Obtaining a personal loan is an ideal way for individuals to access cash for debt consolidation, medical emergencies, large purchases, and more. Before applying for a personal loan, borrowers should know how and when they plan to pay back the borrowed funds.
Personal loans are forms of credit that typically have lower interest rates than credit cards. This type of loan can even be used to consolidate numerous credit card balances into one low-interest monthly payment. Personal loan repayment plans require fixed-amount installments over time until the loan has been paid in full.
If you are from Texas and have been thinking about obtaining a personal loan, here is an outline of the process you should take to do so:
The personal loan process in Texas
1. Do the math
Using a personal loan can be helpful in many situations, including funding major life events, paying off medical bills, consolidating debt, making necessary home repairs, covering moving costs and more.
Before applying for a personal loan, potential borrowers should have a clear idea of how much money they’ll need. Personal loans shouldn’t be viewed as an easy way to obtain free money, and borrowers should understand how long it will take to pay a loan back. Many lenders also charge loan origination fees, which will be directly deducted from the loan. Remember to take this into consideration when deciding on the total loan amount.
2. Check your credit score
Personal loan interest rates depend on an individual’s credit score and history. Texas Tech Credit Union offers personal loans at interest rates ranging from 6.99% to 17.99%*, based on credit score. Before you begin the personal loan application process, check your credit score. A higher score will secure a lower interest rate, while those with fair to poor credit may have to pay higher rates.
Adults can obtain three free credit reports each year from credit reporting agencies Experian, Equifax and TransUnion. When you obtain a credit report, check for any errors or mistakes that could negatively impact your overall score, and make sure to report any identified issues as quickly as possible.
If you don’t need an immediate loan and have a less-than-desirable credit score, take some time to improve it. Making payments on time, establishing a budget and paying down credit card balances are just a few ways you can boost your credit score.
3. Explore all available options
Before applying for a personal loan in Texas, make sure to look into a variety of financial service providers. Many banks won’t give loans to individuals with poor credit scores, and others may attach extremely high-interest rates to these loans. Credit unions typically offer personal loans with lower interest rates. Because this type of financial organization is not-for-profit and owned by its members, it can provide better interest rates and more flexible loan terms.
Avoid making a decision too quickly. Take the time to compare different interest rates and repayment plans. Long-time banking customers or credit union members will often have access to better interest rates, even if they have made a few financial mistakes.
Once you’ve chosen the best financial institution for your situation, it’s time to start the application process.
4. Apply for a personal loan
The application process for a personal loan in Texas will vary from one financial services provider to another. Applications can be filled out online or in-person at a bank or credit union, and a borrower will have to provide their full name, income, employment information, home address, credit score, payment history, contact information, desired loan amount, and their reason for the loan.
Before you receive the personal loan, make sure to review its terms and conditions, interest rate, and repayment plan. This may seem tedious, but reading the fine print can help you avoid unexpected charges or hidden fees.
Once you’ve finalized the personal loan documents and agreed to the loan terms, you’ll likely receive your funds within a week. Be sure to make all payments on time to avoid additional charges and consider putting more money toward each monthly payment if you can.
Get a personal loan today!
A personal loan can be a convenient way to access cash for important life events, medical emergencies, major purchases, and more. Ready to get started obtaining a personal loan? Click here to learn more about the personal loan options available at Texas Tech Credit Union.
*Rates as of Jul 13, 2021, 9:00:00 AM