Best Personal Loans in Detroit, MI

How to choose a personal loan company in Detroit

People seek loans for major purchases, medical bills, starting a business, vacations and weddings. Personal loans in Detroit are most commonly used for debt consolidation and home remodeling.

It’s no wonder Detroiters are ditching the credit card to cover the cost of remodeling. Personal loans have perks like fixed terms and interest rates, which means you know exactly when your loan will be paid off.

Personal loans in Detroit are also referred to as signature loans because most don’t require collateral, only your signature on the dotted line. With these loans, your home or car can’t be repossessed if you fall behind on payments.

Favorable terms are possible with strict standards for approval. Qualifications vary by lender, but most that offer low, fixed-rate personal loans have a minimum credit score and minimum income requirements. Those with poor credit are not out of luck as some types of personal loans are for people with bad credit.

Credit scores above 670 are good and below 580 are poor. A low credit score doesn’t prevent you from getting a personal loan, but it does limit your options for lenders and increase your likelihood of a high interest rate. Local credit unions offer the most favorable terms for borrowers with poor credit.

Regardless of the type of personal loan you get, the process is about the same. First, check your credit score, then get pre-qualified for a loan. Pre-qualification gives you an idea of how much money lenders would be willing to loan you and at what interest rate.

Pre-qualification only requires a soft credit check, which doesn’t hurt your credit score. If you apply for the loan first and are denied, the credit check will appear on your credit report and temporarily lower your score.

Next, check out local credit unions and the online lending marketplace to compare loan amounts, interest rates, monthly payments and terms by using the information in your pre-qualified offer.

Review the fee schedule for the application fee, origination fee, late payment penalties, returned check penalties and prepayment penalties. The Truth in Lending Act requires lenders to include a list of all fees and charges that will be applied to the loan. If the fee schedule is not included in the agreement, request one or choose a different lender.

The final step is the approval process. You’ll need verification of your address, proof of income and a valid photo ID. Once approved, the money can be in your account as soon as the next day.

Repayment is easy with personal loans. You pay the amount specified once per month on the date specified, either electronically or by check. At the end of the term, your loan should be repaid in full.