How to Choose the Best Loan
When the need to obtain cash fast comes about, the options can just as overwhelming as the reason you need the money. For a large loan, $5000 or more, a bank or credit union will generally be your best option. For a small loan, under $100, apps like Earnin are a low cost option. Majority of the time, the need for a loan is based off an emergency like a major repair on your home or vehicle or an unexpected bill. These dollar amounts vary from several hundred dollars to a couple thousand. Since banks and credit unions do not generally loan money under $5000, and have an extremely intensive screening process that can prolong fund being dispersed for several days to even weeks, and apps like Earnin only provide up to a $100 and require that the money received has already been earned, most people turn to payday loans. While at the time, this may seem like the best, and only option, these types of loan trap you a vicious cycle of exorbitant fees and interest and tend to cause more harm in the long term. Another option that exists is a signature loan; a loan that you are able payback in easy monthly installments up to 12 months and is built to provide you the financial relief of your current situation without creating a financial crisis in the future.
Know the Difference
What is a Signature Loan
What is a Payday Loan
A signature loan is just that. Instead offering up collateral for the borrowed amount, you are giving your word that you will pay the loan by providing your signature as a legally binding promise. Due to this, obtaining a signature installment loan has a stricter criteria when determining if and how much we are willing to lend you. Our process begins with a prescreen; this is completed before we even review your credit history. The primary goal in this step is to determine if your current income compared to your current debt will allow for you re-pay the loan without putting a severe strain on you during the loan term. We also want to make sure the you have steady income and are not at risk of no longer having the money to pay the loan as agreed upon. Once we have established that you meet both of these criteria, we will request a copy of your credit report to look for positive revolving credit as well as any prior loans or debt obligation payment history. In this step, your credit score is not our primary focus, but rather the story of how you resolve your debts. If approved, we will then extend the offer of a loan to you; the amount may differ from the amount requested if we feel the higher amount has the potential to place a further financial burden on you. In the offer, we will also discuss the repayment time frame, anywhere from 2-12 months, and the monthly payment amounts.
A Payday loan is meant to be a short-term borrowing option to get you through to your next payday. It requires you to have a valid checking account that is in good standing and the agreement to repay the full amount on the date of your next paycheck which is secured by providing a check written out the company or your routing and account number. While these loans can be extended, up to 4 times in the state of Texas, the payment made for the extension only applies to an extension fee and the current interest on the loan. The principle (amount of money borrowed) will not be paid down till the actual amount owed is repaid. An example of this is if you borrow $300 and the total repayment in $366. Should you decide to extend the loan, you will pay $66 plus the extension fee and on your next payday you still owe $366. If you decide to extend this loan the max amount of times, you have paid $630, or more, for the original loan rather than $366. The downfall of this is that if your financial situation has forced you to take the extension, and no additional extensions are available, you are right back to the situation you were in when you initially took out the loan. You also end up paying back almost double, if not more, than what you initially borrowed. Generally this scenario forces you to take out another payday loan forcing you into further financial distress. This is what is know as the payday trap.
When deciding what type of loan to get, it is best to assess your financial situation and what makes the most sense to you currently and in the future. If you know that you will be able to pay the loan back with interest by your next payday, then a payday loan may be the best option for you. The reality is though, if you were in a position where you needed the loan to begin with, the probability of being able to pay the loan back with a couple of weeks is slim. This is why the ability to pay back the lender in small monthly payments over an extended amount of time, more often than not, is a much better for you, your well being and peace of mind. A signature loan allows you to borrow money and take up to 12 month to repay the loan while knowing that the principle of the loan is being reduced each time. The best part is that if your financial situation allows you pay the loan off early, then you can do so without any penalization as well as a reduction in the total amount of interest paid on the loan.
Resident of Bexar County
This can be confirmed by providing a current lease of deed, letter from your landlord, a utility bill, bank statement or any other type of documentation that confirms residency. If you do not have any type of documentation that links your name to you current residence, please call our office to determine what other methods we can use to prove that you reside in Bexar County.
Government Issued Picture ID
This can be an identification card, drivers license, passport, or veterans ID*. Although we would love to be able to trust you are who you say you are, the law requires that we have concrete proof of your identity before entering into an agreement that will create a debt that must paid back. This is for your protection as well as ours.
*Due to federal guidelines, we are unable to extend a loan offer to any enlisted military personnel. We apologize for any inconvenience this may create but please know we are extremely grateful for your sacrifice to this country and the citizens of America.
Proof of Income
Your income source can be through an employer, unemployment, social security, retirement, disability and any other source that reliable. The income provided, an its source, must be verifiable that paystubs or statements.
Debt to Income Ratio
In order for us to extend a loan offer, we have to be confident you will be able to pay it back. Since we report to credit bureaus this is in your best interest. Income is not just about how much you earn but also about how much you owe. You could make $5000 a month but by the time you pay all your bills and meet the minimum requirement of necessities, you make have little to nothing left. An installment loan becomes another bill each month, and if you are already overextended, the can cause additional financial harm to you and your family as well as affect your overall ability to meet the promise you made to us. It is always best to be honest will us, as well as yourself, on what you have coming in versus what you have going out.
Once we have determined the the about criteria are met, we will run a credit check against your social security number. Although credit scores are a reflection of previous and existing payment history and credit availably, we understand that life happens and your score or history may not be perfect. When determining if we able to loan you the requested funds, we will review current debts and payment history rather than what your actual score is. This has more influence on our signature loans (unsecured) than our title loans (secured) since the promise to pay back the loan is on your word versus providing some form of collateral. Although we do not lend to potential borrowers who are in the process of a bankruptcy or rebuilding their credit afterwards, we do consider bankrupt applicants who have already re-established credit and show a positive payment history for a prolonged period of time.