No matter the reason for getting a personal loan, it’s important to find the right lender. Here are tips to help find a personal loan lender that meets your needs.

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How To Get A Personal Loan & Find a Lender

When you need money, a personal loan is usually one of the first things that come to mind. Personal loans provide versatility, enabling you to get the proper funding for just about anything you need, including:

Covering the cost of a home or automotive repair

No matter the reason for needing a personal loan, it’s important to find a lender. Here are a few tips to help you find one that best meets your needs. 

When you apply for a personal loan, the lender looks at several factors to determine your eligibility. These same factors also determine the details of your loan, such as your rates, terms, and any fees the lender might charge. 

Credit history is one of the biggest factors in determining your eligibility for a personal loan. Personal loan lenders don’t just look at your credit score. They assess the various factors that make up that score: your payment history, the age of your credit history, and your debt-to-credit ratio. The better your credit history, the higher your credit score. A higher score generally means you have a better chance of being approved and getting favorable rates and terms.

Your debt-to-income (DTI) ratio is different from the debt-to-credit ratio that comprises a portion of your credit score. This ratio compares your total debts to the sum of your income sources. An optimal DTI is 35% or less. Most personal loan lenders will accept a DTI of up to 43%.

Personal loan lenders need to know that you can repay what you borrow. They want to see consistent (and sufficient) income. They also want to see steady employment. 

Many personal loans are unsecured. Others require collateral. Secured loans generally have lower interest rates, but the value of your collateral will play a role in how much you can borrow. 

Some lenders want to know about your liquid assets, including savings accounts, stocks, and bonds. In addition to providing security for the lender, these assets help you get approved and obtain a more favorable rate.   

Not all personal loan lenders are equal. Different lenders offer different rates, terms, and fees. Here are a few tips on how to find the right lender for you. 

Many people apply to the first provider they find. Instead, it’s better to get quotes from at least three different lenders. If the lender allows, get pre-approved. This way, you can see your potential rates and terms without a hard credit inquiry. 

Once you have your quotes, compare them. What are the rates and terms? Pay closer attention to the annual percentage rate (APR) than the interest rates. Are the rates fixed or variable? Variable rates mean your monthly payments may change during your repayment period. In contrast, a fixed-rate loan offers predictability with payments that remain consistent.

The rate and terms aren’t the only factors that determine the cost of your loan. Pay attention to additional charges, such as late payment or origination fees. A lender with a lower APR may also have a higher origination fee, making the loan more expensive in total.

You should also take a close look at the loan’s fine print. Keep an eye out for:

How often a variable rate loan is adjusted

If the lender reports your payments to the credit reporting agencies

If you’re having trouble obtaining a personal loan, the first thing to do is stay calm. For example, someone who was denied a loan due to poor credit or a high debt-to-income ratio can simply take some time to improve their financial situation and apply again later. When the need for capital is urgent, consider the following options.

A bank isn’t the only place to obtain a personal loan. Since traditional banks often have stricter requirements, a credit union may be more accommodating.

Or, you can try one of the numerous online lenders. With fewer requirements and restrictions, online lenders make it easier to get approved. Plus, rates and terms may be more favorable. Some lenders also specialize in supporting borrowers who have low or nonexistent credit rates.

If you own your own home and can’t get approved for a personal loan, you may be able to take out a home equity loan or line of credit. These options allow you to borrow against your home’s equity. Your home secures the loan or line of credit, offering a better APR than what you might get with an unsecured personal loan. 

Like personal loans, you can use a home equity loan or line of credit for just about anything. The biggest challenge, however, is that defaulting on such a loan can result in losing your home. If you feel confident in your ability to repay what you borrow, these options may work for you. Either way, keep in mind all the associated risks when weighing your options.

Aside from taking out a loan, another option is to sell your home. The challenge with this approach is that you need to find a new place to live. 

However, selling your home doesn’t always have to mean moving. For example, EasyKnock’s Sell and Stay program allows you to sell your home and remain as a tenant. This ensures that you get the funds you need while staying in the residence you love. 

The program isn’t a loan. All you need to do is pay rent each month. At any given time during your lease, you may be able to repurchase your home at an agreed-upon price. You may also choose to remain as a tenant or move later on. 

Personal loans provide you with the money you need to meet your financial obligations. Take the time to compare your options and find the right lender for you. If you can’t get approved for a personal loan, take a look at what other options might be available. With the right solution, you can meet your needs while continuing life as normal. 

What is a second mortgage and is it the best option for you? Here are 3 important things to consider before you decide to take out a second mortgage. 

