Personal loans can be used for almost any purpose. They are one of the most flexible ways to borrow money and help build credit!
Whether it’s cash for a special occasion, like a wedding or family vacation, funds for tuition, money for home improvements, or consolidating debt, you can apply for the cash you need with us at Baton Rouge Telco.
How Hard Is It to Qualify for a Personal Loan?
Personal loans generally aren’t hard to get and are available from credit unions, banks, and online lenders. We offer a variety of personal loans to consider, depending on how quickly you need funds and the amount you need to borrow.
No matter which type of personal loan you choose, you’ll want to start by comparing interest rates and loan terms.
Know Your Credit History
Your credit score and history will help determine if you qualify for a personal loan. Generally, the higher the credit score, the more likely you are to get a lower interest rate. The average score falls into these categories:
- 690-719: Good credit
- 630-689: Fair or Average credit
If you’re looking to rebuild your credit or don’t have much history at all, our Solutions Loan requires no minimum credit score — as long as your credit report shows no open bankruptcy or foreclosure.
Don’t forget to fix any errors that might be dragging down your score. You can request your free credit report and dispute wrongly reported missed payments or any other inaccuracies it may contain.
Cover Your Current Debt
To satisfy a personal loan requirement, make sure you can cover your current debt. Lenders will look at your debt-to-income ratio (DTI), which compares your gross monthly income to the monthly payments you make toward your outstanding debt. They will want to determine if you can take on additional debt and maintain the payments.
Since your DTI ratio doesn’t have varied monthly expenses, you may consider budgeting beyond what your DTI labels as “affordable” for you. As a general rule, aiming below the 36% back-end target is ideal — meaning, your total monthly debts divided by your gross monthly income should be less than or equal to that percentage.
For example, if you have $1,000 of monthly debt and make $3,500 a month, then your back-end debt-to-income percentage would be 28%, which is well below the recommended 36%.
Proof of Income
Like most personal loan requirements, “proof of income” can mean different things for different lenders. Confirm what documentation you need before applying. Some lenders may require a signed letter from your employer, while some will need pay stubs or W2s. If you’re self-employed, this could mean you’ll need to submit a copy of your tax returns.
Remember, it’s best to have a secure and stable income before considering a personal loan. Determine the specific loan amount you need and avoid borrowing more than that. A larger loan amount will result in more interest charges and higher monthly payments, which could strain your budget.
Adding a Co-Borrower
If you don’t qualify alone, you may want to consider a co-borrower. Your co-borrower agrees to pay the loan if you are unable to at any point in the life of the loan. This is viewed as an extra layer of security and may improve your chances of qualifying for a personal loan.
But the reverse of this is also true — both names on the loan also mean the credit history of you and your co-borrower are taken into account for approval. Your co-borrower might see a decrease in their credit score if you ever miss a payment.
Qualify for a Personal Loan With Baton Rouge Telco
If you’re still on the fence about whether a personal loan is right for you, we invite you to learn more about personal lending options with Baton Rouge Telco. Our Solutions Loan is a fast lending alternative when cash gets tight. We offer our members flexible loans at highly competitive rates. Click below to learn more!