If you want to get a personal loan, the safest approach is to understand your borrowing need, review your finances, compare several offers, and evaluate the total cost before signing. A personal installment loan generally provides a lump sum that is repaid through scheduled installments over an agreed period.
Approval and pricing can depend on factors such as your credit profile, income, existing debts, requested loan amount, repayment term, and the lender’s underwriting standards. There is no single credit score, income level, or debt-to-income ratio that guarantees approval with every lender.
This guide explains nine practical steps to get a personal loan, including requirements, credit checks, APR, fees, prequalification, lender comparisons, scam warnings, approval, and repayment.
For broader money-management preparation, review our personal finance complete guide and strategies for financial success.
Key Takeaways
- Borrow only what you reasonably need and can repay.
- Check your credit reports before submitting applications.
- Compare APR, fees, term, monthly payment, and total repayment cost.
- Prequalification may use a soft inquiry, but verify the lender’s process first.
- A formal application may involve a hard credit inquiry.
- Personal-loan fees and documentation requirements vary by lender.
- Do not assume the lowest monthly payment produces the lowest total cost.
- Never pay someone merely for a promise of guaranteed loan approval.
- Read the final loan disclosures before accepting the debt.
1. Decide Whether You Should Get a Personal Loan
Before you get a personal loan, define exactly why you need the money and how much you actually need to borrow.
The Consumer Financial Protection Bureau describes a personal installment loan as a closed-end loan in which the borrower receives money upfront and repays it through scheduled installments over a specified period.
Read CFPB guidance on personal installment loans.
Identify the purpose of the loan
Personal loans may be used for purposes such as:
- debt consolidation;
- unexpected expenses;
- major repairs;
- planned home projects;
- medical or family expenses; or
- other permitted personal uses.
A lender may restrict certain uses, so verify the permitted purpose before applying.
Separate necessary borrowing from optional spending
Taking on installment debt for a necessary repair is different from borrowing for discretionary spending.
Before borrowing for a non-essential purchase, compare the immediate benefit with the interest and fees you will pay over time.
Our top financial tips can help you evaluate spending priorities before adding new debt.
Calculate how much you actually need
Estimate the complete expense, then subtract any cash you can reasonably use without exhausting money required for bills or emergencies.
Borrowing more than necessary can increase both the payment and total finance cost.
If the loan is for a specific home project, compare the borrowing decision with our pool financing guide.
2. Review Personal Loan Requirements
Personal loan requirements vary among banks, credit unions, online lenders, and other financial institutions.
The CFPB identifies factors that lenders may consider when determining personal installment loan terms, including credit reports and scores, income, debts, requested amount, loan length, applicable state law, and other financial information.
Credit history
Your credit reports show information about existing and past credit accounts, payment history, balances, inquiries, and certain public-record information.
Lenders can use this information along with their own underwriting standards when evaluating an application.
Income and ability to repay
A lender may ask for information that helps it evaluate whether your income is sufficient for the proposed obligation.
Possible documentation may include:
- pay statements;
- tax documents;
- bank statements;
- benefit or other income records; or
- other documents appropriate to the applicant.
Do not assume every lender requires exactly the same documents or a fixed number of years of tax returns.
Existing debts
Lenders may evaluate how much debt you already carry relative to your income and other financial obligations.
There is no single debt-to-income threshold that guarantees approval across all personal-loan providers.
Identity and other eligibility requirements
The lender may need to verify your identity, address, legal capacity to enter the contract, and other eligibility information.
Exact requirements depend on the lender, product, jurisdiction, and applicant.
If collateral might help you qualify, our secured personal loan guide explains how secured borrowing differs from an unsecured loan.
3. Check Your Credit Before Applying
Reviewing your credit first can help you understand what lenders may see before you get a personal loan.
Review your credit reports
You can obtain your official credit reports through AnnualCreditReport.com.
Look for information such as:
- accounts you do not recognize;
- incorrect balances;
- incorrect payment history;
- duplicate accounts; or
- other inaccurate information.
If you believe information is incorrect, follow the appropriate dispute process rather than assuming it will automatically disappear.
Understand hard and soft inquiries
The CFPB explains that a hard inquiry commonly occurs when you formally apply for new credit and can affect your credit score. A soft inquiry does not affect your credit score.
