If you’re struggling under a mountain of debt, you may have already convinced yourself that you could never qualify for a personal loan. Well, think again. Although credit scores, income and debt-to-income ratios are certainly considered when candidates apply for personal loans, it may be easier than you think to receive a loan that could help improve your financial situation by shrinking that mountain. Here’s a look at what lenders are looking for when making personal loan decisions.

What Lenders Look For

Not surprisingly, the first thing that lenders look at when deciding whether to offer someone a personal loan is their credit history. This is the detailed report that shows how you have managed credit and payments over the years. Associated with the credit history is your credit score, which is usually between 300 and 850; the higher the score, the lower the risk for lenders. But even if you have a lower number, that doesn’t mean a loan is impossible.

Lenders also consider your ability to make payments — namely, your income and employment history. They look at your current debts and create what is known as a debt-to-income ratio. If your personal loan is secured with collateral, the lenders evaluate the value and equity of the collateral. Often, this is your car or home. They may want to know about any savings or assets you have beyond your collateral that could help repay the loan. Finally, they want to know how you plan to spend the loan proceeds.

Credit Scores Impact Terms

Because a personal loan is an installment loan, the debt is less damaging to your credit score than credit card debt. In fact, because a personal loan offers diversity in your credit, it can even improve your credit history. Of course, if you already have years of damage to your credit score, lenders have to consider the future risk.

Overall, when the risk is higher, the terms are less favorable to the consumer. You may have to pay the loan off over fewer years, or perhaps the interest rate would not be as low for someone with worse credit. While the terms are impacted, it is still possible to receive a personal loan as a way to begin rebuilding your credit and find debt relief.

Small Loans Are Still Possible

If you have trouble getting a personal loan by yourself due to a poor credit history, don’t give up hope. There are many options still available. First, you could enlist the help of a co-signer to act as a personal loan co-applicant. If they have a positive credit history, it could boost your chances. Another option is to apply for a smaller personal loan. This presents the lender with less risk and also gives you the opportunity to pay down some of your high-interest credit card debt. If you have collateral, that can also help you get a secured loan. The point is, there are many options that are worth considering as you create a debt management plan for yourself. Personal loans are just one tool you can use to achieve fiscal health.

Ready to learn more about whether you could qualify for a personal loan? Click on Refi.com’s personal loan page to begin the process today.  




It can sound too good to be true: You’re drowning in debt, your credit cards are maxed out, you’re behind on your bills and you don’t know where to turn. Then you hear about debt relief companies. These companies will tell you that they are able to negotiate with your creditors to create a solution that will allow you to pay off your debts over time. It could be the answer to all your problems – but if you don’t choose wisely, these companies can actually be just another problem. Finding a reputable debt relief company means looking past marketing tactics and understanding the bottom line. Here are a few tips to help:

Cash-Out Mortgage

One popular way to reduce debts that carry high-interest rates — like credit cards — is to use your existing real estate investments to your benefit with a cash-out refinance. This type of loan involves refinancing an existing mortgage, with the new mortgage being greater than the original one in order to provide the borrower with the extra funds they need to pay other bills or reduce other debts. This process can actually improve credit scores if you pay off maxed-out credit cards with your refi. And you may even be able to deduct the mortgage interest from your taxes! To get started, learn about the requirements for this type of loan:


If you have built up equity in your home but are struggling under the pressure of mounting bills, a cash-out mortgage refinance may be a good solution. These types of loans allow borrowers to take a percentage of their home equity as a cash payment that can be used in any way they wish. Of course, the smartest financial planning is to use a cash-out refi for a long-term fiscal goal rather than a short-term project. In other words, using your home equity to buy new clothes or take a fancy vacation could be a decision you regret. Instead, consider these smart ways to use your loan to improve your credit score and position yourself for better financial success in the future.


Bills, bills, bills — if you dread the walk to the mailbox or answering your phone, you may be searching for your own version of a miracle. Debt in the form of high-interest credit cards, student loans, medical bills, and so many other ways causes stress and worry that can take over your life. But there is a solution — debt consolidation loans provide an answer for thousands of individuals who were considering bankruptcy as a way to regain control of their finances.

debt consolidation 101

Money owed is money owed, right? Not exactly. Debts can differ dramatically, especially when it comes to which debts can be consolidated and the ways lenders can work to recover what was borrowed. There are two major types of debts: secured debt and unsecured debt. If you understand the difference, you can better understand your financial health as you work your way out of debt and get on the path to a stronger fiscal future. Let’s take an in-depth look at the different kinds of debt so you can make informed decisions as you work to prioritize your repayment process.

Are you at the point where you’re too stressed out to check your mail or answer your phone, for fear it’s a collections agent, another bill, or any sort of unpleasant reminder that you are struggling under the weight of debt? You’re not alone. High-interest credit card debts, medical bills, student loans, home equity loans, and many other kinds of debt can stack up quickly, making it difficult to imagine there’s a solution to repair your credit history, pay off your debts in a responsible way and maintain your dignity.

There is more than $1 trillion in credit card debt in America. How much do you have? When you have high-interest credit cards and balances that make the bottom line of what you owe go up every month, you may find it doesn’t take long for your debt to snowball. There are many ways to find debt relief, but some methods are better than others when it comes to paying off credit cards. Some people look to debt settlement as a solution. This is where you stop paying all your bills and instead work with a settlement agency to work with your lenders to reduce your debt over time. But it can negatively impact your credit, and make your debt even worse. Let’s look at other ways the experts suggest paying off your credit card debt.