Is a personal loan right for me?
We all know about big financial goals like the need to save for retirement and putting money away in a kid’s college fund. But what about shorter-term financial goals you’re looking to plan for: paying for a wedding, a home repair or improvement or setting aside money for emergencies?
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Having a plan and saving for these things is a smart move. But life occasionally gets in the way. Sometimes you can’t save as much as you’d like. Maybe your job situation changes. Or you’re hit with a large unplanned expense. A personal loan may be an option to help.
A personal loan can be used for those expenses you plan for, but could also be for other unexpected life expenses. For example, it could be $6,000 for an unexpected insurance or medical bill or $3,000 for an apartment broker fee & first/last month’s rent. The loan goes to you and you get to decide how to spend it.
Pros and Cons of Personal Loans
Personal loans may make sense when the monthly payments are less expensive than other types of credit (like credit cards) and you can comfortably afford the monthly payments for the term of the loan. And breaking up a big expense into smaller payments over time can make it more manageable.
Some people use personal loans to consolidate high-interest rate credit debt, which could help if the loan rate is lower than those credit cards. But taking out and paying back a personal loan on time may also be a good way to build up your credit history and positively impact your credit score over time. Think about that – you may be able to pay down your credit card debt and increase your credit score at the same time
Personal loans can be helpful when done for appropriate reasons and knowing that you can pay it back without making your financial situation even worse. Taking on debt should never be something you do lightly - or without looking carefully at your overall financial picture.
Minimize the Impact of Inquiries
Before you make any kind of important credit decision, it's best to check your credit report so you understand your current credit standing. Remember, checking your own credit report does not affect your credit scores, so you can check as often as you need.
However, according to Experian, when you apply for credit and a lender reviews your credit report, a hard inquiry is noted on your report. Hard inquiries remain on credit reports for two years, and their impact diminishes over time. However, in the short term, too many hard inquiries on your report can have a negative effect on your credit score.
What to Do Next
You can check rates for a Personal Loan by Apple Bank before applying and it won’t affect your credit score – we do what’s called a soft credit check. It’s only when you complete the application process that a hard credit pull will be performed, which may affect your credit.
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Disclaimer: Content provided for informational purposes only; does not constitute financial advice.
1. When you check your rate, we perform a soft inquiry on your credit report. This initial “soft” inquiry will not affect your credit score. If you complete the application process, we will perform a “hard” credit inquiry which may impact your credit score. If you accept a loan, repayment information will be reported to the credit bureaus.
Subject to credit approval. New York state residents only. No origination or application fee. Personal loans by Apple Bank feature rates no greater than 24.99% Annual Percentage Rate (APR), with available terms of 3 years (36 months) or 5 years (60 months). Rate and term are based on creditworthiness, income, and information provided in your loan application. For example, if you are approved for a $10,000 loan at 10% APR for a term of 36 months, you will pay $322.67 a month, and a total of $11,616.12 over the 36-month life of the loan. Your rate and loan amount may differ from the provided example. Longer repayment terms may have higher rates.
If you accept your loan by 5:00 pm ET (not including weekends or holidays), you will generally receive your funds the next business day. If accepted after 5:00 pm ET Monday-Friday or during the weekend or holidays, you will generally receive your funds two business days later.
While many borrowers opt for automated recurring payment for ease of use, we also accept payments by check or one-time electronic payments. Borrowers have the flexibility to choose the repayment method that works best for them.