Here’s How Borrowers With High Credit Scores Use Personal Loans

personal loan It provides a flexible way for people to borrow money to pay various expenses.even if you have low credit scorethere may be lenders out there who can meet your financial needs and help you get the funds you’re looking for.

a Survey with LendingTree We have collected data on how borrowers have high credit score Based on personal loan closing data from April 2021 to March 2022, lower credit scores tend to use money from personal loans.

According to the study, high-scoring borrowers (with a credit score of 720 or higher) took out an average of $18,443 in personal loans, 122.2% higher than the average borrower with a credit score of less than 720 borrowed $8,301.

Not only does it reveal Borrowers with higher credit scores take out larger personal loansthe survey also showed how they spend their personal loan funds. More than a third of high-scoring borrowers use Personal loan to consolidate debt. And the next big use is credit card debt refinancingHere are the survey results for high-scoring borrowers:

  • 39.7% take out personal loans for debt consolidation
  • 15.8% used funds to refinance credit cards
  • Money borrowed for 12.8% home remodel
  • 7.6% used a personal loan to make a major purchase
  • 2.8% paid for financing or repairing their own car
  • 1.9% payment Medical bills
  • 1.5% use funds to move or pay for business
  • 1% paid wedding or vacation

It’s no surprise that borrowers are taking advantage of their high credit scores to consolidate their debts. debt consolidation Often at lower interest rates, it allows borrowers to pay off multiple debts with new loans, and the higher their credit score, the more likely they are to secure that new lower interest rate. Consolidating debt is a good way to streamline your finances. This means that you only have to account for one monthly payment as opposed to multiple monthly payments from separate lenders. According to LendingTree research, high-scoring borrowers: debt consolidation I took out a personal loan averaging $19,991.

Even among low-scoring borrowers, debt consolidation was the top reason for taking a personal loan. Below are the survey results for low-scoring borrowers.

  • 37.7% used personal loans for debt consolidation
  • 5.7% invest in home improvement
  • Medical expenses 3.6% burden
  • 3.5% used the funds to buy or repair their own car
  • 3.3% goes towards moving costs

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Best personal loans for people with high credit scores

The higher your credit score, the more likely you are to receive favorable interest rates on your personal loans. In other words, the lower the interest rate, the lower your monthly payments.

You can usually qualify for the best personal loans. “Excellent” Credit Score (over 800).choose your pick light stream As Best overall personal loan lender for those with excellent credit. Because the interest rates are low, there are no fees, and the terms are flexible. You can get a personal loan through LightStream for almost anything except higher education. small businessThe only downside is that LightStream’s minimum loan amount is $5,000, which is steep.

lightstream personal loan

  • Annual rate (APR)

    5.99% to 21.49%* when you sign up for automatic payments

  • Purpose of the loan

    Debt consolidation, renovation, car loan, medical expenses, marriage, etc.

  • loan amount

  • Clause

  • need credit

  • Outgoing fee

  • Early Payoff Penalty

  • late fee

May be a better option for those who need to borrow small amounts of money penfedLoan amounts start as low as $600 and Term of office: 1 to 5 yearsYou don’t have to be a PenFed member to apply, but you must sign up for membership and have at least $5 in an eligible savings account to receive funds.

PenFed Personal Loan

  • Annual Rate (APR)

  • Purpose of the loan

    Debt consolidation, renovation, medical expenses, auto loans, etc.

  • loan amount

  • Clause

  • need credit

  • Outgoing fee

  • Early Payoff Penalty

  • late fee

You don’t need a high credit score to get a personal loan

There are many personal loan lenders for different situations and financial needs. Low credit score around 580 Also 600 marksand those with no credit history at all.

start-up,for example, Poor credit historythe company also considers anyone with a credit score of at least 600. Another personal loan lender, Happy Money, has a minimum credit score requirement of 550 for personal loans, so borrowers with low credit scores have several options.

new personal loan

  • Annual Rate (APR)

  • Purpose of the loan

    Debt consolidation, credit card refinancing, marriage, moving, healthcare

  • loan amount

  • Clause

  • need credit

    FICO or Vantage score of 600 (but applicants with poor credit history and no credit score will be accepted)

  • Outgoing fee

    0% to 8% of the target amount

  • Early Payoff Penalty

  • late fee

    5% of monthly delinquency amount or $15, whichever is greater

happy money

  • Annual rate (APR)

  • Purpose of the loan

    Debt consolidation/refinancing

  • loan amount

  • Clause

  • need credit

  • Outgoing fee

    0% to 5% (based on credit score and application)

  • Early Payoff Penalty

  • late fee

    5% of your monthly payment or $15, whichever is greater (with a 15-day grace period)

how to lower interest rates

If you want to take advantage of low interest rates on personal loans, you need to improve your credit score.

pay bills on time is the most important thing you can do to improve your score. Your payment history actually accounts for 35% of your score. FICO® ScoreIt is therefore very important in determining the creditworthiness of an individual.

File an application with a joint applicant higher credit score It can also help you get approval for lower interest rates and help you get approvals that you might otherwise not have considered. That’s because it’s common for lenders to analyze your credit history. Debt-to-income ratio and other credentials during the process of determining loan size, interest rate, and length of loan term.

have a co-applicant Useful if you don’t have enough credit history to get low interest rate approval. It is also useful if you need to withdraw a large amount of money but do not have a steady income. Not all personal loan lenders allow co-applicants, so you’ll need to do some research to find co-applicants.

Sophie A solid option to have co-applicants. SoFi allows him to apply up to $100,000, making it a great option for those who need to borrow a lot of money.

SoFi Personal Loan

  • Annual rate (APR)

    7.99% to 23.43% when you sign up for automatic payments

  • Purpose of the loan

    Debt consolidation/refinancing, renovation, moving support, medical expenses

  • loan amount

  • Clause

  • need credit

  • Outgoing fee

  • Early Payoff Penalty

  • late fee

Personal loans can be a very flexible financing option when you need cash in a pinch, but researching your options before applying and doing due diligence to improve your credit score can actually help. may be rewarded for

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Editor’s Note: The opinions, analyses, reviews or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, approved or otherwise endorsed by any third party.

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