Read CFPB guidance on credit inquiries.
Prequalification does not always work the same way
Many lenders advertise prequalification using a soft inquiry, but do not assume that every lender follows the same process.
Before entering sensitive information, confirm whether the rate check will create a soft or hard inquiry.
Prequalification is also not final approval. The lender may need additional documentation and may change the offered amount, APR, or term after completing underwriting.
For more preparation strategies, see our personal finance course guide.
4. Compare Personal Loan Options
The next step is to compare personal loan options from several legitimate providers.
Possible sources include:
- banks;
- credit unions;
- online lenders; and
- other licensed consumer lenders.
No lender category automatically provides the best rate for every borrower.
Compare personalized offers rather than advertising alone
An advertisement for low interest personal loans may display a rate available only to applicants meeting particular conditions.
Use the actual offer made to you rather than the lowest advertised rate when comparing costs.
Our personal loan rates guide provides more context on how loan pricing can vary.
Secured vs unsecured loans
Many personal installment loans are unsecured, meaning the loan is not backed by a specific asset.
Some lenders also offer secured borrowing. A secured loan may use eligible collateral, which creates the risk of losing that asset if contractual obligations are not met.
Read our secured personal loan guide before comparing secured offers.
Compare term length
A longer repayment term can reduce the required monthly payment, but it may increase total interest because the balance remains outstanding longer.
A shorter term may reduce total interest but create a larger required payment.
The best structure is one that fits your budget without unnecessarily extending the debt.
5. Compare APR, Fees and Total Cost
When you compare personal loan offers, do not focus only on the interest rate.
Interest rate
The interest rate represents the cost charged for borrowing the principal.
APR
APR is designed to provide a broader annualized measure of borrowing cost by incorporating the interest rate and applicable finance charges.
This makes personal loan APR especially useful when comparing offers with different fee structures.
Loan fees
The CFPB notes that personal installment loans can include charges such as:
- origination fees;
- documentation fees;
- late fees;
- certain insurance-related charges; and
- other costs permitted by the agreement and applicable law.
Read CFPB guidance on personal installment loan fees.
Origination fees can affect net proceeds
Some lenders may deduct an origination charge from the loan proceeds, while other pricing structures can work differently.
For example, if a lender approves a hypothetical $10,000 loan and deducts a 5% origination charge from proceeds, the borrower would receive $9,500 before considering any other applicable items.
That example does not mean every lender charges 5% or deducts the fee in the same manner.
Our finance charge guide explains borrowing costs in more detail.
Use a personal loan calculator
A personal loan calculator can estimate how loan amount, rate, and term affect the payment and total interest.
For example, consider a hypothetical $10,000 loan at a fixed 10% annual rate with no fees:
| Term | Approx. Monthly Payment | Approx. Total Interest | Approx. Total Payments |
|---|---|---|---|
| 24 months | $461.45 | $1,074.78 | $11,074.78 |
| 36 months | $322.67 | $1,616.19 | $11,616.19 |
| 48 months | $253.63 | $2,174.04 | $12,174.04 |
| 60 months | $212.47 | $2,748.23 | $12,748.23 |
Illustration only. Assumes a fixed 10% annual rate, scheduled monthly payments, and no fees or missed payments. It is not a current lender quote.
The example shows why a smaller payment does not automatically mean a cheaper loan.
For broader budgeting principles, use our personal finance guide.
6. Learn How to Apply for a Personal Loan
Once you identify a suitable offer, the next step is understanding how to apply for a personal loan.
Gather likely information
A lender may ask for:
- identity information;
- contact information;
- income information;
- employment or income-source details;
- housing information;
- existing debt information;
- banking details for funding or payments; and
- supporting documents.
Requirements vary. Follow the actual lender’s checklist rather than uploading unnecessary sensitive documents.
Submit accurate information
Errors or inconsistent information can delay underwriting or require additional verification.
Review names, addresses, income figures, requested amount, and other entries before submitting.
Understand the credit authorization
A formal application commonly authorizes the lender to review your credit.
Read the authorization so you understand whether a hard inquiry will occur.
Apply only through a verified channel
Use the lender’s genuine website, app, telephone number, or physical branch.
