How Outstanding Loans Work
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What Is an Outstanding Loan?
Monthly mortgage or rent payment Minimum credit card payments Auto, student or personal loan payments Monthly alimony or child support payments Any other debt payments that show on your credit report
Uses for an Outstanding Loan vs Personal Loan
Debt consolidation Medical bills Home repairs Wedding costs A vacation Moving expenses A large purchase Emergency expenses Funeral expenses Pet surgery
Outstanding Loan vs Personal Loan Interest Rates
Outstanding Loan vs Personal Loan Term Length
How Does an Outstanding Loan Impact Your Credit?
Payment History FICO® credit scores are impacted the most by a borrower’s payment history, which accounts for 35% of a credit score. On-time payments on an outstanding loan can help borrower’s build credit. However, the opposite is also true: Any missed or late payments can have a negative effect on a borrower's credit. Amounts Owed The amount of debt a borrower owes also contributes to their scores. This includes the amount owed on all accounts, including outstanding loans and credit cards. It also looks at credit utilization, which is the amount you owe compared to how much credit you have available. For FICO credit scores, amounts owed accounts for 30% of a credit score. Credit Mix 10% of a person’s credit score is calculated by determining their credit mix. Having a mixture of both revolving credit (credit cards) and installment credit (outstanding loans) can have a positive impact on a borrower’s credit profile.
Do You Need Collateral for an Outstanding Loan?
Outstanding Loan Example
Outstanding Loan vs Personal Loan: Which Is Better?
Applying for a Personal Loan
Personal information Social Security Number Birthday Full legal name Loan application Proof of identity License Passport Government issued ID Employer contact information Paystubs Tax returns Proof of address
3 Personal Loan Tips
Personal loan interest rates vary from lender to lender, but generally depend on your credit score. With one online application, Lantern by SoFi makes it easy to find and compare the personal loan interest rates that you qualify for. If the interest rates you’re being offered seem too high, try lowering the loan amount. Generally, the larger the loan, the greater the risk for lenders, who likely charge a higher interest rate for the increased risk level. Don’t assume that if you have bad credit, you can’t get a personal loan. There are lenders who specialize in bad credit loans.
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