Personal Financing FAQs
Clear answers to the questions we hear most about personal loans and equipment financing.
What can I use personal financing for?
Personal loans through ImpactFundr can be used for virtually any legitimate purpose. Common uses include: consolidating high-interest debt into a single fixed payment, covering startup costs for a new business before it qualifies for commercial financing, making a real estate down payment, funding home improvements, covering a major medical expense, or having capital reserves available for opportunities as they arise. We do not restrict use the way some lenders do.
Do I need collateral for a personal loan?
No. Our personal loans are unsecured — you do not pledge a home, car, or other asset to qualify. Your approval and rate are based on your creditworthiness: your credit score, income, employment stability, and current debt obligations. Equipment financing is different: the equipment being purchased serves as the collateral, which typically allows for larger amounts and longer terms than unsecured options.
What is equipment financing and how does it work?
Equipment financing is a loan or lease specifically for purchasing commercial or business equipment. The lender pays the vendor (or reimburses you) for the equipment, and you repay the loan in fixed monthly installments over the loan term. At the end of a loan, you own the equipment outright. At the end of a lease, you may have the option to purchase, renew, or return the equipment. The equipment itself serves as collateral, which is why rates and amounts tend to be more favorable than unsecured products.
How is a personal loan different from a business loan?
Business loans are underwritten based on your business — its revenue, age, credit profile, and financial statements. Personal loans are underwritten based on you as an individual — your personal credit score, income, and debt-to-income ratio. This makes personal loans accessible to people who have strong personal credit but whose business is too new or too small to qualify for commercial financing. Personal loans also do not require a business entity to exist at all.
What equipment types can be financed?
We work with lenders that finance a wide range of commercial equipment: construction equipment (excavators, skid steers, cranes), commercial vehicles and trucks, restaurant and kitchen equipment, medical and dental equipment, manufacturing and industrial machinery, farm equipment, HVAC systems, and commercial technology and software. Both new and used equipment can be financed. If you have a specific piece of equipment in mind, let us know and we will tell you whether we can find a match.
Can I get a personal loan if I am self-employed?
Yes. Self-employed borrowers can qualify using their tax returns as income documentation instead of pay stubs. Most lenders want to see one to two years of self-employment income on federal tax returns. If your tax returns show lower income because of deductions, this can sometimes affect the loan amount you qualify for. In those cases, we discuss alternative documentation options with the lender.
How is the interest rate on a personal loan determined?
Your interest rate is primarily driven by your credit score, but loan amount, repayment term, debt-to-income ratio, and income stability also factor in. Borrowers with 720+ scores and stable income typically receive rates in the 5% to 9% range. Rates for borrowers with scores in the 650-680 range are typically in the 12% to 18% range. Terms of 1 to 10 years are available, and longer terms reduce your monthly payment while increasing total interest paid.
Can I use a personal loan to fund my business if it is brand new?
Yes, and this is actually a very common approach. Many startups use personal loans to fund initial business expenses — equipment, inventory, working capital, or deposits — before the business has the track record to qualify for commercial financing on its own. Once the business has 6 to 12 months of revenue history, you can often refinance into a business loan at that point.
What happens if I want to pay off my personal loan early?
Many lenders allow early payoff with no penalty. Some charge a prepayment penalty — typically a percentage of remaining balance or a few months of interest. We disclose the prepayment terms on every offer we present so you know exactly what you are agreeing to. If early payoff is likely, we prioritize lenders with no prepayment penalty when shopping your file.
Will a personal loan show up on my credit report?
Yes. Personal loans are reported to the three major personal credit bureaus — Equifax, Experian, and TransUnion. On-time payments build positive payment history, which helps your score over time. Missing payments will damage your credit. For most borrowers with strong payment habits, a personal loan adds a positive installment account to their mix of credit, which can actually improve their overall credit profile.
Have more questions?
Contact us or apply and a specialist will walk you through your options personally.