Do not enter Social Security, bank-account, or identity information through an unsolicited link without verifying the company first.
7. Avoid Personal Loan and Advance-Fee Scams
Scams become especially important when consumers search for fast online personal loans or guaranteed approval.
Understand the advance-fee distinction
The FTC warns against companies that promise a loan regardless of credit history and then demand money upfront in exchange for guaranteed financing.
Read FTC guidance on advance-fee loan scams.
However, it would be incorrect to say that every legitimate lender is prohibited from charging an application or processing-related fee. The FTC specifically notes that real lenders can charge certain fees.
The warning sign is a company demanding payment for a promise or guarantee that you will receive credit.
Common warning signs
- guaranteed approval before underwriting;
- claims that credit history never matters;
- pressure to pay immediately;
- requests for unusual payment methods;
- an unverifiable company identity;
- no clear loan disclosures;
- unsolicited high-pressure calls or messages; or
- requests for sensitive information through suspicious links.
Verify the lender
The FTC recommends checking whether a lender is registered where it does business and researching complaints or scam reports.
Do not rely on a professional-looking website alone.
8. Understand the Personal Loan Approval Process
The personal loan approval process begins after the lender receives the information needed to evaluate your application.
Underwriting
The lender may verify information concerning your:
- identity;
- credit;
- income;
- debts;
- banking information; and
- other eligibility factors.
The lender may approve the requested loan, deny it, or potentially offer different terms.
Approval does not always equal the amount you requested
You may receive an offer with a different:
- loan amount;
- APR;
- interest rate;
- term; or
- monthly payment.
Do not accept an alternative merely because financing is available.
Processing times vary
Some lenders use automated systems while other applications require additional review.
Avoid publishing a universal “instant approval” or fixed funding-time promise unless a specific lender currently guarantees that result under clearly stated conditions.
If your application is denied
Federal rules require lenders to provide information concerning an adverse credit decision.
The CFPB explains that an applicant who is denied must receive the main reasons or information about how to obtain those reasons. When the decision is based on a credit report, additional credit-report information and rights can apply.
Read CFPB guidance on denied credit applications.
Use that information to address the problem before submitting unnecessary repeat applications.
Our financial success guide can help with debt and budget planning before reapplying.
9. Review the Final Loan Before You Accept
Before you finally get a personal loan, compare the final contract with the offer you expected to receive.
Check the APR
Verify the APR shown in the lender’s disclosures.
Check the amount financed and proceeds
Confirm how much you are borrowing and how much money you will actually receive after applicable charges.
Check the monthly payment and schedule
Verify:
- payment amount;
- first payment date;
- number of payments;
- repayment term; and
- final scheduled payment.
Check late-payment and returned-payment terms
Understand the contractual consequences of missing a payment or having a payment returned.
Check early-payment terms
Do not assume all personal loans either have or do not have prepayment charges.
Read the actual agreement to determine how early payoff is handled.
Check whether the interest rate can change
Personal installment loan rates can be fixed or adjustable depending on the product.
If predictability matters to you, verify the rate structure before signing.
The CFPB notes that personal installment loan interest rates can be fixed or adjustable, so do not describe every personal loan as a fixed-rate product.
For additional cost comparisons, see our personal loan rates guide.
How to Compare Personal Loan Offers Side by Side
| Detail | Offer A | Offer B | Offer C |
|---|---|---|---|
| Loan Amount | _____ | _____ | _____ |
| APR | _____ | _____ | _____ |
| Interest Rate | _____ | _____ | _____ |
| Origination / Other Fees | _____ | _____ | _____ |
| Net Proceeds | _____ | _____ | _____ |
| Repayment Term | _____ | _____ | _____ |
| Monthly Payment | _____ | _____ | _____ |
| Fixed or Adjustable Rate | _____ | _____ | _____ |
| Late / Returned Payment Terms | _____ | _____ | _____ |
| Early Payoff Terms | _____ | _____ | _____ |
This comparison is more useful than choosing based only on a headline claiming the best personal loan rates.
Managing the Loan After Funding
Your responsibilities continue after you get a personal loan.
Make payments on time
Late or missed payments can lead to fees, collection activity, and negative credit reporting where applicable.
Monitor your statements
Review payments, principal balance, interest, and any fees to make sure the account is being handled correctly.
