Are you looking for financial help in Phoenix? Personal loans can manage a lot of money problems. And learning how to spot the right one for you just takes a little bit of knowledge. Luckily, we’ve got what you need to know right here. Let’s get started with the search for your phoenix personal loan!

Phoenix, AZ: The Basics

Phoenix is the capital and largest city in the U.S. State of Arizona. It sits in the south-central portion of the state, at the mouth of the Salt River. The Phoenix area is also known as “The Valley of the Sun”—a pretty cool name for a great place to work, live, and play! 

Phoenix was settled in the late 1860s in “Arizona Territory” as an agricultural community. It officially became a city in 1881 and the territory’s capital in 1889. Since then, the city has been an attractive place for Americans looking to resettle in a more affordable, warmer location. The city saw its biggest boom in the last half of the 20th century, growing from a town of 65,000 before World War II into the nation’s fifth-largest city, with a metropolitan area population of over 4.8 million people. 

The Phoenix economy grew from its agricultural roots into highly diversified areas. As a major vacation and retirement destination, real estate is the city’s most significant economic driver. Other major employers include the healthcare, education, and transportation industries. 

Personal Loans in Phoenix

If you live in Phoenix and need a loan, many options are available. But, how many of them are available to you? Whether you’re in Phoenix or any other part of the country, the availability and affordability of a personal loan aren’t the same for everyone. In short, your choices in loans largely depend on your relationship with money. We’ll get into that relationship stuff later in this article. But before that, let’s take a look into what you need to know to find the best personal loan for you. 

Personal Loans, Explained

Unlike a home mortgage or a car loan, you don’t need to use a personal loan for one specific purpose. You can get one or more personal loans to cover just about any of your bills or expenses. Common reasons for a personal loan include financing big purchases and consolidating or settling debt. 

A personal loan is an unsecured loan. Unsecured personal loans do not require you to put up any collateral—valuable assets like a car or home—to guarantee the loan. Instead, personal loan approval depends on creditworthiness. Creditworthiness largely depends on your past credit history and current financial behavior. 

After applying for a personal loan, getting approved, and signing a loan agreement, your lender will send the funds to your bank account. Over time, you repay the personal loan in equal monthly installments until you pay off the loan amount. Every personal loan is different, but every borrower should be on the lookout for these typical fees: 

Interest 

Interest is the direct cost the lender charges for giving a loan to you. It can be applied at a fixed or variable rate, depending on the type of loan you get. Most personal loans have fixed interest rates that allow your installments to remain the same over the life of the loan.

Origination Fees   

Origination fees cover the administrative costs that come with writing, approving, and processing your loan. Substantial loans that require multiple steps and professional assistance, like mortgages, usually have origination fees. You may not see origination fees included in a personal loan amount. Many lenders roll these kinds of administrative costs into your APR.  

Where Can I Get a Personal Loan?

In Arizona, personal loans are available from the typical financial institutions you can find anywhere. While they can provide easy access to personal loan products, traditional lending options contain roadblocks for some people. Let’s look at the two most common sources of traditional loans. 

Banks 

Banks provide personal loans at low-interest rates to their customers. They link their personal loans to customers’ other accounts and withdraw monthly payments electronically. Banks are good personal loan options, but they can be restrictive to potential borrowers with bad credit histories. Additionally, some banks may require a minimum balance in a bank account or that you make a certain amount of deposits each month.

Credit Unions 

A credit union is a financial institution that provides customers with the same services found in a bank. You pay for financial services at a bank, and the bank makes a profit. On the other hand, credit unions are non-profit organizations focused on serving their community of members. To that end, they tend to offer lower rates for managing money accounts (checking, savings) and providing personal loans. But, every credit union doesn’t necessarily serve the general public. Instead, they only serve particular groups of people, like those in professional affiliations or unions. Additionally, some large corporations own credit unions for their employees. Since credit unions are exclusive, their competitive rates on personal loans and other credit union services are only available to its members. 

Private Lending: A Solution for Everyone 

If you’re someone that can’t get a personal loan at a bank or a credit union, where can you go? For many underbanked people, private lenders have been the answer. Private lenders are companies that specialize in personal installment loans. But unlike a bank or credit union, they have drastically different requirements. On the whole, people who cannot get personal loans anywhere else have been able to find help -a private lender. But, many of these people also fall prey to one of the biggest lending headaches around. If you want to avoid them, keep reading. 

