit card with a $2,000 limit gives you a credit utilization of 25%. This ratio can show lenders how much debt you are currently in and provides insight into how quickly you pay it back. Maintaining your utilization at or below 30% will show good credit management while keeping the bulk of your credit line available at all times.
Credit History or Age of Credit
While payment history measures how often you pay on your debt, credit history measures how long you’ve had debt. Lenders are looking for borrowers with a proven record of repaying debt, and your credit age indicates experience. Instead of closing or canceling a credit card when you pay off the balance, preserve your credit history by not using it.
All loans are not created equal. And while there are many types of lending options to explore, it is critical to understand the difference between a payday loan and a personal loan. The two types of loans have wildly different terms that can make or break your lending experience.
Payday loans are short-term loans meant to be repaid by your next paycheck. As a stop-gap between pay periods, you usually have to repay in a lump sum in only a matter of weeks. If you don’t repay a payday loan by the due date, you can easily fall into the trap of making payments on a balance now hit with late fees and more interest. Across the country, payday loans create expensive, long-lasting problems for Americans already struggling with debt. For decades, payday loans have lured desperate lenders in with predatory tactics that promise fast cash with no need for a minimum credit score. However, the cycle of debt commonly created overshadows the short-term benefit of a payday loan. To avoid the headaches often associated with a payday loan, you should consider an online lender that can offer a safer, more affordable personal loan.
CreditNinja: Detroit’s Personal Loan Solution
Are you ready to ditch payday loans forever? Then CreditNinja has the personal loan you need! Every loan we provide is structured with these features:
Manage Your Loan Online
You don’t need to make time to go to the bank, credit union, or payday loan store to get cash loans with CreditNinja. Our lending experience is 100% online so that you can shop for personal loans with us anywhere, anytime.
No Prepayment Penalties
Some lending institutions can charge you a fee if you pay off your loan before it’s due. CreditNinja personal loans have no penalties for repayment. We’re here to help you end financial problems, so if you can pay early, do it!
Excellent Customer Service, Focused on You
Personal loans can be complicated, especially if you’re a first-time borrower. That’s why our Customer Care team is available to help you navigate the ins and outs of our lending process. And after loan approval, we’ll be there along every step of your lending journey.
CreditNinja’s online installment loans are here to get Motor City moving towards a better financial future. If you’re ready to get relief and avoid the hassle of payday loans, apply now, or contact us today for more information.