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What Is A Second Mortgage & How Does It Work?

When bills are starting to pile up and you've already maxed out the credit cards, it makes sense to look to your most valuable asset — your home. Millions of homeowners throughout the nation have invested in owning their homes, but are still finding themselves struggling financially.

If you're falling behind on your mortgage, you may not realize that you are able to utilize the cash that’s tied up in the equity of your home. However, there are many options to consider when you need to tap into the value of your real estate investment. 

It's not always the best market to sell your property, and you might not be ready to move. Some homeowners can benefit from programs like EasyKnock's Sell & Stay, where EasyKnock buys your home and rents it back to you, allowing you to gain access to your cash without having to move. Others may be considering a home equity loan or a HELOC, which stands for "home equity line of credit." Both of these are examples of second mortgages.

What is a second mortgage? It is a separate and secondary loan that allows you to borrow money against a percentage of a home value that has appreciated over the years. If your home is worth $100,000 and you only owe $40,000 on it, you may be able to borrow against the $60,000 of remaining equity. This allows you to receive cash without having to move. While it may seem like a great solution to a tight financial situation, there are three important things you should know before moving forward.

Things to Consider Before Taking Out a Second Mortgage

1. You Are Still Responsible for Paying Your First Mortgage

When you are considering a second mortgage, chances are you are working with a different company than the one that previously gave you a mortgage to purchase your home in the first place. A second mortgage does not replace your first mortgage. Instead, you will be responsible for paying off both loans.

Second mortgages are secondary because your original loan is the one that will be repaid first if you lose your home to foreclosure and the bank auctions it. However, if that sale price does not cover the amount you owe on both mortgages, you will still be financially responsible for the remainder. 

Second mortgages often feature a lower interest rate than other loans, so it can be a good alternative compared to applying for a high-interest credit card. But other alternative programs, such as those offered by EasyKnock, can provide the capital you need to avoid foreclosure.

2. The Market May Impact Your Ability to Pay a Second Mortgage When You Sell

Companies that offer second mortgages know you are taking a risk. Your home equity isn't realized until you sell your property at market value. It is possible that the market will change between receipt of your second mortgage and the eventual sale of your home. Your equity could decrease. Just because your home is lower in value does not mean that you won't have to pay back all of your loans.

Perhaps you were previously able to pay a little extra on your first mortgage each month. This helped to increase your equity. Your equity also increases during a strong real estate market, known as a "seller's market." However, when the value of your home decreases, you'll lose equity. In reality, you are taking the money out of an investment before you know exactly what the dividends will be.

3. A Second Mortgage Can Be a HELOC or a Home Equity Loan

Second mortgages usually come in two forms. You can either receive cash for your equity as a lump sum or as a line of credit. This is the difference between a home equity loan and a HELOC to pay off a mortgage or other bills. 

With the home equity loan, you will receive all the cash at once. Then, you will be responsible for paying the loan back within the agreed-upon terms. This usually means fixed payments spread out over a set number of years. Just like your first mortgage, you will pay a portion of interest along with a portion toward the principle of the loan. Check your terms to see the amortization rate.

A HELOC, meanwhile, provides you with access to an account that you can draw from as needed. There are normally specified borrowing limits. It is similar to a credit card that you can pay back and make withdrawals from when you wish.

Some loans have fixed interest, while others have variable interest rates. Read the fine print closely when considering a second mortgage, as you’ll want to make sure you're able to pay what is required so you can keep your real estate investment secure.

Remember, you'll also be responsible for the costs that are associated with your second mortgage, just like you were with your first one. That can mean paying for an appraisal, origination fees, credit checks, and other necessary costs. This is true even if the lender advertises that the second mortgage has "no closing costs." 

Often, homeowners who are considering second mortgages have found themselves in a tight financial position. This may be because they are unable to get a line of credit from a bank, are divorcing, or are at risk of losing their home. You can pay for your first mortgage with your second mortgage, but it's important to take additional steps to protect your financial future.

Financial experts encourage homeowners to create a personal or family budget to ensure that there is enough money to pay your debts every month. It can be difficult to cut costs for enjoyable activities like eating out or buying new clothes. If you don't wish to do that, you'll need to find additional streams of income to pay for your second mortgage. 

Companies that offer the ability to stay in your home while alleviating debt can be a great mortgage alternative. It's important to consider all of your options, such as EasyKnock’s Sell and Stay program, before undertaking additional debt that will leave you more financially vulnerable than before. 

