Category: Loans

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Financial Loans

Best Personal Loans for Excellent Credit

personal loans with excellent credit

Introduction

Personal loans come from a bank, online lender, or credit union that you pay back at a fixed rate in installments. This usually spans between 2-7 years, and they are best used for large personal expenses (ex. medical bills, home improvement, weddings, or exceptionally expensive purchases, such as a car or boat) or debt consolidation (lumping several debt payments into one).

They are meant to advance towards financial milestones, not add to debt.To qualify, lenders will look at your credit score, credit report, and DIT (debt-to-income ratio). Borrowers with excellent credit—defined as having a FICO score of at least 690—earn the lowest interest rates, receive the largest amounts, and have the most options when it comes to loan selection.

Important Things to Consider When Picking a Loan

Because you have so many options with excellent credit, you have to do some research to pick the best loan service for your intended purpose. Important things to consider would be:

  • Interest rates (how high and fixed/variable)
  • Repayment options (time period, minimum/maximum amounts)
  • Fees (including prepayment, late, and origination)
  • What you are using the loan for
  • Timeliness (how long is the application process and when do you receive your money after you’ve been approved)

Even with excellent credit, your personal loan can still be denied—do not take it as a given. Sometimes, the lender may be backlogged or have insufficient funds to issue out a loan. This will unfortunately result in denial.

Because of COVID, many banks and lenders have offered new products and lower interest rates, though you need to meet extra criteria to qualify.Some may even offer deferred payments or waived fees.

This Year’s Top Personal Loans for Excellent Credit

There are countless loan companies to choose from, and sometimes it can be difficult to find the one that is right for you. The process is tedious, but do not rush through it—you may end up paying much more than you need to.

A couple of this year’s top personal loans for excellent credit are:

  • SoFi
    • Digital lender that offers many products, including personal, home, student, and insurance loans from $5,000 to $100,000
    • Beyond the loan itself, it offers protection programs (ex. if you lose your job and can’t pay), referral bonuses (if a friend signs up), personalized financial planning, and more
    • To top it all off, the loans are fee-free and there is no minimum annual income
    • Their fixed-rate loans range from 5.99% to 20.69% APR
  • Lightstream
    • Offers loans up to $100,000 for almost anything (including medical bills and education loans)
    • Has generous repayment terms rivaling SoFi at 2-7 years, which means lower monthly payments
    • Does not have fees or prepayment penalties
    • Offers discounted interest rate when you sign up for autopay (your credit card has a set minimum amount it pays each month automatically)
      • With the autopay discount, their APR is slightly lower than SoFi at between 5.99% and 19.99%

Conclusion

When applying for a personal loan with excellent credit, you should put yourself through a rigorous process to assure you make the right decision. Comprehensive research into different loan companies and types of personal loans is the most important. Remember that with excellent credit comes excellent selections—the world is your oyster!

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Career & Education Credit Education Financial Loans

Can You Pay Off Student Loans with a Credit Card?

paying off student loans with a credit card

Introduction

Though it may sound tempting, as the average person with student loan debt has about $30,000 of it, paying with a credit card is a bad idea long-term. It is technically possible to do this, but it comes highly unrecommended by any financial professional.

What Happens When You Try to Pay Loans with a Credit Card?

First off, federal student loan services don’t let you pay directly with a credit card; you must use an intermediary, which is essentially a middle man for lenders and buyers. The private loan services let you pay directly, but there is often a sizeable fee for doing so.

When you pay student loans with a credit card:

  • You give up student loan protections
    • Includes consolidation, deferment, forbearance, or loan forgiveness
  • Potentially move your debt to a credit product with an even higher interest rate than your student loans
    • Credit card rates sun substantially higher than student loan insurance rates—sometimes by 20% or more
  • You will likely be charged a fee (with interest)

Credit card companies do not design plans that let you pay off debt quickly because it is not lucrative. If you make a student loan payment and don’t pay it off by the time your credit card bill comes, you’ll be charged for interest both through the card and the student loan service.