Contact the lender early if you expect difficulty
The CFPB advises borrowers who cannot make a payment to contact their lender promptly to ask about available options. Possibilities can vary and may include modified payment arrangements, deferment, or forbearance in some situations.
Do not assume autopay always creates a discount
Some lenders offer a rate or payment-related benefit for automatic payments, while others do not.
Verify any claimed discount in the actual offer.
For ongoing budgeting, our personal finance lab and personal finance course can help you organize repayment within a broader plan.
Alternatives to a Personal Loan
Before you get a personal loan, compare alternatives appropriate to the expense.
Use savings where appropriate
Paying cash avoids loan interest, but do not exhaust money needed for essential obligations or emergencies solely to avoid financing.
Ask about a direct payment plan
A medical provider, contractor, creditor, or other provider may offer its own payment arrangement.
Compare the actual cost and terms rather than assuming a payment plan is cheaper.
Consider a balance-transfer offer carefully
For eligible credit-card debt, a promotional balance-transfer card may be an alternative.
Check:
- transfer fees;
- introductory APR period;
- post-promotional APR;
- eligibility; and
- whether you can repay the balance before the promotion ends.
Consider nonprofit credit counseling
A reputable nonprofit credit counselor may help with budgeting and debt-management options.
Be cautious of debt-relief companies that guarantee results or demand prohibited advance payments.
Our financial tips guide can help you compare borrowing with other strategies.
Frequently Asked Questions
How do I get a personal loan?
To get a personal loan, determine the amount you need, review your credit, compare lenders, check eligibility, request preliminary offers where available, compare APR and fees, submit a formal application, and review the final contract before accepting.
What credit score do I need?
There is no universal minimum score for all personal-loan lenders. Credit score is only one factor, and underwriting standards vary.
What documents do I need?
Depending on the lender and applicant, documents can include identity, income, address, bank, employment, tax, or other financial records. The exact requirements vary.
Does prequalification hurt my credit?
A soft inquiry does not affect your credit score. Many prequalification processes use soft inquiries, but confirm with the lender because the process is not identical everywhere.
Does a personal loan application hurt my credit?
A formal application may result in a hard inquiry, which can affect your score. The impact depends on the scoring model and your broader credit profile.
What is the difference between interest rate and APR?
The interest rate represents the cost of borrowing principal, while APR is a broader annualized measure that can include applicable finance charges. Compare APR with APR when reviewing competing offers.
Can personal loans have origination fees?
Yes. The CFPB lists origination and documentation fees among costs that may apply to personal installment loans. Review the lender’s disclosures for your actual fees.
Are online personal loans safe?
Some legitimate lenders operate online, but an online website alone does not prove legitimacy. Verify the lender, use its official secure channel, review required disclosures, and avoid guaranteed-approval or advance-fee scams.
Can I get a personal loan with bad credit?
Some lenders consider applicants with weaker credit histories, but availability, APR, fees, amount, and terms can be less favorable. Compare the complete cost and avoid guaranteed-approval claims.
What happens if my application is denied?
Review the adverse-action information supplied by the creditor. It can help you understand why the request was declined and what issues may need attention before applying again.
Can I use a co-signer?
Some lenders may permit a co-signer or joint applicant. If permitted, understand that the additional person can assume serious legal and financial responsibility for the debt.
Is a lower monthly payment always better?
No. A longer term can reduce the payment but increase the amount of interest paid over time. Compare both affordability and total repayment cost.
Conclusion
Learning how to get a personal loan is less about finding the fastest approval and more about making a disciplined borrowing decision.
Start with the amount you truly need, review your credit, and compare several legitimate lenders. Pay attention to APR, fees, proceeds, repayment term, monthly payment, and total expected cost.
Do not assume prequalification guarantees final approval, do not rely on the lowest advertised rate, and do not pay someone for a promise of guaranteed financing.
Before signing, make sure the final contract matches your expectations and that the payment remains manageable alongside your existing expenses and debts.
If the numbers do not work, declining the offer, borrowing less, improving your financial profile, or considering another solution may be better than accepting unaffordable debt.
Continue with our personal loan rates guide, secured personal loan guide, personal finance guide, and financial success strategies.
