Creditworthiness

Emergency Funding: Get Fast Loans Online

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You may have money set aside for future expenses. However, emergency expenses and other big-ticket expenses can come, which you cannot afford if you have little to no savings intended for such situations. For unexpected financial emergencies, you will need fast funding.

Applying for a loan from banks and other lending companies may take some time before approval and release of the money. On the other hand, getting loans online is ideal because of quick processing and accessibility.

If you plan to resort to the latter, there are loan options you can avail, of and one of them is emergency funding.

Emergency funding

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Emergency funding helps you cover unexpected expenses that you cannot afford currently. These expenses are completely unplanned and unpredictable. These loans are usually unsecured, meaning you will not need to set up collateral to secure your loan.

You can use your emergency funding for many emergency expenses. These include an occurrence of a natural disaster, major car repair, home repair, school fees of students, medical expenses not covered by insurance, any big-ticket purchase needed immediately, and other emergency expenses.

You can get funding without using your credit card, avoiding the risk of juggling multiple credit limits and payment deadlines. With taking out an emergency loan, you only have to make a fixed-rate installment cash credit payment.

In choosing an emergency loan, you have to consider the funding speed, loan rates, and features of the lender. Since the funding is for emergency purposes, you should look for a lender that assures fast funding like CreditNinja

Also, compare rates from different lenders. Lastly, consider payment features through reading terms and conditions. If you consider these, then you will surely get the best deal for your emergency funding.

Benefits

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Here are the advantages of emergency funding:

1. Fast

Today’s generation wants everything to be done in an instant. They want to make borrowing money as easy and as fast as possible. Thus, it is important that emergency funding be provided as soon as the application is approved. Online lenders disburse the funds to your personal savings account after approval.

Banks and other physical lending companies may take time to review the application. The application process may take a few minutes to an hour, while the approval may take a few hours to a day. Good thing, online lenders can quickly inform the applicant of the approval/disapproval of the application and when the account will be funded.

2. Convenient

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Aside from the fast processing of loan applications, you do not have to physically go to their offices repeatedly to apply. With just a few clicks of a button, you can easily process your loan application and get updates anywhere you are.

Online loans are more accessible to every American. Banks and other traditional lending companies use a more rigorous method in approving loans than online lenders. You will also get better chances of approval even if you have a low credit score.

Further, there is minimal documentation needed for online loans. The documents asked by online lenders are minimal and basic, such as identity proof, income proof, and address proof.

3. Lower interest rates

Since online loans are more flexible than other traditional loans, online lenders can sometimes offer lower interest rates with lower minimum and installment payments. This is also because these loans are short-term. Thus, the lower interest rates than what banks normally offer. The best way to know what company has the best interest rates is to shop around.

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4. No collateral needed

Many traditional banks and lending companies require you to set up collateral. On the other hand, online lenders use other ways to know your creditworthiness. They will use your debt-to-income ratio, utility bills and payments, and even your social media accounts. Without setting up your property as collateral, you will avoid the risk of losing your asset.

5. It’s okay not to have a high credit score

You do not need a perfect credit score to qualify for an online loan. Going to traditional banks and lending companies require you to have a good credit score before that will approve your loan. However, not everyone has a good credit score. Since online loans are flexible, then online lenders will find a loan with terms suitable for those with poor credit scores.

Processing your online loan

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Here are the steps you need to undergo if you want to apply for emergency funding:

1. Check your creditworthiness

You do not need to have the highest credit score to take out an online loan. However, it would be good to start with a good credit score. Having such would boost your application and will get quicker approval than having a low credit score. You will also have a higher chance of getting a lower interest loan if you have a good credit score.

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2. Prepare important information

Having all the important information on hand will make it easier for you to apply. These include your personal documents, certification regarding your credit score, employment details, and income details.

3. Shop around

The best way to get lower interest rates is to shop around for different online lenders. Aside from interest rates, you should focus on the fees and other charges as well. Doing so will ensure that you will get a lender with terms that are fit for your funding needs and qualifications.

4. Apply and wait for approval

Once you found your online lender, send an application, and wait for any updates regarding your approval. Once approved, wait for the money to be deposited into your account. Make sure that you pay on time to improve your credit score, which will be essential in the future.

Takeaway

You will never know when you’ll need a huge amount of cash to pay for something urgent. It may be for emergency medical expenses, car and home repair, or a big-ticket purchase that needs to be purchased as soon as possible. Fortunately, you can get funding online. All you need is to shop around, apply, and wait for the approval.

Creditworthiness: What’s In It for Borrowers?

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You probably have read or heard about the term “creditworthiness” many times when researching a loan or credit cards. It’s not surprising as it has a very important part of every loan application there is.

The term is pretty self-explanatory as it’s basically a term describing how worthy the borrower is off the loan as well as his or her likelihood to default on the obligation.

