Personal loans: Credit Check, Approval process, Lenders, Interest

Personal loans are unsecured financial instruments that offer borrowers flexibility in meeting various financial needs, from debt consolidation to emergency expenses. Unlike secured loans such as mortgages, personal loans do not require collateral, making them a riskier venture for lenders. This risk is often reflected in the interest rate, which can range from 6% to 36% depending on factors like credit score and lender’s policies. The loan amounts generally range from $1,000 to $50,000, and the repayment terms can extend from 2 to 7 years.

For those with bad credit, obtaining a personal loan may seem challenging but is not impossible. Some lenders offer guaranteed approval and no credit check options, although these usually come with higher interest rates and no lender can guarantee approval. The approval process can vary, with some lenders offering instant approval within the same day, particularly in the realm of online direct lenders who deal directly with the borrower, eliminating the need for intermediaries.

To qualify for a personal loan, borrowers must meet certain requirements, including a minimum credit score and proof of income. While the unsecured nature of these loans means that borrowers’ assets are not at risk in the event of a default, it also means that lenders may be more stringent in their eligibility criteria.

Overall, personal loans offer a versatile and often convenient way for individuals to access funds for various needs.

What Is a Personal Loan?

A personal loan is a type of unsecured loan that you can use for almost any purpose. Unlike a mortgage or auto loan, which are secured by the property or vehicle they finance, a personal loan doesn’t require any collateral. This means that the lender can’t automatically take your property if you default on the loan.

Personal loans typically come in amounts ranging from $1,000 to $50,000, with repayment terms between 2 to 7 years. The interest rates can vary widely based on your credit score and other factors, but as of 2023, they generally range from 6% to 36%.

How can I get a Personal Loan with Bad Credit?

Getting a personal loan with bad credit can be challenging, but it’s not impossible. Here are a few strategies you can use:

1. Apply with a co-signer: A co-signer with good credit can help you qualify for a loan that you wouldn’t be able to get on your own. However, this person will be equally responsible for repaying the loan if you fail to make payments.

2. Consider a secured loan: Some lenders offer secured personal loans, which require collateral. These loans can be easier to get if you have bad credit, but remember that the lender can take your collateral if you default on the loan.

3. Shop around: Different lenders have different criteria for approving loans, so it’s worth checking with several lenders to see what kind of loan terms you can get.

According to Experian, some lenders specialize in working with borrowers with bad credit, so don’t let a low credit score discourage you from applying.

How Quick is the Approval Process for Personal Loans?

The approval process for personal loans can vary greatly depending on the lender. Some online lenders offer instant approval and can deposit funds in your bank account within a day or two working days. Other lenders, especially traditional banks and credit unions, may take a few days to a week to process your application.

The entire process, from application to funding, can take anywhere from one day to a week or more. It’s important to apply for a personal loan well in advance of when you need the funds, especially if you’re dealing with a lender that has a longer processing time.

Remember, while a quick approval process can be convenient, it’s still important to shop around and compare loan terms from different lenders. Don’t just go with the first lender that approves you – take the time to find a loan that offers the best terms for your needs.

What Does Guaranteed Approval Mean for Personal Loans?

While no lender can fully guarantee approval, the landscape of personal loans has changed significantly. Today, lenders have a diverse range of requirements, increasing the chances of approval for many potential borrowers. If you find it challenging to get approved, don’t be disheartened.

The solution could be as simple as applying to different lenders or improving your credit score. Each application brings you one step closer to securing the funds you need.

Where Can I Get a Personal Loan with No Credit Check?

In an ideal world, your past financial mistakes wouldn’t affect your current access to credit. Thankfully, there are lenders who understand this and offer no credit check loans from traditional credit bureau. These lenders focus more on your ability to repay the loan rather than your credit history.

Companies such as payday lenders and high-interest loan providers don’t review your credit history or credit score when deciding whether to give you a loan. However, remember that these types of loans often come with higher interest rates and fees. Here’s a list of some potential options:

Where Can I Get a Personal Loan with Instant Approval?

We live in a fast-paced world where time is of the essence. Recognizing this, some lenders offer instant approval for loans. This means the lender disburses funds on the same day or the next day after receiving a loan application from qualified borrowers.

