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Christine Tait

Last updated: 10/2019

Find the Best Personal Loan for Your Needs

So, you’ve had a long, hard think about the type of finance you want to obtain? If you’ve decided that you want to get a personal loan, the next step is to get the ball rolling. If you don’t have much experience in the financial sector, it can sometimes be hard to understand where is best to start.

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Introduction

How to Get a Personal Loan

It’s important to be aware of the best ways to approach the lending process. If you’re wondering how to get a personal loan, this guide has been made specifically for you. We break down the entire process to make it significantly easier to understand. We want to ensure that our readers know exactly what to expect when they begin their personal loan journey.

It might sound difficult, but getting a personal loan is much simpler than you may think. It doesn’t take very much time to apply for a loan if you know what you’re doing. Make sure to read and review all the information provided in this article prior to making any serious decisions. You don’t want to rush into a decision and make a mistake based off ignorance – all the information you’ll ever need on how to get a personal loan is right here!

Choose the Type of Lender You Want to Work With

The first step in understanding how to get a personal loan is deciding what type of lender you want to work with. In the modern world, you have two main choices when it comes to personal loan lenders. You can opt to work with online lenders or traditional bank lenders. Both of these different lender types have their own advantages, so it’s important to make sure that you know which one is best for you and your situation.

We will explore each of these two lenders below so you can have a better idea about which one may be most suited to you.

Traditional Lender

Traditional lenders are typically large banks that have considerable lending power. These banks are established and provide a lot of the liquidity you see in the lending markets. They typically provide a wide variety of different lending products, which is good for those who want to have a few different options. Banks often have longer applications processes, they will typically want more information from you. They are much more risk averse than some of the newer lenders in the market.

Below we provide a check list of characteristics that will indicate that you should be working with a traditional lender:

  • Face-to-Face Interaction – If you want to meet with your lender and have face-to-face interaction to help guide you through the lending process, traditional lenders will often be your best options.
  • Reputation – Large, traditional lenders typically have longstanding reputations in the industry. They are well-known by regulators and tend to follow strict lending rules that may not be applicable or enforceable on smaller lenders.
  • Other Services – Traditional lenders will provide other services as well, which can be good for someone who is looking for additional services along with their loan. This could also include the fact that your current bank may be a traditional lender. Working with them may be more convenient.
  • Easier to Secure Loan – It is much easier to secure a loan against an asset if you work with a traditional lender. These types of lenders are much readier to accommodate a complicated secured loan than an online lender might be.

Online Lender

Online lenders on the other hand are relatively new to the game. They provide their clients with a different approach to lending. They don’t have physical locations, so the entire process is taken care of online. You have to apply through their website’s portal. It’s very important that you understand the differences between these two lenders. Online lenders tend to be more niche, so they offer different types of benefits. They are less conservative with their money, as they are competing heavily with one another. You will find there is plenty of opportunity to borrow from these types of lenders.

Below are some characteristics that will indicate whether or not you would be likely to enjoy working with an online lender:

  • Fast Application – Online personal loan applications tend to be much quicker than traditional loan applications. You will be pleased to find that many applications take less than ten minutes, which is a considerably short time when compared with other traditional lenders.
  • Fast Decision – You will also tend to find out if you have been approved in just a matter of minutes. On the other hand, many traditional lenders can take days or weeks to provide you with the approval you need to move forward.
  • Fast Capital – It’s not just the application that is fast, you will also get your money quite quickly if you end up working with an online lender. Many provide capital within 24 hours of approval. They do so with electronic bank transfers.
  • More Flexible – At the end of the day, online lenders are much more flexible. They provide loans to people with many different credit scores, you’ll be sure to find someone that is willing to lend to you regardless of your background. Now this doesn’t mean you’ll be able to get a 400 credit score personal loan but you never know.

