Personal Loan FAQ | BPI (2024)

FAQs

What's the best excuse for a personal loan? ›

Since personal loans are often unsecured loans, meaning they are not backed by any form of collateral, your credit score often plays a very important role in the approval process. As a rule of thumb, if your score doesn't meet a lender's minimum eligibility requirements, your chances of approval are low.

Your credit score is too low

Good or excellent credit (a score of 690 or higher) and a history of paying other loans or credit cards on time will help you qualify for a personal loan, while fair or bad credit and a history of missed payments could get your application declined.

Before deciding to get a personal loan, you must consider potential downsides, such as high interest rates, steep fees and a hit to your credit score if used incorrectly.

While personal loans may be helpful in several situations, they can also come with high interest rates and major repercussions for your credit score. Even so, the benefits of these loans may outweigh the risks—especially if you qualify for a competitive rate and need quick access to cash.

What is the easiest loan to get approved for? The easiest types of loans to get approved for don't require a credit check and include payday loans, car title loans and pawnshop loans — but they're also highly predatory due to outrageously high interest rates and fees.

How hard is it to get a $30,000 personal loan? ›

For a $30,000 loan, you'll typically need a credit score above 600 just to qualify or above 700 to get a competitive rate. A high enough income: Part of the lender's evaluation of your loan application includes determining whether you can afford the payments.

A personal loan applicant can be disqualified for having a credit score that's too low, insufficient income, too much outstanding debt or short credit history.

To qualify for a personal loan, borrowers generally need a minimum credit score of at least 580 — though certain lenders have even lower requirements than that. However, your chances of getting a low interest personal loan rate are much higher if you have a “very good” or “excellent” credit score of 740 and above.

What is the best reason to give when applying for a personal loan? The best reason is exactly what you plan on using the loan for. Lying to your lender could lead to legal trouble.

You Already Have a High Amount of Debt

Juggling multiple debts can put a strain on your finances and hurt your credit, especially if you already have a high amount of debt. The more money you put toward paying off a new loan means less money left over to cover your other monthly expenses.

DON'T EXPLAIN OR MAKE EXCUSES.

When you say no, don't offer explanations or excuses. Doing so only opens the door to a discussion and prompts your friend or family member to try to overcome your objections. Say, “I'm sorry, but I can't give you a loan.” When the person asks, “Why not?” just repeat your statement.