How Do Lenders and Creditors Get Your Information

You need to render some personal information first to qualify for a loan. This should include necessary details like your name, contact information, and address. The lender or creditor like CreditNinja Financing might also ask finance-related questions to you to better gauge your eligibility, such as your employment status and income.

After submitting your application, they will run a hard credit check that will affect both your credit report and score.

For instance, a lender might check how much debt you currently have and what your income to help them ascertain your capacity to repay the loan that you’re applying for.

What is a Credit Score?

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It consists of a three-digit number ranging from 300 to 850. A high score means your creditworthiness is good. It also implies that you manage and pay your debt and obligations on time.

The biggest factor that affects it is how often you settle your bills on time. Delayed payments and other financial misconducts lessen it.  As a consequence, it will be difficult for you to get approvals on loan and credit card applications.

Besides financial and debt management, the amount of debt you’re carrying is also a big factor. For example, having a high balance can make it hard for you to get loan approvals.

That being said, pay down your loan balances and keep your balances below 30% of the limit. Also, lessen your applications for a new card and only apply for new items if necessary.

What Your Credit Report Contains

It houses important personal details about you that lenders check when evaluating your creditworthiness. Apart from basic information, you’re probably wondering what else is written on the report and how you can check it out yourself.

In case you don’t know, you’re entitled to one credit report every year. The three major bureaus namely; Experian, Equifax, and TransUnion, will allow you to check your report through visiting their websites.

Know it that this report doesn’t include your credit score. But you can check it separately and for free through financial sites that provide credit score checking services. Another way to check your score is by taking a look at your current loan statements.

Below are the pieces of information that you can find in your credit report.

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  • Personal details such as your name, birth date, address, social security number, and phone number.
  • New and old accounts information, including payment history, account balances, account types, creditors’ names, and available
  • Public records like bankruptcies, foreclosures, liens, and civil suits.
  • Inquiries from companies from companies that checked credit report.
  • Debt collections

At this point, you’re now aware that lenders who run a hard credit check on your report can see just about everything related to your finances. All of these metrics come together so they can gauge how risky you are as a borrower.

Creditworthiness Varies

It’s important to know that it also varies depending on the type of loan you want to apply for.

For example, payday loan lenders have more lenient standards and requirements than mortgage loan lenders. The reason is that mortgage loans pose higher risks for the lenders because they involve bigger money with nothing to back them up in case the borrower defaults the loan. Good thing you can secure a loan with collateral which helps minimize the risk so you can qualify.

On the other hand, applying for a credit card is easier and have a higher approval rate, even if you have a shoddy credit history or a low score. However, when such is the case, the loan comes with a higher interest rate.

How to Improve Your Creditworthiness

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To stay on top of your creditworthiness, it’s important that you monitor your score regularly. You can do so by using credit checking platforms online. These platforms will grant you access to your score and give tips on improving it.

Now, if you’re having a hard time getting approved for loans, you need to polish it. Prove to the lenders that you’ll not default on debt obligations.

Get a Credit Card

You need to build credit if in order to build your score. It doesn’t necessarily mean your card should carry to improve your score. It means you need to make purchases that you can afford to pay once your billing cycle ends.

Paying your bills in full every month will showcase your capacity to repay a debt on time, which is crucial in establishing good credit. If you can’t acquire a regular credit card, you can get a secured version from a lending institution or a bank. They can also give you a card limit that’s equivalent to the money you deposited into an account.

Be Responsible with Using Your Credit Card

Don’t max out your card and always pay your bills on time. Remember that having a high balance on your card can harm your score even if you’re paying it every month. It’s ideal to keep your monthly expenses within or less than 30% of your credit limit.

In case you exceed your limit, settle the balance right away. It must be done before your statement closing date to minimize the balance that’s going to be reported to the credit bureaus.

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Apply for a Loan

Credit comes in two types: revolving and installment credit. If you want to get the best possible score, you need to build your creditworthiness with both.

Know that a credit card falls under the revolving credit type. Thus, if you don’t already have installment loans such as mortgage, car, or student loan, consider applying for a small personal loan that you can easily pay.

Stay on Top of Your Credit Report

To make sure that you don’t have any negative marks on your reports, you must regularly monitor it. If you find inconsistencies, errors, or unauthorized accounts or reports on your report, dispute them right away.

Takeaway

If you feel like there’s still room for improvement for your credit history and score, there are steps you can do to fortify them as well as your overall creditworthiness. Just put in mind that it is a loose term whose definition can vary depending on what kind of loan you’re seeking and on the lender.

While it’s difficult to determine what do lenders care about the most in your credit report and how strict they can get in terms of requirements, knowing what information they use to gauge your eligibility is the first step in increasing your likelihood in securing a loan and in improving your financial health.