How to Get a Loan as a Young Adult
Getting a hold of your personal finances can be one of the most confusing aspects of becoming an independent adult: how much to save, how much to spend, and the most perplexing of all, of loans! Although loans are designed to temporarily assist you, the concept of loans and interest is complex enough to scare away many young adults. Worse, others will use loans incorrectly. But don’t worry, you won’t be scared or misusing your money: we’ve broken it down for you in non-bank lingo so you avoid making mistakes and learn how to get a loan as a young adult, the right way.
Get a Sense of Your Credit Score
The first step in receiving a loan is getting an idea of where you stand in terms of your credit score and history. Do you have past due bills? Have you ever been evicted? There are a million other factors that can change your credit score; luckily, you don’t have to have all this information memorize! Sites like CreditKarma will give you a fairly accurate number, completely free by just providing some basic information.
If you feel like you need to get a loan as a last resort due to overspending or living beyond your means, check out this article on how to be better at budgeting!
Decide What Kind of Loan You Need
So, you know you need a loan, but what for? This may seem fairly obvious, because there’s likely a concrete reason you are seeking out a loan, but you may have to get more specific than you think in order to understand if you’d get approved!
Some loan types are harder to acquire, such as a large personal loan or business loans, while others may have an easier approval processes; however, those with an easier approval process may come with a much higher interest rate, like an emergency loan would.
Check out this super helpful article on the breakdown of the major loan categories for more information.
Visit a Loan Professional
Depending on your credit score and history, the business and/or individual that you approach for your loan will differ. If you’re a young adult with a better-than-average score and a decent amount of history, you could very well go to the bank that you normally use and seek out that loan; however, if you’re lacking in history, or have many faults and flaws in your credit score, you may want to seek the advice of a professional at a credit union or a loan specific company.
Fear No More
Applying and receiving a loan can be pretty confusing and daunting. The thought of owing your bank money can be enough to scare you away; however, if you try out some of these tips on how to get a loan as a young adult, you’ll be on your way to your first one in no time!
The next step: paying it all off.