Online personal loan lenders are typically the ones providing this speedy service. While the convenience of instant approval is undoubtedly appealing, it’s crucial to take the time to understand the terms and conditions of the loan before accepting it. Balancing speed with careful consideration ensures you make the best financial decision.

What is a Personal Loan Direct Lender?

A personal loan direct lender is a financial institution or lender that directly provides personal loans to borrowers without the involvement of intermediaries or brokers. This means that the borrower deals directly with the lender from the application process to the repayment of the loan.

Personal loans are typically unsecured loans, meaning they do not require collateral. They can be used for a variety of purposes such as consolidating debt, financing home improvements, or covering unexpected expenses. The loan amount, interest rate, and repayment terms are agreed upon between the borrower and the lender.

Are There Bad Credit Direct Lenders for Personal Loans?

Yes, there are bad credit direct lenders for personal loans. These lenders specialize in providing loans to individuals with poor or no credit history. However, it’s important to note that these loans often come with higher interest rates to compensate for the increased risk the lender is taking on.

According to Experian, a credit score below 580 is considered poor. If you fall into this category, bad credit direct lenders may be an option for you. However, it’s crucial to carefully review the terms and conditions of these loans, as the high interest rates and fees can make them a costly option.

What Interest rate will I get on my personal loan?

The interest rate you’ll get on your personal loan depends on several factors, including your credit score, income, debt-to-income ratio, and the lender’s policies.

As of May 2023, the average personal loan interest rate was 11.48% according to Federal Reserve Bank of St. Louis. Borrowers with excellent credit scores can expect to receive rates on the lower end, while those with poor credit scores may receive rates on the higher end.

Here are some factors that can affect your personal loan interest rate:

• Credit Score: A higher credit score generally leads to a lower interest rate.
• Income: A higher income can indicate to lenders that you’re more capable of repaying the loan, potentially leading to a lower interest rate.
• Debt-to-Income Ratio: This ratio, which compares your monthly debt payments to your gross monthly income, can affect your interest rate. A lower ratio can lead to a lower interest rate.
• Lender’s Policies: Each lender has its own method for determining interest rates, so rates can vary from lender to lender.

Remember, it’s always a good idea to shop around and compare personal loan offers from multiple lenders to ensure you’re getting the best rate possible.

How Do Personal Loans Work?

Personal loans are a type of installment loan that you can use for a variety of purposes, from consolidating debt to paying for a large purchase or home improvement project. Unlike a mortgage or auto loan, a personal loan is typically unsecured, meaning you don’t have to put up any collateral to get the loan. Instead, lenders determine your eligibility based on factors like your credit score, income, and debt-to-income ratio.

When you take out a personal loan, you’ll receive a lump sum of money that you’ll repay in fixed monthly payments over a set period of time. The interest rate on a personal loan is usually fixed, which means it won’t change over the life of the loan.

What Are the Size and Terms of a Personal Loan?

The size of a personal loan can vary greatly depending on the lender and your financial situation. Most personal loans range from $1,000 to $50,000. The terms of a personal loan also vary, but most fall in the range of 2 to 7 years.

The size and terms of your loan will affect your monthly payment and the total amount of interest you’ll pay over the life of the loan. For example, a larger loan or a longer term will result in a lower monthly payment, but you’ll pay more in interest over time. Conversely, a smaller loan or a shorter term will result in a higher monthly payment, but you’ll pay less in interest.

Requirements for Applying for a Personal Loan

While the specific requirements for a personal loan can vary by lender, there are some common criteria that most lenders look for. These include:

• Credit score: Most lenders require a credit score of at least 600, although some lenders may have lower minimums. The higher your credit score, the better your chances of approval and the lower your interest rate will likely be.
• Income: You’ll need to provide proof of income to show that you can afford to repay the loan. This can include pay stubs, tax returns, or bank statements.
• Debt-to-income ratio: This is the percentage of your monthly income that goes towards paying your debts. Most lenders prefer a debt-to-income ratio of 36% or less according to Experian.
• Credit history: Lenders will look at your credit history to see how you’ve handled debt in the past. This includes any late payments, defaults, or bankruptcies.

In addition to these requirements, some lenders may also require a co-signer, especially if you have a low credit score or unstable income. A co-signer is someone who agrees to repay the loan if you can’t, which reduces the risk for the lender.

Remember, it’s important to shop around and compare loan offers from multiple lenders before making a decision. This can help you find the best loan terms and interest rate for your needs.

