You've recognized that a personal loan is the way that will help you address a financial goal.
You have to find one that offers the lowest rates and fees.
After a little research, you might come across Laurel Road, a lender that specializes in mortgages, student loan refinancing, and (obviously) personal loans.
Whether you're trying to consolidate high-interest debt, pay for a home improvement project, or nearly any other purpose, Laurel Road personal loans could help you achieve that goal.
The best part:
The interest rates can be very low.
If you're considering a personal loan from Laurel Road, learn all about its rates, fees, and application process. Then, compare these features to other personal loan options out there.
Laurel Road Personal Loans Pros & Cons
Loan Size and Term
If you’re looking to apply for a personal loan, you probably have a specific reason for applying for the loan.
Whatever the purpose of the personal loan, you probably also have a specific dollar amount in mind.
That leaves you with the task of finding who will let you borrow exactly the amount you need to borrow.
There’s no point in taking out a loan if it isn’t large enough to cover your needs. You also don’t want to borrow more than you really need to.
Laurel Road offers personal loans ranging from $1,000 to $45,000.
That wide range makes it a good choice for anyone who needs to borrow a small to medium amount of money. If you need a large loan, you’ll need to find another loan.
After you’ve determined how much you have to borrow, you’ll need to figure out how long it will take you to pay the loan back. This is called the loan’s term.
For example, a loan with a four-year term will have 48 equal, monthly payments. You’ll have paid the loan off after 48 payments, which will have taken 4 years.
Long-term loans cost more than short-term loans. Because they take longer to pay off, there is more time for interest charges to accrue on longer loans. Additionally, long-term loans often carry higher interest rates.
Short-term loans are cheaper because they have lower rates and leave less time for interest to accrue.
Of course, there’s a tradeoff. Short-term loans carry higher monthly payments. Long-term loans carry lower monthly payments.
You should try to strike a balance between a low total cost for the loan and a manageable monthly payment.
Laurel Road offers three terms to choose from.
You can apply for personal loans with these terms:
- 36 months
- 48 months
- 60 months
That gives you some flexibility when it comes to customizing your monthly payment.
Laurel Road’s only explicit requirement for applying for a personal loan is that you must be a U.S citizen or a permanent resident with a valid I-551 card.
You can apply regardless of your financial situation, but your odds of approval will vary.
Fees and How Long It Takes to Get the Money
When you compare different lenders, you may find that different lenders have different specialties.
Some lenders are good for lending very small amounts of money. Others focus on very large loans. Some lenders get you the money that you need quickly and some aim to offer low fees and low rates.
The best part about Laurel Road:
No fees and low interest rates.
There are no origination fees or early repayment fees charged on Laurel Road personal loans.
That means that the amount that you borrow is the amount that you owe. Some banks will charge an origination fee equal to a percent of the amount you borrow, immediately increasing your loan balance.
The interest rates the lender offers are also good. They’re relatively low when compared to other personal lenders.
Laurel Road is also good at getting money to you quickly.
From the time your loan is approved to the time the cash is in your account can be as short as 24 hours.
In the best case, you can have your money within a few days of applying for a loan.
How to Get Approved
After you’ve made the decision to apply for a personal loan, you should do whatever you need to do to maximize your application’s chances of approval.
During the application process, the lender will ask you to submit information that it can use to make a lending decision.
The information you’ll be asked to provide will often include:
- Date of birth
- Proof of identity, such as a driver’s license
- Social Security number
- Annual income
- Proof of income, such as bank statements or pay stubs
- Verification of employment
It might seem daunting to gather so much information and paperwork, but taking this process seriously is important.
If you don’t provide complete and clear information when you apply, it can have a negative effect on your application. In the best case, the lender will take longer to approve your application and will need to contact you for additional information. In the worst case, your application will be rejected outright.
Improving Your Chances of Getting Approved for a Personal Loan
Before you submit your application for a personal loan, you should take steps to improve your chances of getting the loan.
Raise your credit score
Your credit score is the primary factor in determining whether you qualify for a personal loan.
Your credit score is a measure of your financial trustworthiness. If you have a good credit score, lenders will think you are more likely to pay your bills on time. If you have a poor credit score, lenders will worry that you’ll miss payments or default on the loan.
Maintaining a good credit score is an important part of everyone’s financial life. It makes it easier to borrow money and makes borrowing money cheaper.
Of these five factors, your payment history is the most important.
The best, but slowest way to improve your credit score is to consistently pay every single one of your bills before its due date. Just one missed or late payment can undo months or years of timely payments and tank your credit score.
The amount you owe is the second biggest factor in your credit score. Avoid taking out a large loan or maxing out your credit cards to maintain a health score.
Unfortunately, these two factors are the most difficult to change in the short-term.
What you can do is avoid taking out new loans and avoid using your credit cards in the months before applying for an important loan.
Each time you apply for a loan, credit bureaus note this in your credit file and reduce your score by a few points. If you apply for loans and credit cards you don’t really need, you’ll have a worse score when you apply for your personal loan.
Each month, the credit bureaus also take note of your card balances. Lower balances are good for your credit score, so avoid using your cards in the month or two before you apply for a loan to get a small bump.
Reduce your debt-to-income ratio
Another major factor in the lending decision is your debt-to-income ratio. This ratio is the percentage of your monthly income that goes towards required bill payments.
You can calculate your debt to income ratio by dividing your monthly income by the sum of your monthly minimum payments on your debts and your rent bill. So, if you make $5,000 a month and your rent and bill payments add up to $3,00, your debt-to-income ratio is 60%.
The best way to improve this ratio is to pay off your existing debts. This will also boost your credit score, giving your chances of getting a loan an extra boost.
You can also try increasing your income, which is harder to do. If you decide to do this by getting a side job, make sure that the income is documented. Under-the-table pay won’t be considered by lenders.
How Does It Compare
Laurel Road is just one of many lenders that offer personal loans.
Most banks and many specialized companies offer personal loans of various types. You should look at all of the options available to you before you commit to a specific lender.
Start by comparing the interest rates offered by different loans. You should always opt for the lowest rate assuming all of the other aspects of the loan are equal.
The other important thing to consider is whether the loan involves any fees. Even if you get a very low rate, you might wind up paying more if the loan charges an origination fee. Calculate the total cost of each loan before you commit.
The Final Verdict
Overall, Laurel Road is a good choice for most people who need a personal loan.
It offers a good amount of flexibility when it comes to the amount you can borrow and the term of the loan.
There’s little reason not to apply for a loan for Laurel Road if you need to borrow less than $45,000 and can handle a term of 5 years or less.