June 23, 2013

In the past, the process of applying for a personal loan was long and complex, and customers usually had to wait for several weeks before the funds of the loan were dispersed. Now, companies have made the process of obtaining a loan swift and easy, and personal loans have more convenient terms and conditions and many more payment options.

The Application:

Many years ago, a customer had to walk into a bank or a financial institution to fill out an application, and usually, the application consisted of four to five pages and included many personal questions.

Today, a person can apply for personal loans online or over the phone, and most applications only have one or two pages.

In addition, several federal laws prevent companies from asking customers certain personal questions, and customers only have to answer questions that directly pertain to their ability to pay back a loan.

The Interest Rates:

Ten years ago, interest rates were much higher than they were today, and the only people who could obtain personal loans with low interest rates were customers who had excellent credit.

During the last several years, increased competition among financial institutions has encouraged most companies to significantly lower their interest rates.

Bad Credit:

During the financial crisis of 2008, most banks wouldn’t offer loans to people who had bad credit, but now, many companies have shifted their focus and are now offering various types of bad credit loans.

Some financial institutions guarantee that they can approve a person for a loan regardless of the customer’s credit score.

The Duration:

Several decades ago, banks did not allow customers to choose the duration of their loans, and if a bank offered a personal loan with a duration of three years, the customer could either take the loan or leave it.

Now, companies allow customers to choose a loan with a duration of one year to ten years, and some companies will even let a customer alter the duration of their loan while they are paying it back.

The Amount:

The amount of the loan that a customer can obtain is no longer based on their credit score. Instead, the amount of the loan is based on the amount of money that the customer earns per month, and many financial institutions now verify a customer’s income before dispersing the loan.


When a company checks a customer’s credit score, that inquiry can lower the customer’s credit score by several points.

Now, many companies preapprove customers for bad credit loans online or over the phone without checking their credit scores.

Dispersal Of The Funds:

Usually, a company will disperse the funds of an approved loan into the customer’s bank account within one or two business days, or the customer can request to have the funds dispersed in the form of a check.

The Terms And Conditions:

In the past, a customer who made a late payment would receive a fee or thirty dollars to forty dollars, and some companies even charged a relatively large fee if a customer payed off a loan early.

Now, customers can pay off loans early with no fees, and many companies allow a customer to make one or two late payments per year without any extra charges.

Improving The Credit Score:

When a customer begins to make payments for a loan, their credit score will improve rapidly.

In the past, customers had to wait for several weeks or even months for a company to report payments to the credit bureaus, but now, companies can swiftly report payments to the credit bureaus online.

When searching for personal loans in today’s world, there are many things to consider. Some of these include the application process, the interest rates, bad credit loans, the duration, the amount, obtaining pre-approval, the dispersal of the funds, the terms and conditions and swiftly improving the customer’s credit score.