Choosing the best solution for your circumstance will help you get back on your feet and create a stable financial foundation upon which you and your family can grow and thrive.

What is a Second Mortgage & How Does It Work?

A recession can be an uneasy time for anyone, especially for homeowners looking to sell. Find out how a turn down in the economy may affect your home value.

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What Happens to House Prices in a Recession?

When the economy starts to stall, major changes take place. Unemployment rises. People halt all nonessential purchases. Investors get nervous and the stock market drops. In many places, home values are negatively impacted.

Recessions are scary — especially for homeowners who are considering selling. Because there is no clear beginning or end to a recession, it's hard to know how it will affect your plans to sell. Sometimes, even speculation about future recessions is enough to present a challenge.

During a recession, people scale back their spending, especially on bigger purchases like automobiles and homes, and businesses are often forced to lay off workers as a result.

As difficult as they are, recessions are not as bad as depressions. The Great Depression of 1929 lasted nearly a decade until the financial position of the country and its residents improved. 

Since then, there have been nearly a dozen recessions lasting around a year or two each. The last recession, from 2007 to 2009, was sparked by the U.S. housing market crash. Homeowners saw their home values decline dramatically during that period. To determine our current risk levels and plan accordingly, we first need to understand the factors that cause recessions. Let's take a closer look:

Economists consider many different things to determine if a downturn in the economy is actually the start of the recession. Along with analyzing a country’s GDP, interest rates, and unemployment numbers, they also consider a less quantifiable indicator called the "confidence level."

The confidence level, which is measured through surveys of the general public, helps officials understand how people are feeling about the market. If their confidence that things will improve is low, they are more likely to hesitate when considering big purchases. 

When there are fewer people in the market looking for homes, the demand drops. If there is no change in the supply of homes on the market, homes are worth less until demand grows or fewer people try to sell. 

It's possible that your state, city, or neighborhood has been impacted differently by the current economic situation than other areas. Housing prices can vary dramatically, depending on the location. If your home has attractive features like a great view, easy access to highways, or plenty of amenities, its value might not drop at all.

The Great Recession of the mid-2000s impacted the entire nation because it was caused by systematic issues within the lending industry. Lenders were enabling buyers to purchase homes that they could not truly afford, inflating values as the demand for homes rose. When the crash came, it hit the United States very hard. Thankfully, there are now laws in place to protect home buyers from these practices. 

Is the housing market going to crash in 2020?

Here's the good news: Home appraisers aren't focused on what could happen a week, a month, or even a year in the future. They're only interested in the value of your home on the day they visit it. Their research is designed only to support their findings for a home value appraisal, not to predict the impacts of a recession.

Of course, part of what appraisers consider is the prices at which other, comparable homes in your community have recently sold. If you are ahead of the curve and put your home on the market before others in your area, your home value will not change much. However, if others around you are struggling to sell, you may find that your appraisal is lower than expected.

No real estate agent, mortgage broker, or other housing market professional knows what the next recession will look like in terms of its impact on housing values. Sometimes, the answer has to do with the type of home you own. Because home construction has slowed over the last few years, moderately priced homes may still be in demand. 

If real estate professionals don't know, that means homeowners probably don't either. Sometimes, unforeseen bills, a new job, a divorce, or difficult family circumstances will require that you sell, regardless of the economic forecast. 

If you decide to sell your home during a recession, it will likely take more time for the sale to go through. If you list at a pre-recession price, you won’t have many interested buyers. You may need to reduce your asking price or add other incentives, such as paying for closing costs or including some furniture, into the deal. 

It's also important to have your home completely ready for an interested buyer to move in. That means fixing any broken systems and cleaning both the inside and outside thoroughly. You also must pack up your possessions so that any potential prospects can imagine themselves living in your space. 

If this work feels overwhelming, consider the alternative solutions that let you access your equity while staying in your home as long as you'd like. Recessions can be a stressful time, but understanding how the economy can impact your home value can help you to make a smart decision for your financial future.

The financial hardship caused by recessions often prompts homeowners to tap into the cash equity that is locked up in their homes. This money can be used to cover medical bills, college tuition, or even day-to-day expenses. However, the change in housing values may cause you to reconsider a sale.

Many homeowners will instead look toward alternative programs to tap into their investments without having to sell in the middle of a recession. EasyKnock's Sell & Stay and MoveAbility programs allow homeowners to benefit from their investments in a fair, fast way without having to struggle with the challenges of selling a home during a recession.

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How To Get A Personal Loan & Find a Lender

What is a Second Mortgage & How Does It Work?

What Happens to House Prices in a Recession?