Personal loans are useful to tide over any financial emergency. Whether it is to cover an unexpected medical expense, pay down a debt, make a big-ticket purchase, or pay for urgent home repair, personal finance can be used for several purposes. There are various personal loan providers, each with different terms, APRs, repayment periods, and customer support. To find the right personal loan, here are a few things you can do before applying for one.

Learn about the different types of lenders
Before applying for a personal loan, it helps to know about the different types of lenders who offer personal loans. Most loan providers can be categorized into any of the following:

• Banks and credit unions
  These financial institutions offer secured personal loans. To apply to these lenders, you require a good credit score, and sometimes, a collateral. Since most of the banks and credit unions are reputable, well-known names, you do not have to worry about getting trapped in a loophole of too many terms and conditions. Nonetheless, do some background research to stay cautious.
• Online lenders
  These lenders have a complete digital loan application process. Moreover, your loan will get approved faster than banks and credit unions. You can get secured as well as unsecured personal loans depending on what the lender offers. Before applying for personal finance online, make sure to do some background research and check customer reviews to know how trustworthy the lender is .
• Peer-to-peer lending platforms
  These match lenders with potential borrowers. You can use a lending platform to borrow directly from an individual lender. So, there are no middle entities such as a financial institution or lending company and the structure of loans remains the same as what’s offered by any other type of lenders.

Maintain a good credit score
All loan providers run a credit check before they approve of a loan. Your credit score helps them determine whether you will successfully pay back the loan in time. For personal loans, most lenders require you to have at least a fair credit score, which usually ranges between 580 and 669. If you have an excellent credit score above 670, your application for a personal loan can be processed faster.

Get a co-signer
A co-signer is a person who is legally responsible to pay off your loan if you are unable to do so. You may need a co-signer if your credit score is not satisfactory. However, even if you have a fair credit score, bringing in a co-signer can help you get a low interest rate.

Have a collateral
Not all personal loan providers allow for co-signers. In such cases, you can choose to apply for a secured personal loan. The only caveat with such loans is that you need to pledge a collateral, which can be anything, from your car to your house, cash in your savings account, or a deposit certificate. Such a collateral can help you get favorable terms on your loan such as low interest rates or delayed repayment periods. But if you are unable to repay the loan in time, the collateral becomes a property of the lender.

Compare different lenders
To ensure you get a good deal, make a list of different lenders and do a comparison of personal loans offered by them. Make sure to compare the interest rates, repayment terms, loan period, and credit score requirements. Don’t forget to consider additional fees such as administrative fees or late fees to your comparison list. This will help you to find out which one is the best for you.