Uses for Small Personal Loans

There are a variety of different reasons that people end up getting personal loans. Small personal loans can be used for a variety of different things. There aren’t any restrictions on what you can use your personal loan for. So, using it for a variety of different reasons isn’t an issue. We thought it might be useful to outline some different ways our readers use small short term loans. Check it out below.

Once you have found various lenders that are offering good rates and low fees, it’s time to determine who the most reputable company is. Head to Consumer Affairs or the Better Business Bureau to see which lenders have the best reputation. These companies provide their readers with the ability to review other firms they have worked with. They ensure that you don’t get ripped off by a company that doesn’t act ethically. It’s important to work with a firm that has a great reputation. Not handling customers well is a bigger deal than you think.

While this tends to be a bigger issue in the online lending community, where regulation is limited, it also happens in the traditional lending space. Don’t assume because you’re working with a big bank that they are a great company to work with – always double check before making any financial agreements.

Traditional Lenders

So, if you’ve opted to work with a traditional lender, you’re probably wondering how to get a personal loan. The process is really quite simple, we will explore it in further detail in this section. If you’re wondering how to get a personal loan with a traditional lender, you’ll want to make sure to read this section.

Step 1: Prepare

If you’ve done your due diligence and decided which lender you’re going to work with, the next step is to prepare for your loan application. You should make sure to get all the relevant information together. You will typically need a proof of income, bank statements, SSNs, proof of address, and other forms. You should ask the bank which information you need to bring prior to attending.

If you end up bringig the wrong documents, the whole process will have to begin again. Make sure you know exactly what is needed. Also, check your credit report to make sure you know what your credit score is prior to heading to the bank. You don’t want to have any surprises once you get there, and you should be able to explain everything on your report.

Step 2: Schedule a Meeting

While you can often walk into a bank branch and apply for a personal loan, we suggest that you schedule a meeting so that a lending specialist sets time aside to speak with you. Call your local branch and tell them you’d like to meet in the next few days to discuss a loan – they will most likely suggest an appropriate time.

Step 3: Head to the Bank

On the day of your meeting, head to the bank with all your documents and information. You will most likely have to sit down with a representative and speak to them about your loan. The entire process should take under an hour if you get started on the right foot.

Step 4: Wait for a Decision

If the bank is not able to offer you a decision straight away, they’ll probably have one back to you in the next few days. Don’t hesitate to call up and ask for a status on the loan. Being proactive isn’t a negative trait.

Online Lenders

If you’ve opted to work with an online lender, the process tends to be much simpler. You won’t have to go through as long of an application process. Once you determine which lender to work with, the process is very straightforward. We will discuss it in further detail below:

Step 1: Head Online

Head to the website of the company that you have decided to work with and open the application. You will want to make sure that you already have all the relevant documents available to provide to your lender if they ask for them. As with traditional lenders, you should make sure you know your credit score before you begin applying. You need to be certain you’re eligible in the first place.

Step 2: Submit Application

Enter in all the information they ask for, and make sure to be truthful throughout the process. Not being truthful can in some instances count as fraud. Make sure to take your time carefully filling in the application. The entire process shouldn’t take more than ten minutes in most instances.

Step 3: Get Your Decision

You will typically get a decision back in just a matter of moments. This is a great turnaround time when compared to traditional lenders. Sometimes you may end up not being approved straight away, don’t be worried if it takes them a day to sort through your information. Although this is rare.

Step 4: Organize Transfer

Once you have been approved, you will need to organize a transfer of funds so that you can receive the money that you have been lent. You will typically give them your bank details and they will organize an electronic transfer of funds. This can often take less than 24 hours to complete.

Verdict

If you were trying to find out how to get a personal loan, you should have all the answers you need after reading this guide. As you can see, the process is fairly straightforward once you get the ball rolling. You just need to set aside some time to assess which type of loan and lender is best suited to you. Don’t waste your time – make sure to head straight to finding out what you best options are.