The Dangers of Payday Loans

Payday loans are high-risk, short-term, unsecured loans that fill the financial gap between one paycheck and the next. Although they appear as simple and easy as a personal loan, payday loans are expensive and difficult to pay off. The typical payday loan is due within only 1-2 weeks, while a personal loan gives people many months to repay. If you have ever had a payday loan (or worse, still attempting to repay one), these payday loan facts may sound familiar. 

Payday lenders have long been successful at using marketing and advertising sleight of hand to hide their actual costs. Their promises of fast cash advances with minimum requirements lure people who need money now. Sadly, these people are most likely to end up in a debt cycle where they’re paying hefty fees and rapidly compounding interest on top of their original loan. 

With the arrival of online private lenders, the need for payday loans has decreased across the country. Private lenders can offer service with the speed and availability of payday loans but can offer loan terms that allow easily manageable repayment. 

Does My Credit Score Matter?

When it comes to finding the best personal loan for your needs, you also have to consider your financial standing. The most common way lenders evaluate you for a loan is by looking at your credit score. It’s no secret that having good credit gives you an advantage in getting loans or lines of credit. But, many people don’t know the source of this all-too-important number.

Where Your Credit Score Comes From 

Your credit score is a rating of your ability to manage and repay debt. It’s a three-digit number based on the Fair Isaac Corporation (FICO) credit scoring model. That’s why you may have also heard credit scores referred to as “FICO scores.”    

Credit scores range from 300 to 850. The higher the number, the better your credit rating: 

300-579: Poor
580-669: Fair
670-739: Good
740-799: Very good
800-850: Excellent

Credit bureaus calculate credit scores. These data collection agencies use credit scoring algorithms to process the information found on your credit report—the record of your behavior as a consumer. Your credit report contains the following information: 

Payment History 

Any late or missed payments on any of your bills will become a part of your payment history. Payment history can clearly show a potential lender how often you don’t make on-time payments. As the most critical component of your credit score, improving your payment history can help you get a loan approved, even with bad credit. 

Credit Utilization

The amount of your available credit you’re using is your credit utilization. So if you have a $500 limit on a credit card, and your balance is $100, then your utilization is 20%. Your credit score can climb if you manage your credit card wisely and keep your credit utilization below 30%. 

Credit History 

Credit history is the length of time you’ve been managing debt. If your accounts are in good standing, a long credit history shows lenders your experience as a borrower. When paying for your accounts, try to keep a long credit history by paying off, but not closing, a credit card. 

New Credit 

When lenders “run your credit,” they request a look into your credit report at one or more of the credit bureaus. This action is also known as a hard inquiry. If you’re applying for a personal loan, multiple hard inquiries can signal financial distress and cause a lender to consider taking you on as a borrower. 

Credit Mix 

No, your credit mix is not some cool song based on your financial behavior (although that would be cool, right?!). Instead, it speaks to the variety of credit accounts that you have. A simple credit mix would be a mortgage and a credit card. Since they are both handled differently, they can lenders an idea of how responsible you are. But don’t sweat your credit mix too much; it’s the least considered factor of your credit report. 

Get To Know Your Credit

Did you know your credit score? If so, you’ve got a great tool to help you find a personal loan. If you don’t, it’s easy to get educated. America’s three major credit bureaus are Equifax, Experian, and TransUnion. Under federal law, each credit bureau must give you access to your credit report and credit score at no cost. 

Can I Get a Personal Installment Loan With Bad Credit? 

Your credit score can affect your choices for personal installment loans. On the whole, traditional lenders require strong credit scores to get personal loans from them. But that doesn’t mean that there are no solutions for people with less than perfect credit. Many private lenders offer loans based on your income and payment history, whether you need a short-term or long-term loan. In short, bad credit doesn’t have to stop you from getting the personal loan you need.  

CreditNinja Has Loans in Phoenix Ready for You!

If you need a financial fix in Phoenix, you can find a personal loan with CreditNinja! With every personal loan, we offer: 

  • Easy Application Process 
  • Clear Loan Terms 
  • A 100% Online Experience

CreditNinja Designs Personal Loans With You in Mind 

Online payday loans aren’t the only option you have for bad credit loans. If you’re in Phoenix or any other part of Arizona, CreditNinja can help you access some of the best personal loans available. Apply for a personal loan today, or feel free to contact us for more information

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¹Not all loan requests are approved. Approval and loan terms vary based on credit determination and state law. Applications approved before 10:30 a.m. CT Monday – Friday are generally funded the same business day. Applications approved after this time are generally funded the next business day. Some applications may require additional verification, in which case, the loan if approved, will be funded the business day after such additional verification is completed.