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The personal loan industry has changed drastically in the past few years. Now, you can apply for a personal loan from the comfort of your home and get approved in minutes. Even better, your loan can be disbursed to you in just a few days.
How to get a personal loan in five simple steps:
- Review your credit report
- Meet the minimum requirements to qualify
- Compare multiple personal loan lenders
- Use a personal loan calculator
- Choose your loan
1. Review your credit report
Personal loans and debt consolidation loans are unsecured, meaning you don’t have to put up any property as collateral. Because no collateral is needed, lenders will look at your credit score and income to decide whether or not to offer you a loan. This will also help them decide which interest rate you qualify for.
It’s a good idea to review your credit report ahead of time and look for any errors or inaccuracies on it that may be damaging your credit. You can view your credit report from each of the three credit bureaus once a year for free at AnnualCreditReport.com.
If your credit report or credit score has issues, focus on improving your credit before moving forward with the loan process.
2. Meet minimum requirements to qualify
Next, review common requirements from personal loan lenders to ensure you meet their minimum qualifications. In general, you’ll need to have a credit score of at least 620 to qualify for a loan. However, the lowest interest rates on an unsecured loan are reserved for borrowers with good credit or excellent credit.
Lenders will also look at your debt-to-income ratio (DTI) to see if you can comfortably afford your payments. Although each lender has their own eligibility criteria they take into consideration when deciding whether to approve your loan application, in general, they look for borrowers to have a DTI ratio under 40%.
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3. Compare multiple personal loan lenders
Before you take out a personal loan, it’s important to shop around and consider as many lenders as possible. This way, you can find the right loan for your needs.
Credible makes this easy: You can compare your prequalified rates from our partner lenders in the table below in two minutes — without hurting your credit.
|Lender||Fixed rates||Loan amounts||Min. credit score||Loan terms (years)|
|9.95% - 35.99% APR||$2,000 to $35,000**||550||2, 3, 4, 5*|
|6.79% - 17.99% APR||$10,000 to $50,000||700||3, 4, 5, 6|
|4.99% - 35.99% APR||$2,000 to $50,000||600||3, 5|
|5.99% - 24.99% APR||$2,500 to $35,000||660||3, 4, 5, 6, 7|
|7.99% - 29.99% APR||$10,000 to $35,000||Not disclosed by lender||2, 3, 4, 5|
|7.04% - 35.89% APR||$1,000 to $40,000||600||3, 5|
|9.99% - 35.99% APR||$2,000 to $36,500||580||2, 3, 4|
|2.99% - 19.99% APR||$5,000 to $100,000||660||2, 3, 4, 5, 6, 7
(up to 12 years for home improvement loans)
|6.99% - 19.99% APR1||$3,500 to $40,0002||660|
(TransUnion FICO®️ Score 9)
|3, 4, 5, 6, 7|
|18.0% - 35.99% APR||$1,500 to $20,000||None||2, 3, 4, 5|
|5.99% - 24.99% APR||$5,000 to $40,000||600||2, 3, 4, 5|
|4.99% - 17.99% APR||$600 to $50,000 |
(depending on loan term)
|660||1, 2, 3, 4, 5|
|6.95% - 35.99% APR||$2,000 to $40,000||640||3, 5|
|6.99% - 21.78% APR10||$5,000 to $100,000||Does not disclose||2, 3, 4, 5, 6, 7|
|8.93% - 35.93% APR7||$1,000 to $20,000||560||3, 5|
|5.94% - 35.97% APR||$1,000 to $50,000||560||2, 3, 5, 6|
|4.37% - 35.99% APR4||$1,000 to $50,0005||580||3 to 5 years4|
What to consider when comparing lenders
Here are several important points to keep in mind as you weigh your personal loan options:
- Pay attention to loan amounts. With a personal loan, you can typically borrow $600 up to $100,000 or more, depending on the lender.
- Keep an eye on fees. Some lenders charge fees on personal loans — such as origination fees, application fees, or late fees. These can increase your overall loan cost. Keep in mind that if you take out a loan with one of Credible’s partner lenders, you won’t have to worry about prepayment penalties.
- Know which loan repayment term you need. You’ll generally have one to seven years to repay a personal loan, depending on the lender. While a long-term personal loan could get you a more affordable monthly payment, it also means you’ll pay more in interest over time — which is why it’s usually best to choose the shortest term you can afford. Many lenders also offer better rates to borrowers who opt for shorter terms.
