What Are Figure Loans and How Do They Work?
Short-term installment loans, commonly referred to as figure loans, offer quick cash when you need it. Since they’re unsecured personal loans, you can apply without requiring collateral. Actually, the amount of the loan and your eligibility are decided by your income and credit score.
How Can I Submit an Application?
The application procedure is easy to follow. You give basic details about yourself, like your name, address, Social Security number, and bank account information. You’ll also need to certify your employment and income. You can apply in only a few minutes with several lenders, either over the phone or online.
How Much Can I Borrow?
Usually, loans have a maximum amount of $10,000. The precise amount is determined by the lender’s maximum limit, your income, and your credit score. Payment terms last within the period of 3 to 24 months.
How Fast Can I Get My Money?
The money is directly put into your bank account the following business day once it is authorised. Lenders may fund loans in for as little as just a few hours. From application to funding, the complete procedure usually takes one or two days.
What About Fees and Interest Rates?
Interest rates on figure loans are frequently greater than those on bank personal loans or credit cards. Lender-specific rates differ, although they typically range from 20 to 30 percent annual percentage rate. 1-5% of the loan amount is also charged by some lenders as initiation costs. Prior to borrowing, make sure you are aware of all fees and expenses.
With fast funding, minimal paperwork, and flexible terms, figure loans can be an easy way to get extra cash in a pinch. But use them responsibly and only borrow what you can afford to repay. Your future self will thank you.
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Benefits of Figure Loans Over Payday Loans
Unlike payday loans, figure loans typically have lower interest rates and longer repayment terms. Below are sin other benefits:
1. Flexible Repayment Terms
With a figure loan, you’ll have 6-24 months to repay the loan amount plus interest, giving you much more flexibility than a payday loan. Payday loans typically require full repayment within 2 weeks, putting major strain on your budget. Figure loans provide affordable installment payments that work with your budget.
2. Lower Interest Rates
Figure loans have interest rates capped at 36% APR, much lower than the 400% APR or more that payday loans can charge. Lower interest means more of your payment goes toward paying off the principal loan amount. You’ll end up paying less in total interest fees with a figure loan.
3. Build Credit
If you make on-time payments for your figure loan, it can help build your credit since most lenders report payments to the credit bureaus. Payday loans do not report to the credit bureaus, so they do nothing to help build credit. Building a good payment history can help qualify you for lower interest rates on future loans.
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How to Qualify for a Figure Loan
These criteria are pretty straightforward but important to keep in mind before you apply.
1. Stable income
Figure loan companies want to see that you have a steady source of income to repay the loan. This can be from employment, self-employment, investments, or other sources. As long as you can show several months of consistent deposits into your bank account, you should qualify.
2. Bank statements
Speaking of your bank statements, be prepared to provide recent statements to verify your income and balances. Figure loan companies may want to see 3 to 6 months of statements to ensure your income is reliable and that you have enough to cover living expenses plus the loan payments.
3. Good credit
While figure loans are accessible even with bad or no credit, you will get approved for a higher loan amount and lower interest rate if you have a decent credit score. Most figure loan companies consider scores of 600 and above to be good.
If needed, you can take steps to build your credit before applying.
- Pay down credit card balances. Keep balances low relative to your limits.
- Check for errors on your credit reports.
- You can also ask a family member with good credit to co-sign the loan with you. Their good credit can help offset your lack of or bad credit.
- Apply with a credit worthy co-borrower. Their qualifying credit score can make up for a lack of or bad credit on your part.
- Look into credit-builder loans. These installment loans report payments to the credit bureaus to help boost your score over time.
Conclusion
Meeting these basic qualifications will put you in a good position to get approved for a figure loan. Be upfront and honest in your application and provide as much documentation as requested to ensure a smooth approval process.