We’ve created a list of the most reputable lenders in the personal loans industry. If you’re having trouble narrowing down who you’d like to work with, make sure to check out the names that we’ve provided. We make sure to provide non-biased assessments for our readers so that people know who to work with.

No matter what you do, don’t apply for multiple loans at once. It can be extremely easy to get ahead of yourself, especially if you’re working with online lenders. Don’t send out more than one application at a time. Lenders can see that you’ve applied for other finance and will view this behavior as suspicious. They don’t want to provide people with money if they believe they are trying to get capital in a hurry – it’s a bad sign.

Lastly, make sure to use your money wisely – borrowing can be great for your financial health if it’s done in the right way!

FAQ

General Personal Loan Questions

This section covers the most common basic questions people have about personal loans. Use this section to get a better understanding of how personal loans work.

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How do personal loans work?

When you get a personal loan, you get a set amount of money, called your balance. You need to repay the balance plus interest according to your loan repayment schedule worked out with your lender.

How to apply for a personal loan?

You can apply for a personal loan the same way you apply for most financial products. Find a lender you think is right for you and fill out an application.

How much personal loan can I get?

The amount of personal loan you can get depends on lots of factors, like your income, debt to income ratio, credit history, and more. You can use a personal loan calculator to get an estimation of how much you can get from a personal loan.

How long does it take to get a personal loan?

The amount of time it takes to get a personal loan depends on the lender. Many banks can take a few weeks to a few months, while online lenders typically finalize loans in under 24 hours.

How to qualify for a personal loan?

You can qualify for a personal loan by demonstrating that you have the ability to pay the loan back and have a track-record of paying your debts on time through your credit report.

How to get approved for a personal loan?

The best way to get approved for a personal loan is to find a lender who has qualifications you meet. If you meet the basic qualifications, then it’s a good bet that you’ll get approved. Some places offer bad credit loans online guaranteed approval as an option. Be sure to double check reviews of such places to make sure they’re legit.

How many personal loans can you have at once?

There’s no limit to the number of personal loans you can have at once. However, lenders might be unwilling to give you a loan if you already have lots of loans out. So for example some people will take out loans for medical expenses while having other loans for other specific needs at the same time.

How hard is it to get a personal loan?

It can be easy or hard to get a personal loan, depending on several factors. The amount of the loan, why you want a loan, your income, debt to income ratio, and credit score all play a role.

How much can I borrow personal loan?

The amount you can borrow for a personal loan is up to the lender. Most lenders have loan calculators you can use to see how much you can borrow.

How to get a small personal loan?

The best way to get a small personal loan is to focus on lenders that have lower qualifications and lower limits. Peer-to-peer lending networks are usually a good place to look for a small loan. Learn more about how to get a small loan.

How to get a personal loan without a cosigner?

You can get a personal loan without a cosigner by having a decent credit history and a way to pay the loan back.

How to calculate personal loan eligibility?

Each lender calculates personal loan eligibility differently. You should contact them or go to their websites to see if they have a personal loan tracker or pre-approval process.

How to get pre-approved personal loan?

The best way to get pre-approved for a personal loan is to apply for pre-approval. This will let you test your eligibility without getting an inquiry on your credit report.

How to get a personal loan without pay stubs?

Most personal lenders are willing to accept other proof of income, like income tax statements, W2’s, and 1099’s.

How long to get approved for personal loan?

The amount of time it takes to get approved for a personal loan depends on the lender. Most brick and mortar lenders will take one to several weeks, while online lenders will usually return a result within 24 hours.

How to qualify for a small personal loan?

You can qualify for a small personal loan by showing that you will be able to repay the loan and can be trusted to repay the loan. Peer-to-Peer lending networks like SoFi and LendingClub are good options. There are also special programs like micro loans for women.

How easy is it to get a personal loan?

The difficulty of getting a personal loan depends on your situation. Larger loans will be harder to get and getting a loan will be more challenging with a lower credit score.

