Loans come in all shapes and sizes, and by that, we mean different rates of interest and different payment terms. Naturally, everyone has a different risk appetite, but what happens when your credit scores don’t meet your desired loan requirements? Comparing different loan packages and asking someone can be a good starting point. In any case, here are some guidelines that should help you determine whether you got a good loan or not…. Or these guidelines can help you secure an adequate loan.
Borrowers with high credit scores
Customers in this tier can qualify for a personal or business loan from various institutions including a bank, credit union, or an online lender. In this case, they’ll often run a hard credit check and offer packages that include high loan amounts, with low rates and fees. You’ll typically be looking for:
- Around 2.99% to 4.99% APR
- Generous Loan Amounts ranging from $5,000 to $100,000
- Minimum Credit Scores of around 700
- Low Approval Times/Low times to funding
Borrowers with good credit
You can still be a recipient of decent credit lines in this tier, often requiring a credit score in the range of 600 to 699. This is adequate enough to secure a loan to help grow a business or sustain a personal operation. Here are some of the guidelines to help you decide if you’re receiving right loan terms for your bracket:
- APR ranging from 5.99% to 15%
- Loan amount from $1,000 to $40,000
- Minimum Credit Score of 600
- Low Time to funding, around 7 days
Borrowers with low credit
This tier often calls for credit consolidation debt. All lenders will let you borrow money to consolidate your debts. Payoffs are how these companies really assist their clients. If this is in your range, you should be seeking a credit consolidation lender. However, be weary that these type of loans should only be done as a method to get out of debt!
- APR from around 8% to 25% fixed
- Loan Amount from $5,000 to $35,000
- Loan Terms from 2 to 5 years
- Minimum Credit Score of 660
- Payoff fees of 2% to 5% of the total loan amount.