What Factors Do Lenders Consider for Personal Loans?

When you apply for a personal loan, lenders evaluate several factors to determine your creditworthiness. These factors help them decide whether to approve your loan application and at what interest rate.

Credit Score: Your credit score is a numerical representation of your creditworthiness. According to Experian, a credit score of 670 or above is considered good. Lenders prefer borrowers with high credit scores as it indicates a lower risk of default.

Income: Lenders need to know that you have a steady income source to repay the loan. They may ask for proof of income such as pay stubs or tax returns.

Debt-to-Income Ratio: This ratio compares your monthly debt payments to your gross monthly income. According to the Experian, a debt-to-income ratio of 43% is the highest ratio a borrower can have to qualify for a mortgage. However, for personal loans, lenders may have different thresholds.

Credit History: Lenders also look at your credit history, which includes the length of your credit history, the types of credit you have (credit cards, mortgages, auto loans, etc.), and your history of on-time payments.

Legal Framework for Personal Loans in the USA

In the United States, personal loans are governed by both federal and state laws. These laws protect consumers and ensure fair and transparent lending practices.

The Truth in Lending Act (TILA): This federal law requires lenders to disclose all loan terms, including the annual percentage rate (APR), the total cost of the loan, and any fees or penalties.

The Fair Credit Reporting Act (FCRA): This law gives you the right to an accurate credit report. It requires credit reporting agencies to correct or delete inaccurate, incomplete, or unverifiable information.

State Laws: Each state has its own laws regarding personal loans. These laws may limit the interest rate a lender can charge, regulate how lenders can collect debts, and provide other consumer protections.

How do I apply for a personal loan?

Applying for a personal loan is a straightforward process, but it requires some preparation. Here are the steps you should follow:

1. Check Your Credit Score: Before you apply, check your credit score to ensure you meet the lender’s requirements. You can get a free credit report from each of the three major credit bureaus (Experian, Equifax, and TransUnion) once a year through AnnualCreditReport.com.
2. Compare Lenders: Not all lenders offer the same loan terms or interest rates. Compare several lenders to find the best loan for your needs. Consider factors such as the interest rate, loan term, fees, and the lender’s customer service reputation.
3. Prepare Your Documents: When you apply for a loan, you’ll need to provide several documents, including proof of income, proof of identity, and proof of address. Gather these documents in advance to speed up the application process.
4. Apply for the Loan: Once you’ve chosen a lender, you can apply for the loan. Some lenders allow you to apply online, while others may require you to visit a branch in person.

Remember, it’s important to borrow only what you need and can afford to repay. Always read the loan agreement carefully before signing, and don’t hesitate to ask questions if anything is unclear.

Types of Personal Loans Available

When it comes to obtaining a personal loan, there are several types to choose from. Each type has its own set of conditions, interest rates, and uses. Understanding these differences can help you decide which loan best meets your needs.

• Secured Personal Loans
• Unsecured Personal Loans
• Personal Line of Credit
• Debt Consolidation Loans
• Fixed-Rate Loans
• Variable-Rate Loans
• Co-Signed Loans
• Peer-to-Peer Loans
• Medical Loans

Whether you need funds for home improvements, medical bills, or consolidating debt, there is likely a personal loan that’s right for you.

Secured Personal Loans

Secured personal loans require you to provide collateral, like your home or car, as security for the loan. This usually means lower interest rates and higher borrowing limits, but it also means greater risk, as failure to repay could result in the loss of your collateral.

• Lower Interest Rates
• Higher Loan Limits
• Collateral Required

Secured loans are commonly used for larger projects like home renovations or buying a new vehicle. They can be easier to obtain if your credit score is less than stellar.

Unsecured Personal Loans

Unlike secured loans, unsecured personal loans do not require collateral. This means that the lender is taking on more risk, which is often reflected in higher interest rates.

• No Collateral
• Higher Interest Rates
• Smaller Loan Limits

These loans are generally best for smaller expenses, such as unexpected bills or minor home improvements.

Personal Line of Credit

A personal line of credit is a revolving line of credit, much like a credit card. You can draw from it up to a certain limit and only pay interest on the amount borrowed.

• Revolving Credit
• Flexible Usage
• Interest on Borrowed Amount Only

This type of loan offers a great deal of flexibility, but often comes with higher interest rates.

