Personal and small business loans
what you should know
It is crucial to apply for loans correctly, for failure to do so can result in very negative consequences on an individual's financial situation. One has to be sure to read the fine print when applying for a loan.
Small business loans 101
One can turn to The Small Business Administration, a federal agency, for small business loans. Of all loans, the 7(a) is most common. This loan provides lower annual interest rates. Additionally, the Small Business Administration offers: 504 Loan Program, Microloan Program, and SBA Disaster Loans. In response to Covid-19, the Economic Injury Disaster Loan and Advance is also available. Created as a result of the $376 billion allocated by the CARES act, this loan is on a first-come first-served basis.
What you need to apply
Be sure to have the necessary documents such as proof of income, registration with appropriate federal, state and local agencies, and personal identification when you apply for the loan. Providing tax return statements from up to three years, bank statements to demonstrate cash flow, and a form of personal identification such as a driver's license or passport is also beneficial for the loan application process.
Personal loans 101
There are a number of credible personal loan companies, such as Avant, Upstart, and Lending Tree. Compared to a bank, Credit Unions can provide more affordable products. These institutions offer advantages such as payday alternative loans and lower cost personal loans. Your interest rate will be contingent on our credit score.
For small personal loans called unsecured loans, one could turn to:
- TD Bank Express Loan: begins at $2,000 and will receive funding within two business days and requires average credit ratings.
- PNC Bank: begins at $1,000.
- CitiBank: begins at $2,000. No requirement to already be an established member.
- Wells Fargo: begins at $3,000, and does not require a membership.
One should avoid payday loans because they charge such a high interest rate - sometimes 500% of the amount you are borrowing. It is also advisable to avoid interest only loans, balloon payments, and adjustable rate APRs.
It is also possible for there to be hidden fees, so be sure to look into that possibility, and read the fine print to be sure that APR rates do not exceed more than 36%. Be on the lookout for any add-on costs, as well as origination fees, prepayment fees or penalties, and extension charges.