By Emily Sherman, U.S. News and World Report featuring Vincent Birardi, CFP®, AIF®, Wealth Advisor at Halbert Hargrove
Scoring a $2,000 personal loan requires good credit if you want the best terms.
Cars break down, medical emergencies come up and unexpected payments rear their ugly heads. There are countless situations where you might need a specific amount of money in a pinch, and many can’t cover the unexpected with emergency savings.
If this happens to you, there are plenty of options for acquiring the money – including personal loans. For those trying to get a $2,000 loan, here’s what you need to know about qualifications and how to find the right loan for you.
What Are the Qualifications for Getting a $2,000 Loan?
“The qualifications required for a $2,000 loan will depend on the lender, but common factors considered include debt-to-income ratio, credit score, employment status and income,” says Zach Larsen, co-founder of Pineapple Money, a personal finance website.
The qualifications for a $2,000 loan don’t necessarily differ from the requirements for any other personal loan. But if you’re seeking a specific sum, it’s good to have the best application possible. You’ll want a high credit score, steady income, low debt-to-income ratio and any collateral that may be required.
“Applicants with a higher credit score and income, and lower debt-to-income ratio, are more likely to be approved for a loan and receive better terms,” says Larsen. “However, for those with less-than-stellar credit, options may include secured loans, co-signers or finding lenders that specialize in working with borrowers with poor credit.”
Steps for Getting a $2,000 Personal Loan
If you qualify for a personal loan, that is usually a good option for getting $2,000 quickly. These loans offer better interest rates and terms than alternatives like payday loans or credit cards.
Follow these simple steps:
1. Research Your Options.
“If a personal loan is your best option, then give yourself sufficient time to research various lender offers,” says Vincent Birardi, a certified financial planner and wealth advisor at Halbert Hargrove.
Birardi advises starting your search with any banks or lenders that you already have an established relationship with, as you are more likely to qualify for better terms.
“Also, spend some time researching [online] for reputable lenders,” he advises. “You’ll want to work with a company that’s not only a good fit, but whose online reviews and reputation you feel comfortable with.
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The Better Business Bureau, Trustpilot and the Consumer Financial Protection Bureau are all reputable sources when it comes to customer reviews and specific complaints.
According to Larsen, you shouldn’t limit your search to traditional lenders like banks and credit unions. He recommends borrowers also look at terms for online lenders and peer-to-peer lending platforms.
2. Prequalify For Offers.
Once you have a good idea of the loans you’d like to pursue, consider prequalification before submitting your formal application.
Lenders that offer prequalification tools allow borrowers to find out if they qualify for the terms and repayment plans they need with just a soft check to their credit. That way, you won’t suffer a hit to your score if you can’t get as much money as you need or the payment plan doesn’t work for you.
3. Gather Required Documentation and Submit Your Applications.
With prequalified offers in hand, it’s time to submit your application. You’ll need to gather all required documentation, which can include your government-issued ID, proof of employment and other documents, depending on the lender.
4. Make a Plan for Repayment and Associated Costs.
“Borrowers should also carefully consider their ability to repay the loan and avoid taking on more debt than they can handle,” says Larsen.
Any time you take on debt, including a personal loan, you should consider your plan to pay it back.
Once you have an idea of your repayment terms and interest, you can build monthly payments into your budget.
