Compare Personal Loans Without Hurting Credit Score

A personal loan is a type of loan provided by financial institutions, like banks or online lenders, that allows you to borrow a fixed amount of money for personal expenses. You’re supposed to repay the borrowed money over a fixed period through instalments, with (of course) an applicable interest charge. The loan term typically spans from 1 to 10 years.

Besides the interest charges, it is perfectly normal for personal loans to come along with an administrative fee, origination fee, or even an early payoff penalty.

Econnex makes applying for a suitable personal loan a breeze of a task.

• To filter our search results according to your needs, we will require you to provide us with some essential details.
• Once done, you can compare personal loans from different lenders, assess your options in and out, and apply for the one that suits your needs.
• After your application is submitted, you can simply sit back and relax! Your personal loan application will be reviewed in a matter of a few weeks and upon approval, you’ll be all set to borrow.

Personal loans come with their own share of benefits. These include:  

• Borrowing is in lump sum: The amount you borrow in personal loans is offered in a lump sum. That allows you to make large purchases or simply use the loan all at once with the flexibility of repaying it in a fixed amount.
• Relatively lower interest rates: If you compare personal loans to credit cards, the interest rate that you’re charged in the former is significantly low. In fact, as of September 2024, the average personal loan rate stands at approximately 12.35%, while that of credit card is 20.78%.* 
• The flexible use case: The use of personal loans isn’t confined to a particular purpose. You can go from using it for buying a car to financing a big overseas holiday with it.
• Convenient loan terms: The time that you can buy to repay your personal loan (also called the loan term) can range from one to ten long years.  
• The option to consolidate debts: Consolidating debts, such as multiple credit card accounts, with a personal loan can be a smart move. It simplifies managing multiple due dates, interest rates, etc., by combining them into a single monthly repayment. Moreover, borrowers who qualify for personal loans with lower interest rates than their credit cards can save big on interest.

*Source - Personal loan and credit card interest rate

The answer to this is quite subjective. That’s because the minimum amount you can borrow with personal loans varies depending on a number of factors. These include the lender, personal circumstances, your income, expenses, credit score, and risk profile.

Yes, it certainly can!

A credit score is meant to gauge the creditworthiness of the borrower. Consequently, a poor credit score, resulting from payment defaults, high credit utilization ratio, short credit history, numerous credit applications in a short period, or a poor credit mix, is considered a big red flag. This may lead to your loan application being rejected or accrue high interest rates (which is something you must know before doing a personal loan comparison).

The definition of best lender for personal loans here is quite subjective. You’ll come across many financial organizations offering a diverse range of interest rates. However, your creditworthiness would eventually decide the interest rate that you’d be eligible for. That is why it is advisable to compare personal loans and their interest rates to ensure you get your hands on the best deal from all the available options.

A personal loan can only hurt your credit score if you choose not to manage it right. However, if you make timely minimum repayments, avoid applying for too many loans simultaneously, and make conscious efforts to maintain a clean credit history, your credit score will only benefit.

The time taken for a personal loan to get approved differs depending on the lender. In most cases, it can get approved within two to five business days, but in some instances, it may take a bit longer.

There’s no universal minimum credit score that all lenders accept. Each lender sets its own credit score requirements for approving personal loan applications. However, a score above 550 could typically help your chances.

One big benefit of taking out a personal loan is that it can be used for a variety of purposes, right from funding for travel, wedding, home renovation, and car purchase to debt consolidation.

In personal loans, the interest rate applies to the overall outstanding balance of the loan. So, the repayment that you make on the due date (be it monthly, weekly, or fortnightly) includes the minimum repayment, interest charges, and any additional fee that may apply. You could either choose to pay a fixed interest rate over the term of the loan or a variable one.

Please note that the interest rate that you qualify for largely depends on your lender, credit history, and personal circumstances.