- Compare interest rates. Interest rates vary from lender to lender, and you might be able to qualify for a much lower rate by choosing one lender over another. Getting quotes from as many lenders as you can help you find a good deal on a loan much more easily. Also keep in mind that some lenders offer rate discounts that could save you money on a loan — for example, you might get a discount by signing up for automatic payments.
- Consider a cosigner. If you have bad credit or don’t have an established credit history, adding a cosigner to your application could help you qualify for a loan — and might also get you a lower interest rate than you’d get on your own. However, not all lenders allow cosigners on personal loans, so check with each lender.
- Decide how soon you need your money. How quickly you can get your funds will depend on the lender — online lenders usually take about five days while traditional banks and credit unions could take up to two weeks. There are also some lenders that will fund loans as soon as the same or next business day after approval.
4. Use a personal loan calculator
It’s important to consider how much a personal loan will actually cost you before you borrow. This way, you can be prepared for any added expenses.
You can use our personal loan calculator below to estimate your monthly payments. Simply enter the loan amount, interest rate, and loan term to see how much you’ll pay over the life of the loan.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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5. Choose your loan
Once you’ve found a lender that works for you and have considered your estimated loan cost, you can move forward with the loan application process. In most cases, you can apply for online personal loans in just a few minutes.
Generally, you’ll have to provide the following information:
- Phone number
- Email address
- Social Security number
- Employer name
- Monthly rent or mortgage payment
Some lenders will ask you for documentation of your income, such as a W-2 or recent paystub. And, you will usually have to submit a copy of your driver’s license (or passport) and enter your account number and routing number for your bank account, as well.
Most online lenders will give you a decision right away. If approved, you can have the funds deposited into your account within a few business days.
Key terms to know when shopping for a personal loan
Here are some common terms that you’ll likely come across while weighing your personal loan options:
- Expected loan amount: This is the amount you’d like to borrow with a personal loan. It doesn’t take into account any fees that could reduce how much you actually get.
- APR: A loan’s annual percentage rate (APR) is the cost you’ll pay each year in return for borrowing money expressed as a percentage. It includes the loan’s interest rate as well as any fees. The higher your APR, the more you’ll pay over the life of the loan.
- Fixed interest rate: Personal loans come with fixed interest rates, which means your rate and payment will stay the same throughout the life of the loan.
- Secured or unsecured loan: Most personal loans are unsecured, which means you don’t have to worry about collateral. There are also some lenders that offer secured loans that require collateral, such as a vehicle or jewelry. Because secured loans are less risky for lenders, they tend to come with lower rates compared to unsecured loans. However, if you can’t make your payments, you could lose your property.
- Origination fee: This is a type of administrative fee commonly charged by lenders in return for providing personal loans. It covers various expenses that come with lending, such as the cost of processing your application, underwriting, funding, and other administrative services. An origination fee usually ranges from 1% to 10%, depending on the lender, and is deducted from your loan amount before the funds are disbursed.
- Prepayment penalty: This kind of fee is assessed when a borrower pays off their loan ahead of schedule. Keep in mind that if you take out a personal loan with one of Credible’s partners, you won’t have to worry about prepayment penalties.
Applying for a personal loan
Following the steps listed above can help you find a personal loan to works best for your needs. Remember to:
- Review your credit report. If you find any errors, dispute them with the appropriate credit bureau to potentially boost your credit score.
- Meet the minimum requirements to qualify. Most lenders require borrowers to have good to excellent credit, verifiable income, and a low DTI ratio. Keep in mind that if you don’t meet the minimum requirements on your own, applying with a creditworthy cosigner might increase your chances of approval.
- Compare multiple personal loan lenders. Many lenders allow you to see your personalized rates with only a soft credit check that doesn’t hurt your credit — for example, you can check your prequalified rates from Credible’s partner lenders with no impact on your credit.
- Use a personal loan calculator. Be sure to consider how much a loan will cost you over time — for example, taking into account both interest as well as any potential fees. You can estimate how much you’ll pay for a loan using our personal loan calculator.
- Choose your loan. After comparing lenders and estimating your loan cost, pick the loan option that works best for you and submit a full application. Be prepared to submit any required documentation, too, such as tax returns or pay stubs. If you’re approved, the lender will have you sign for the loan so the funds can be released to you. The time to fund for a personal loan is usually about one week – though some lenders offer faster loan funding.
If you’re ready to find a lender, Credible can help: You can see your prequalified rates from multiple lenders in two minutes after filling out a single form.