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Do Personal Loans Affect Your Credit Rating?

If you are planning on looking into applying for a personal loan, you may be wondering what kind of effect it will have on your credit rating.

If you are wondering if it will have any sort of impact, the short answer is yes. However, when you repay an online personal loan and make each payment on-time, you can end up improving your credit scores in the long run.

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How Much Money Can You Get With A Personal Loan?

If you are in the market for a loan to pay for unexpected expenses or to consolidate your debts, you might be wondering how much you will be able to get with a personal loan.

Before going into specifics, it is important to understand what a personal loan is. It is a type of installment loan that allows you to borrow a lump sum from a lender and then pay it back with monthly installment payments.

Typically, these types of loans come with fixed interest rates. This means each payment will be the same throughout the loan term.

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getting a collateral loan

Collateral Loans

If you have limited cash or bad credit, then you may think that it is impossible for you to get a loan. However, you may still be able to get a collateral loan.

Most of us will have a financial emergency at some point in our lives. A financial emergency can be handled with a quick loan. You can also take funds from your savings account.

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car title replacement

How Do You Get a Copy of Your Car Title?

If you don’t already know, car titles are very important. They are what determines who owns the car.

The thing with car titles is that they are legal documents. Because of this, you must go to your state or city’s DMV (Department of Motor Vehicles) if want to do anything with it.

If your car title is damaged, lost, or stolen, this could wreak havoc on your both financially and emotionally. Car titles are needed to transfer ownership of the vehicle and if you don’t have it, you are out of luck if you try to sell your car.

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find loan value car

How to Find the Title Loan Value of Your Car

Not everyone is completely familiar with what vehicle title loans are. They are short-term loans which can be borrowed from a reputable lender using a title as the collateral for securing the loan.

This type of loan is a huge help to people who may be finding themselves in financially difficult times and are looking for a way to get money quickly. Financial emergencies can sneak up on you and many people do not have saving set aside for these times, unfortunately.

How Much Can You Get for a Title Loan?

In times of financial crisis, a loan provides a means for dealing with money woes. The hard cash offered by a loan can cover immediate expenses.

At least temporarily, problems derived from those expenses go away. Of course, for this to happen, the borrower must be approved for the loan. The loan amount must deliver the necessary amount of money.

Anyone with bad credit or limited income might find a title loan a reliable way to borrow cash. An important question does come up here. “How much money can you get from a title loan?”

man and woman shaking hands and closing the deal

Does a Title Loan Affect My Credit?

If you’re thinking of applying for a title loan, you may be wondering how the loan will affect your credit. Many individuals who apply for title loans have less than perfect credit and are worried whether using this type of loan will lower their credit score even further.

Title loans are a type of credit product that even individuals with poor and fair credit scores can still qualify for. Unlike with unsecured loans, your approval for a title loan will be based on how much you earn each month and the street value of your vehicle.

Provided that you always make your payments on time, taking out a title loan has the potential to help you improve your credit history, which can help you qualify for various other types of credit in the future.

How Your Credit Score Works

Credit bureaus base your credit score on a wide range of different factors. The score helps lenders quickly see whether you’re an acceptable risk when lending you money. Employers, landlords and insurance companies can also use your credit score, so it’s important that you maintain one that is as high as possible. Here are the factors that are used to determine your overall credit score:

Payment History – 35%

Your payment history makes up the most important part of your credit score. As the name implies, your payment history considers how you’ve made your payments on various credit products. Always making your payments on time will raise your credit score, while having late payments will lower it.

Credit Utilization – 30%

Credit utilization refers to how much of your credit limit you’ve used up on revolving credit accounts, most notably credit cards. For example, if you have a credit card with a limit of $5,000 and have a balance of $2,500, your utilization is said to be of 50 percent.

Having credit cards that are nearly maxed out shows that you’re in debt and a higher credit risk, which lowers your score. This is why experts recommend that you use less than 30 percent of your credit limits.

Length of Your Credit History – 15%

The length of your credit history is the age of the oldest account on your file. The longer your credit history is, the higher your score will be.

Credit Mix and New Credit – 10%

Credit mix is the mixture of different accounts, such as credit cards, consumer loans and mortgages present on your file. Having various types of credit accounts open will increase your score. You should also know that every time a lender checks your credit, this lowers your score by a few points, as it shows that you’re seeking new credit.

Calculate a Loan Estimate

The amount of money you can borrow with a car title loan varies from one lender to the next, but will typically range between $2,000 and $50,000. The main factor that will determine how much you can borrow is the current street value of your car. You can use an online car title loan calculator to get an idea of how much you can get based on your car’s make, model, year and mileage.

How Title Loans Could Improve Your Score

Title loans have the potential of improving your credit score if you make your payments on time each month, according to your lender’s terms. After making a few months of payments, your credit score will begin to increase as your payment history will begin to look much better. Your score will keep improving as you make payments to pay off your loans.