Debt Consolidation Loans

Debt consolidation loans are a specialized type of personal loan designed to consolidate multiple debts into a single monthly payment with a lower interest rate.

• Consolidate Multiple Debts
• Lower Interest Rate
• Single Monthly Payment

This can make debt management easier and could save you money in the long run, but it’s important to compare the total cost before proceeding.

Fixed-Rate Loans

Fixed-rate loans have an interest rate that remains the same for the entire repayment period. This type of loan is straightforward and makes budgeting easier since the monthly payments remain constant.

• Stable Monthly Payments
• No Fluctuating Interest Rates
• Easy to Budget

Fixed-rate loans are useful for long-term financing needs and are often favored for their predictability.

Variable-Rate Loans

Variable-rate personal loans have an interest rate that can change over time based on market conditions. This means your monthly payments could vary.

• Fluctuating Interest Rates
• Potentially Lower Initial Rates
• Uncertain Monthly Payments

While they can offer lower initial rates, the variability makes them riskier, especially for long-term loans.

Co-Signed Loans

Co-signed loans involve a second party agreeing to pay back the loan if the borrower defaults. This makes it easier for people with poor credit to get approved.

• Higher Chance of Approval
• Potentially Lower Interest Rates
• Financial Risk for Co-signer

The main downside is the risk placed on the co-signer, who becomes responsible for the loan if the primary borrower fails to make payments.

Peer-to-Peer Loans

Peer-to-peer loans are facilitated through online platforms that connect borrowers directly with individual lenders, bypassing traditional financial institutions.

• Online Platform
• Flexible Terms
• Quick Approval Process

These can be great for those who want a more personal lending experience but can sometimes come with higher interest rates.

Medical Loans

Medical loans are designed to cover healthcare expenses, from elective surgeries to emergency procedures. These loans are often unsecured and can range in terms and interest rates.

• Specifically for Healthcare Costs
• Variable Terms
• Unsecured

This can be a good option for unplanned medical expenses when you don’t have sufficient healthcare coverage.

Uses for Personal Loans

Personal loans are versatile financial tools that can be used for a variety of purposes. Here are some common uses:

1. Debt Consolidation: One of the most common uses of personal loans is to consolidate high-interest debt, such as credit card debt. By taking out a personal loan with a lower interest rate, you can pay off your existing debt and save money on interest over time.
2. Home Improvement: Personal loans can be used to finance home improvement projects, such as renovations or repairs. This can be a cost-effective alternative to home equity loans or lines of credit, especially if you don’t want to use your home as collateral.
3. Medical Expenses: If you’re facing high medical bills, a personal loan can help you cover these costs. This can be particularly useful if you don’t have health insurance or if your insurance doesn’t cover all of your expenses.
4. Large Purchases: Personal loans can also be used to finance large purchases, such as a car or a vacation. This can be a more affordable option than using a credit card, especially if you can secure a low interest rate.

Are personal loans with a cosigner an option?

Yes, personal loans with a cosigner are an option. A cosigner is someone who agrees to repay the loan if you can’t. This can be a good option if you have poor credit or a low income, as having a cosigner can increase your chances of approval and help you secure a lower interest rate.

However, it’s important to remember that your cosigner is taking on a significant financial risk. If you fail to repay the loan, your cosigner will be responsible for the debt, which could damage their credit and financial stability.

How do I get the lowest personal loan rates?

Getting the lowest personal loan rates requires a combination of good credit, stable income, and smart shopping. Here are some steps you can take:

• Improve Your Credit: Lenders typically offer the best rates to borrowers with high credit scores. You can improve your credit by paying your bills on time, reducing your debt, and checking your credit report for errors.
• Shop Around: Don’t just accept the first loan offer you receive. Compare rates from multiple lenders to ensure you’re getting the best deal. Online lending platforms can make this process easier by allowing you to compare offers from multiple lenders in one place.
• Consider a Secured Loan: If you’re comfortable using your home or car as collateral, you might consider a secured loan. These loans typically have lower interest rates than unsecured loans, but they also carry more risk. If you fail to repay the loan, the lender can seize your collateral.
• Negotiate: Don’t be afraid to negotiate with lenders. If you have a strong credit profile and stable income, you may be able to secure a lower rate by discussing your options with the lender.

