Unplanned or emergency expenses can leave even the credit-savvy consumer searching for answers.
Speeding up the lending process by being organized, identifying lenders who may be out of your comfort zone or embracing online technology are options for gaining approval for a personal loan to assist with unforeseen expenses.
A personal loan is an unsecured loan that is supported only by the borrower's creditworthiness. That is, it is obtained without the use of collateral.
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Keep personal financial records organized and accessible
When funds are needed in a hurry, Liz Modesitt, regional manager for 13 retail locations of First Bank in the St. Louis area, says the best thing consumers can do to expedite the borrowing process is to be prepared.
"Have current pay stubs, W-2s or tax returns if self-employed on hand for income verification," Modesitt says. "If these documents are not available at the time consumers apply, it can cause unnecessary delays."
Consider borrowing from a credit union
Generally, credit unions have lower interest rates for borrowing than commercial banks, says Modesitt. However, consumers should keep in mind that membership is required before any loan can be established.
"This can usually be satisfied by opening a checking or savings account with the credit unit," she says. "Borrowers will want to consider whether the savings in interest outweighs the added requirements."
Look into online lending platforms
Al Goldstein, CEO of Avant, an online lending platform where consumers can apply for personal loans, says the new wave of online lending platforms is using advanced underwriting methods to accurately factor in risk.
Online lending platforms position themselves in the lending application process at brick-and-mortar establishment consumers "who find themselves in an emergency situation," Goldstein says.
"Applications take minutes to complete and consumers can receive funds as soon as the next business day," he says.
Consumers can sometimes receive approval in real time. "For emergency situations where funds are needed right away, this provides comfort to consumers as they will receive an instant credit decision," Goldstein says.
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