Best Personal Loans for Good Credit (December 2023)

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How Long Does it Take to Build Excellent Credit?

Lenders report information about you to the three main credit bureaus, TransUnion, Experian and Equifax. This information is used to generate your credit score. So, from making a credit card monthly payment on time to increasing your debt, each action can have an impact on your credit score.

The amount of time needed to raise your credit score will depend on a variety of factors. This includes your current score, your financial habits and any events that could have lowered your score. There are approximate recovery times for different financial events depending on their severity. These include:

• Applying for a new card: 3 months
• Maxing out a credit card account: 3 months
• Closing a credit card account: 3 months
• Late mortgage payment 30+ days: 9 months
• Home foreclosure: 3 years
• Bankruptcy: 6+ years

Even for every day activity, there is a slight delay in how your score alters. This is due to the reporting process and the communication between your credit issuer and the appropriate bureaus.

So, if you currently have a good credit score, it could take months or more to achieve an excellent score. The main thing is to focus on good financial habits and wait to see how they impact your score after three or six months.

How Much of a Loan Can I Get With a 620 Credit Score?

With both VantageScore and FICO, a score of 620 is classified as fair. This will limit your borrowing power and the rates you’re offered. Having a fair score is considered to be a higher possible risk for the lender, so not all lenders will offer you a loan.

However, it is still possible to obtain a loan, but how much you can borrow will depend on other factors.

You will need to demonstrate:

• Reliable income
• Low debt to income ratio
• Low credit utilization ratio

 If you can meet this criteria you may still be able to borrow as much as you need. Some lenders offer fair score credit loans of up to $50,000 or more.

Of course, the lender will need to use the criteria above to determine the exact amount you can borrow. This applies regardless of your credit score. Even if you had an excellent score, a lender would be reluctant to authorize a loan if your debt to income ratio is too high.

So, think about what you need the loan for and realistically how much you need.

What Credit Union is the Easiest to Get a Loan?

Credit unions have similarities to banks, but they are actually not for profit organizations that are owned by their customers. This means that credit unions tend to offer more flexible terms and lower loan rates compared to big banks.

To get a loan from a credit union, you need to be a member. However, this can be the sticking point, as credit unions have membership criteria to join. Credit unions typically operate on shared characteristics, which could be anything from a specific geographical area to an industry that you work in.

You can search for credit unions in your area using the National Credit Union Administration search tool. If you meet the membership requirements, you can join by making a small deposit. Each credit union will have different loan requirements.

So, while some may allow you to join and immediately apply for a loan, others may have a waiting period, where you would need to be a member for three months or more.

You will still need to complete an application and provide identifying information, such as your Social Security number. Some credit unions also require that you have been in your job for a specific amount of time. You will also need to disclose your income and any current debts.

However, there is nothing to stop you asking someone at your local credit union about their specific loan requirements before you apply. This will help you to save time and get an idea of whether you would qualify.

Is it Better to Get a Personal Loan or Balance Transfer?

If you’re trying to get your finances in order or are planning a large purchase, you may wonder whether it is better to get a personal loan or opt for a balance transfer credit card. There are both pros and cons to each product, so it will depend on your specific circumstances and preferences.

Personal loans allow you to make fixed payments each month on larger balances. You are also likely to get a lower rate on your financing. However, balance transfer cards can be a good option for smaller debts that can be completely paid off in a shorter period of time.

If you only need a small amount and are confident that you will be able to pay it off before the end of the 0% introductory rate, a balance transfer card may be a good option. Just be aware that if you fail to clear the balance before the end of the introductory period, you are likely to be hit with a far higher APR rate.

What are the Expected Fees for Good Credit Loans?

There are a number of fees that can apply to good credit loans. These include:

• Origination Fees: This is also known as an establishment fee and it can vary between different lenders. In simple terms, this fee is an amount to cover processing your loan. Depending on your credit score and lender terms, the origination fee can cost 1% to 10% of the loan amount. This amount can be paid as part of your monthly loan payment or taken out of your funding.
• Exit Fees: Otherwise known as prepayment fees, this applies if you pay off your loan before the end of the term. Exit fees are typically calculated according to the interest you would have paid on the loan. This is often a sliding scale, so the earlier you pay off the loan, the higher the fee.
• Late Fees: These apply if you don’t make a monthly payment on time. You’ll have a payment schedule documented with your initial offer, so you need to ensure that you can meet this schedule each and every month to avoid penalties. Late fees can be calculated as a percentage of your monthly payment or as a flat fee. Some companies charge up to $50 for each late payment.

Loan Requirements For Good Credit Borrowers

Whether you have good or excellent credit, the requirements typically remain the same. You’ll need to be prepared to answer some questions about what you need to borrow the money for and how long you wish to borrow it. There are also more formal requirements and documentation that include:

• Your loan application: Every lender has different application forms to begin the loan process. The initial application is typically quite basic. You’ll need to provide your personal contact information, the loan purpose and desired amount.
• Proof of identity: Banks and financial institutions need to be very careful to avoid fraud and identity theft. So, they will need to see proof of your identity and confirmation that you are a permanent resident or citizen of the US. Appropriate proof includes driver’s license, birth certificate, passport, military ID, Certificate of citizenship or other state issued ID.
• Income verification: Since there is no collateral to back your loan, the lender will need to verify that you have the ability to repay the loan with a steady source of income. If you are employed, you can show W2s, paystubs, bank statements or employer information. If you’re self employed, you will need to show income tax returns, bank statements and 1099s.
• Proof of address: Finally, you will need to confirm your address. This is usually accomplished with a utility bill, but you can also show a lease or rental agreement, voter registration card or proof of home insurance.