According to the Federal Reserve Bank of St. Louis, the average interest rate for a 24-month personal loan was 11.48% in May 2023. However, rates can vary widely depending on your credit score, income, and other factors. By taking the steps outlined above, you can increase your chances of securing a lower rate.

Which Lenders Offer Personal Loans?

Personal loans are offered by a variety of lenders, each with their own unique terms and conditions.

Traditional Banks

Traditional banks are a common source of personal loans. These institutions include large national banks like Bank of America, Wells Fargo, and Chase, as well as smaller regional and local banks.

Credit Unions

Credit unions also offer personal loans, often at competitive rates. As member-owned nonprofits, credit unions typically offer lower interest rates and more flexible terms than traditional banks. The National Credit Union Administration reports that the average interest rate for a 36-month unsecured loan from a credit union was 10.02% as of 2023 Q1.

Online Lenders

Online lenders have become increasingly popular sources of personal loans. Companies like SoFi, LendingClub, and Prosper offer a quick and convenient loan application process entirely online. Interest rates can vary widely, so it’s important to shop around.

Peer-to-Peer Lenders

Peer-to-peer (P2P) lending platforms connect borrowers directly with individual investors. These platforms, which include companies like Upstart and Funding Circle, can offer competitive rates, particularly for borrowers with good credit.

Differences Between Personal Loans and Payday Loans

Personal loans and payday loans are both types of credit, but they differ significantly in terms of cost, repayment terms, and impact on credit scores.

Cost

Personal loans typically have lower interest rates than payday loans. According to the Federal Reserve Bank of St. Louis, the average interest rate for a personal loan is 11.48 for a 24 month loan as of May 2023. While payday loans can have APRs of almost 400% according to The Consumer Financial Protection Bureau.

Repayment Terms

Personal loans usually have longer repayment terms, often several years, and monthly payments. Payday loans, on the other hand, typically require full repayment within two weeks to a month of the loan issuance.

Credit Impact

Personal loans can help build credit if you make your payments on time, as most lenders report to the major credit bureaus. Payday loans, however, do not typically help build credit and can even harm it if the loan goes into collections.

Differences Between Traditional Personal Loans and Online Personal Loans?

While both traditional and online personal loans can provide you with the funds you need, there are some key differences between the two.

Application Process

Traditional personal loans often require a visit to a bank or credit union and may involve a lengthy application process. Online personal loans, on the other hand, offer a quick and convenient application process that can be completed from the comfort of your own home.

Approval Time

Online lenders often use automated underwriting systems, which can mean you get a decision on your loan application in minutes, and receive funds as soon as the next business day. Traditional lenders, on the other hand, may take several days or even weeks to process your application and disburse funds.

Interest Rates

Interest rates can vary between traditional and online lenders. Online lenders often have less overhead than traditional banks, which can allow them to offer competitive rates. However, the best rates are typically reserved for borrowers with excellent credit. Traditional banks and credit unions may offer lower rates to existing customers or those who have their checking or savings accounts with them.

Advantages and Disadvantages of Personal Loans vs. Credit Cards

Personal loans and credit cards are two popular forms of borrowing, each with their own set of advantages and disadvantages.

What are the Advantages of Personal Loans?

Personal loans are typically unsecured, meaning they don’t require collateral. They offer fixed interest rates, fixed monthly payments, and a fixed repayment period. This predictability can make budgeting easier. The average interest rate for a 24-month personal loan was 11.48% in My 2023, which is typically lower than the average credit card interest rate of 20.68% as of May 2023 according to Federal Reserve Bank of St. Louis.

Advantages of Personal Loans:

• Lower interest rates than credit cards
• Fixed repayment schedule
• No collateral required

What are the Disadvantages of Personal Loans?

On the downside, personal loans can come with origination fees, and they may have higher interest rates than secured loans like home equity loans. Also, because they’re unsecured, lenders often require higher credit scores.

Disadvantages of Personal Loans:

• May have origination fees
• Higher interest rates than secured loans
• Higher credit scores often required

What are the Advantages of Credit Cards?

Credit cards offer flexibility, allowing you to borrow as much or as little as you need up to your credit limit. They also offer rewards, such as cash back or travel points, which personal loans do not.

Advantages of Credit Cards:

• Flexibility in borrowing amounts
• Potential for rewards

What are the Disadvantages of Credit Cards?

