Tips for Securing a Personal loan for Unexpected Expenses

Facing an unplanned or emergency expense is never easy, especially when you don’t have enough in your bank account to cover it. When situations like this arise, it’s only natural to feel overwhelmed and unsure about your next steps.

Before you resort to credit cards, one option can help you quickly cover an emergency expense in a more financially manageable way: a personal loan. With fast funding and lower rates when compared to most credit cards, obtaining a personal loan is often the ideal choice for quickly handling a sudden expense.

But before you start applying, we recommend taking the following steps to ensure that your loan application process is both effective and seamless.

1) Get Organized

Would you apply for a new job without having your current resume ready? We hope not! The same concept applies to your loan application—you’ll want to be sure that you have all of your necessary documents in order before starting the application process. 

Having this information prepared and organized ahead of time can help alleviate any potential processing delays. While the specifics of what may be requested can vary amongst lenders, it’s generally useful to keep your current financial records on hand including pay stubs, W-2s, and recent tax returns. 

2) Explore Your Options

Before you rush to apply, be sure to take the time to explore your personal loan options. Make it a point to search for credible online loan providers by reading their reviews and accreditations before applying. For more information, check out our article on signs an online personal lender is not legitimate. 

Why choose an online loan provider over a brick-and-mortar financial institution? Most online applications take just minutes to complete, and approved applicants often receive their funds in as little as one business day. This is an ideal timeline when you need a loan fast!

Plus, you can rest assured that an online company specializing in personal loans, like Credit Direct, will have highly knowledgeable representatives working to answer all your questions and guide you to the loan that best suits your needs. Compared to a more traditional financial institution that covers many different financial products and services, you may not get the same level of specialized care and attention.

3) Know the Process

A key component when applying for a loan is knowing whether or not you’ll be approved. Prequalifying for a personal loan allows you to better understand the amount of money you may qualify for and at what interest rate you’ll be able to borrow. Knowing this information upfront will not only save you time and money, but it’ll also serve as an important reference point when shopping around for lenders. 

An important thing to remember is that you want to limit the number of hard credit inquiries on your credit report. Fortunately, the pre-approval process for personal loans is generally classified as a soft inquiry. However, before submitting your application or documentation, confirm that having your credit checked with that particular lender won’t impact your credit score. If it does, you may want to consider looking elsewhere. 

4) Establish Good Financial Habits

It may seem counterintuitive to think about your financial habits when you’re in the midst of dealing with a financial emergency, but in reality, there’s never been a better time. Being faced with an unexpected expense often sheds light on our current financial situation and puts into perspective areas that we’d like to improve on. 

For example, revisit your budget and make it a priority to put aside money for a small emergency fund. That way, in the event you experience another unexpected expense, you’ll have more financial resources to work with and won’t feel as stressed. 

When you need a personal loan to cover an unexpected expense, it can be tempting to go with the first available option you see. However, taking the time to conduct some research and fully explore your options will allow you to confidently select a loan that works best for you and your unique financial situation. 

At Credit Direct, we understand the value of being financially informed, so we make it easy to explore your options. Apply online to check offers from us and our network of trusted lending partners with no effect on your credit score. Our application takes just minutes to complete, and you can receive funding in as little as 24 hours! Let us help you find the best option for covering that unexpected expense.

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