How to get a Consumer Loan

A consumer loan is one that is generally obtained for personal use other than purchasing a home or an automobile. These types of loans have become almost nonexistent in tough economic times, but they do still exist. They are basically loans that are made based on a person's integrity and credit rating and generally involve no collateral. Consumer loans occur most often when an individual has had a long standing relationship with an institution, and has made multiple loans that have always been paid in full and on time.

Search for a Lender

Searching for a lender who is willing to do a consumer loan may take some time. Start with your own bank or credit union. As was previously mentioned, these are people that you deal with on a day-to-day basis, and you are more likely to get your loan from them.

  • If you belong to a credit union, or if you can join one, your chances of getting a better rate grow significantly.
  • The bank that you deal with on a regular basis will likely be able to offer you a good deal as well. The rates may not be as good as you could get from a credit union perhaps, but they are still more likely to give you a consumer loan at a good rate than a bank that you have no accounts with.
  • Finance companies may approve you for a consumer loan. Note that these lenders typically charge a little more for the use of their money as it's their only business.

Do Your Due Diligence

Sometimes when people are looking for consumer loans, it is because some sort of an emergency has arisen. This isn't always the case to be sure, but it's the usual reason. Be careful and do not sign on the dotted line simply because you need money in a hurry.

Always make sure to read the fine print carefully. Sometimes documents are signed in hurry and the borrower finds him or herself in worse shape after they obtained the consumer loan than they were before they got it.

When times are rough people tend to get to feeling desperate and that's when unscrupulous lenders offer you a consumer loan with unreasonable terms. Don't let that happen!

Follow These Simple Steps

Keeping yourself from becoming a victim is a very easy task to take on. This is thanks in large part to technology. If you find yourself having to look online because you cannot find a local lender then try these steps:

  • Is it possible to borrow money from a family member? Even if you paid them back with interest, it's still much better than taking a chance with a lender who might be charging exorbitant rates.
  • If you absolutely must use a lender that you don't know, check them out thoroughly. Call the Better Business Bureau, or visit them online at www.bbb.org and you can check to see if there have been any problems with them.
  • Ask around. Check licensure and don't be afraid to ask questions. After all, in the end it's you that has to repay the loan and no one will watch out for you except you!

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