However, credit cards typically have higher interest rates than personal loans. According to the Federal Reserve, the average credit card interest rate was 14.75% as of February 2021. They also have variable interest rates, which can make budgeting more difficult.

Disadvantages of Credit Cards:

• Higher interest rates than personal loans
• Variable interest rates

Interest Rates for Personal Loans Compared to Other Loans

Interest rates for personal loans are typically lower than credit cards but higher than secured loans. The average interest rate for a 24-month personal loan was 11.48% as of May 2023. In comparison, the average interest rate for a 30-year fixed-rate mortgage was 7.18% as of 2023-09-14 (according to Federal Reserve Bank of St. Louis), and the average rate for a 4-year new auto loan was 7.59% in May 2023 (according to Federal Reserve Bank of St. Louis).

Impact of Personal Loans on Your Credit Score

Personal loans can have both positive and negative impacts on your credit score. On the positive side, if you make your payments on time, a personal loan can help build your credit history. According to Experian, one of the major credit bureaus, payment history accounts for 35% of your FICO Score.

On the negative side, applying for a personal loan can result in a hard inquiry on your credit report, which can temporarily lower your credit score. Additionally, if you fail to make your payments on time, it can negatively impact your credit score.

In conclusion, personal loans can be a useful tool for borrowing, but it’s important to understand the advantages and disadvantages compared to other forms of borrowing, such as credit cards. It’s also important to understand how personal loans can impact your credit score.

Long-Term Financial Considerations for Personal Loans

When considering a personal loan, it’s important to think about the long-term financial implications.

One of the most important considerations is whether you can afford the monthly payments. If you’re unable to make the payments, you could end up in a worse financial situation than you were in before you took out the loan.

Another consideration is the impact on your credit score. While a personal loan can help improve your credit score if you make your payments on time, it can also hurt your score if you miss payments or default on the loan.

Can Personal Loans Improve Your Creditworthiness?

Yes, personal loans can improve your creditworthiness, but it depends on how you manage the loan. According to Experian, one of the three major credit bureaus, your payment history accounts for 35% of your credit score. This means that making your loan payments on time can have a positive impact on your credit score.

However, it’s important to note that taking out a personal loan also increases your debt-to-income ratio, which can negatively impact your credit score. Lenders typically prefer a debt-to-income ratio of 36% or less.

Additionally, applying for a personal loan results in a hard inquiry on your credit report, which can temporarily lower your credit score. However, the impact of a hard inquiry is usually small and temporary.

What Happens if You Default on a Personal Loan?

If you default on a personal loan, it can have serious consequences. If you fail to make a payment on your personal loan for a certain period of time, typically it means a payment is late by 90 days, you’re considered to be in default. The exact number of days vary between lenders and loan agreements.

Payments a few days late incur late fees but aren’t considered in default. Fees range from $15-$40 or around 5% of the due amount.

After 30 days of non-payment, your lender reports the late payment to credit bureaus, potentially dropping your FICO score by ab substantial amount.

In a study by MyFico, the impact of missing payments on FICO Score 9 was simulated for two individuals, Sophia and Maria, with initial scores of 607 and 793 respectively. Missing a payment by 30 days could lower Sophia’s score to between 570-590 and Maria’s to 710-730. A 90-day late payment could further reduce Sophia’s score to 560-580 and Maria’s to 660-680.

What Happens after you Default on a Personal Loan?

Upon default, your debt either goes to in-house collections or is sold to a third-party collector. Expect various forms of communication aimed at debt recovery.

For unsecured loans, legal action could result in wage garnishment or a lien on assets like your home.

Missed payments harm your credit and stay on your report for seven years, affecting future credit eligibility.

Once you’re in default, the lender can take a number of actions to recover the money you owe. These can include:

• Sending your account to a collection agency
• Taking legal action against you
• Reporting your default to the credit bureaus, which can significantly lower your credit score

In addition, if your loan was secured (meaning you pledged an asset as collateral), the lender has the right to seize the asset.

How to act

Act quickly by contacting your lender to discuss options like short-term payment relief. Being proactive can lessen the impact.

Defaulting on a personal loan can also make it more difficult for you to obtain credit in the future. Lenders view borrowers who have defaulted on past loans as high-risk, and they may be unwilling to lend to you or may charge you higher interest rates.