What are the Best Ways to Use a Credit Card to Pay off Student Loans?

Some cards offer cash back rewards points that you can then use towards your student loans:

  • Look for cards with long-term cash back benefits (these are best for people with excellent credit)
  • If you are paying through an intermediary, make sure your credit card’s rewards program exceeds the intermediary’s fee
    • For example, Plastiq has a 2.85% fee for every transaction, so your card’s rewards program would need to be greater than 2.85% of your total payments
    • As most cards only give 1% to 2% on your purchases, this is fiscally unwise

You also have the option of making a balance transfer, which moves your payment over from the student loan lender and the credit card company.However, you do not often earn rewards with balance transfers.

  • Though you could get a temporary 0% interest rate, it often just buys time until you would have to pay even higher interest
  • Another downside to doing a balance transfer is that there is, of course, a fee—usually near 5%!

If a balance transfer isn’t an option, another is to use a convenience check:

  • These are drawn against your credit limit instead of your bank account
  • The student loan service processes this similarly to any other payment
  • But, you’ll still have to repay the money, and fees start at 3% to 4%

Conclusion

The only time it makes logical sense to pay your loans with a credit card is if you are, beyond a shadow of a doubt, able to pay off your balance in full every month. Or, if you find a card with a no-fee balance transfer that starts off with a 0% APR (annual percentage rate; the amount you pay each year to borrow money) financing, you may also benefit from this practice.But again, this must be paid off immediately lest the costs outweigh the benefits—make sure to stay on top of your loans and credit to avoid paying even more in the long run!

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Financial Loans

Student Loans: The Top Loans For You

Best Student Loans

If you are planning to continue your education, you need to have a way to pay for school. College and universities can rack in high costs and many people take out student loans. Depending on what your living expenses while in school are and how quickly you want to get through your program, you may have to take out a lot of loans.

Public loans are an affordable way to get loans but they may not cover everything, especially if you are attending a private school or program. When you need to take out private loans that cover more than public loans, it is advantageous to look at your options.

Earnest

Earnest is a private loan lender that offers student loans to undergraduate and graduate students. With Earnest, borrowers can choose the length of their loan and how much they pay every month. Borrowers can also refinance their loans if they need to.

Education Loan Finance

Education Loan Finance, or ELF, offers loan refinancing options for undergraduate and graduate programs, including medical, dental, and law school. They also offer loans for students at select institutions.

College Ave

College Ave focuses on offering loans with quick approval. Applications are simple and people are approved for loans instantly. Borrowers can borrow as little as $1,000 or cover the full cost of going to school. Borrowers can also make payments while in school, pay only interest, or make flat payments, depending on what works best for them.

Sallie Mae

Sallie Mae is a consumer bank that also offers loans to cover undergraduate, graduate, and specialty programs. They also have savings programs to help families plan for college. They have loans for medical residency, career planning, and studying for the bar.

Discover

Discover has offered private student loans since 2010. Loans can be as small as $1,000 or cover all of your education costs. Discover loans apply to over 2,000 schools. International loans are also available, though they require a co-signer who is a citizen or permanent resident.

Splash Financial

Splash Financial is a student loan refinancing marketplace. They work with a wide network of banks and financial institutions to provide the best rates possible. They work with federal, private, and Parent PLUS loans.

U-fi

U-fi works with Nelnet to provide private loans and refinancing options to students in all states, except for Vermont. Borrowers can get up to 15 years to repay loans with flexible repayment options.

Laurel Road

Laurel Road has worked with KeyBank since 2019 and specializes in graduate loans. They also offer loan refinancing for several kinds of loans, including parent PLUS loans. Loans are available from $5,000 and up.

Summary

No matter what kind of loan you need or how much you need to be covered, there are private loan lenders that will work with you to ensure that you can pay for school. They will also work with you on repayment or refinancing options. Every situation is different and with some research, you can find the right lender for you.