Recently, I wrote an article on the best way to pay off your education loan after Job. If you have read it, I have mentioned, I took a $25,000 loan in US and sent it to home country to save good amount of money. The question that might have come to your mind is, Where the hell should I apply to get $25,000 Loan ? Which bank should I apply ? How should I build credit history ? What if you don’t have credit history or anything ? I will try to address some these things in this article and how I got my loan and some latest options to get loan even without any credit history.
Importance of Credit History
Credit history in US is of significant importance, if you do not have good history…you are basically screwed…You do not want to commit any mistakes in the beginning (first few months in US) to build your credit history. Read this article on How to build good credit history in US. Anyways, if you have bad credit history, it is not a good idea to apply for a personal loan. It can even ruin your credit history more. You just need to know your credit score and assess how much history you have build before applying.
Which Banks to apply ? National or Local ?
Most of you might have an account in nationalized bank like Chase, Bank of America, US bank…the fact is, I would not recommend applying to the nationalized banks. Simple logic, there is too much hassle there and too many rules to deal with because you are dealing with a big bank on a national level. The odds are you getting approval with decent credit score is relatively less. So, where should you apply ? Ever heard of the credit unions ? Yes, you should apply in credit unions or local banks. Credit unions are very local and they usually deal with local customers and meant for community development and not just mere profit. They will have all the facilities you need and the size of the bank and attention you get is much more. I applied my loan in a credit union and got it approved. So, did my friends…
How to build a good relationship with Banks like Credit Unions ?
When I landed in US for the first time fortunately, I opened an account in a local credit union. I deposited some amount and then did not use it much. After 2 and half years, I called them and asked if I can apply for a personal loan and they said sure. I did some paperwork submitted my pay stubs and I got the loan approved. The reason I say this story is, I opened the account long time ago and had some transactions with them. I have been an old customer for them for 2 and half years…it is basically building the history of the account and not just credit history. Though my credit score was not super high, I got my loan approved because I was an old customer. So, if you plan to take such personal loans, I would recommend you to open one of those accounts in credit unions and do keep doing some transactions and just build some history. You have to be very careful; do not open too many bank accounts, unless needed.
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No Credit History ? International Students/ Work Visa holders – Personal or Education Loan ?
One of the promising Y-Combinator funded fintech startups founded by international students, who went through the same journey, has an option for international students/ working professionals to get personal/education loan. You can get loan for financing your re-financing your education loan, close our your credit cards, pay for your relocation, spouse education, etc. You can get loan anywhere from $1,000 USD to $25,000 USD depending on your eligibility, even without credit history. You also build credit history, if you get loan approved. We have partnered with them, you can Apply for Personal Loan / Education Loan at Stilt
Overall, just do not screw up your credit history by applying to every card that comes in mail. Try to build good credit history and if you have plans to take personal loan, open an account in a small credit union and build some history. Once you are prepared, at the right time with right credit history you can apply for personal loan and you will get it approved without any hassle.
Did you apply for any personal loans in US ? Any experiences ?
Image Credit : http://www.flickr.com/photos/mudricky/1546480135/sizes/m/