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7 Steps to Getting a Personal Loan With Bad Credit



Many lenders require borrowers to meet certain credit score requirements for a personal loan. For example, to qualify for a loan at the most competitive rate, you’ll typically need a credit score of 740 or higher.

There are, however, many people who don’t have perfect credit but who still need to borrow money. If you’re one of them, you do have some options available. If you follow these seven steps, you should be able to find the right loan for you.

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1. Try to improve your credit first

If you don’t need a personal loan immediately, you can try to work on building credit before applying for one.

There are special types of personal loans, such as credit-builder loans, that almost anyone can qualify for. These types of personal loans help improve your credit score. They allow you to borrow up to a certain amount, such as $1,000 — but the catch is, you make your payments first, before you get access to the money. Your on-time payments are reported to the credit reporting agencies so you improve your score.

Some other things you can do to improve your credit include:

Of course, none of these approaches will work when you need to borrow now.

2. Find a cosigner

Another great option for getting a personal loan with bad credit is to ask someone to cosign for you.

If you have a family member or friend with good credit, they may be willing to agree to vouch for you with the lender. While this would make them legally responsible for payment along with you, it also makes it much easier for you to get loan approval since the lender considers their credit as well as your own.

Often, a cosigner can help you get a personal loan with a good interest rate from a lender of your choosing.

3. Explore borrowing alternatives

If you can’t find a cosigner, make sure that a personal loan is the best way to borrow.

You can consider other options, such as a 0% APR credit card. If you can qualify for one, you may be able to pay no interest for an introductory period of time. And sometimes qualifying for a credit card can be easier than getting a personal loan.

Just be aware that credit card interest is very expensive if you don’t qualify for a special promotional rate, so this may not always be the best approach.

4. Reach out to lending institutions you do business with

If you definitely want a personal loan, you may want to try reaching out to a bank or credit union you’re already doing business with. If you have an established relationship with them, they may be more willing to overlook your imperfect credit and give you a loan.

5. Research lenders offering bad credit loans

There are actually many bad credit personal loan lenders that specifically cater to borrowers with imperfect credit.

While the interest rate on these loans may be a little higher than for borrowers with good credit, it’s still often possible to get a loan with reasonable terms when you need to borrow. Just research the options available to find a lender and submit a request for pre-approval to find out if you’re likely to get the loan you need at a decent rate.

6. Ask for an in-person interview

If you’re denied a loan due to your credit score, see if you can ask the loan officer to meet with you. You may be able to convince them that your past credit mistakes were the result of a situation that was out of your control and that has since been resolved.

This won’t always work as sometimes lenders have strict guidelines they can’t deviate from. But it’s worth a try, especially if lenders do manual underwriting or if you have a good excuse for bad credit, such as an aversion to debt, which has prevented you from building a credit history.

7. Research loan terms carefully

Finally, if you are approved, make sure you carefully research and understand the personal loan repayment terms. You’ll want to be certain the interest rate is reasonable, the payments are affordable, and the fees are minimal.

The good news is, if you follow these seven steps, you should hopefully have no problem finding a loan that’s right for you.

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Are Sallie Mae Student Loans Federal or Private?



When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances



Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit



Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.



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