How can I get personal loan fast?

The best way to get a personal loan fast is to use online lending options. These lenders will fund your loan within 24 hours if you’re approved. Emergency cash loans can come from a number of sources depending on the interest you’re willing to pay.

How to pay off a personal loan quicker?

The best way to pay off a personal loan quicker is to make extra payments on it. Remember, you don’t need to do a full double payment, just pay more than the minimum required payment.

How do unsecured personal loans work?

Unsecured personal loans work by a lender giving you money in return for a promise to pay it back with interest according to a payment schedule. You don’t put up any collateral or security for the loan. Remember there are also unsecured personal loans poor credit options.

Personal Loans and Credit Scores

This section answers the most common questions about personal loans and credit scores.

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How to get a personal loan with bad credit?

Getting a personal loan with bad credit can be a challenge. Your best option is to find lenders that specialize in loans for bad credit. You should expect to pay much higher interest rates on even the best loans for bad credit.

How to get a personal loan with poor credit?

The best way to get a personal loan with poor credit is either to put something up as collateral for the loan or to get a high-interest loan from a company that specializes in loans for people with poor credit. There are even signature loans poor credit options.

How to get a personal loan with no credit history?

You have a few options to get a personal loan with no credit history. The best way is to demonstrate that you’ll be able to pay the loan back by verifying your income. You can also use property or assets as collateral to secure the loan. Take a look at more options for short term loans online no credit check required.

How does a personal loan affect credit score?

A personal loan’s affect on your credit score depends on how you handle it. Your score will drop a bit at first from the new line of credit. However, if you pay your bill on time every month, then your score will go up as the record of on-time payments helps your score.

How to get a personal loan with 500 credit score?

There are lenders that specialize in offering loans to people with poor credit scores. Sofi is one example. You can also try peer-to-peer lending networks that take things other than your credit score into consideration. See more poor credit loan offers.

How to get a personal loan with average credit?

Getting a personal loan with average credit shouldn’t be too much of a problem. You should be ready to verify your income and to shop around to see what lender offers the best rates for your situation.

How much credit score required for personal loan?

There’s no set credit score required for personal loans. Every lender gets to make their own standards. There are lenders that specialize in loans for people with poor or bad credit. It just depends on the lender. According to a Sofi Loans review we recently did for example, you need a score of 680.

How to get a personal loan while in Chapter 13?

Getting a personal loan while in Chapter 13 is going to be difficult. You should talk to your bankruptcy lawyer to see how seeking a loan will affect your bankruptcy case.

How to get a personal loan online with bad credit?

Peer-to-peer lending networks that look at more things that just your credit score are your best option for an online personal loan when you have bad credit. Otherwise look for quick loans online bad credit lenders who specialize in this product.

How can I get a personal loan with fair credit?

If you have fair credit, then it shouldn’t be too hard to get a personal loan. Most banks and almost every online lending company will be willing to offer you personal loans with fair credit rating. Make sure you compare options to get the best deal.

Personal Loans and Interest Rates

We’ll answer your questions about personal loans and interest rates in this section.

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How to calculate personal loan interest?

You can calculate your personal loan interest by taking the interest rate, dividing it by 12, and then multiplying that by the current balance on your loan. That’s how much you’ll pay in interest on your next payment. Personal loans for veterans may have different factors to consider.

How to calculate APR on a personal loan?

You can calculate the APR on a personal loan by adding up the total interest payment you make over the year and dividing that amount by the amount you paid off from your original balance.

How does APR work on personal loans?

APR works on personal loans the same as it does on other financial products. It tells you what you’re paying overall to get the loan, expressed as total money spent on interest and fees in one year.

How to calculate monthly installment for personal loan?

You can calculate the monthly installment for a personal loan by taking the interest rate, dividing it by 12, and multiplying that by the loan balance on the payment date. That will provide the interest. The rest of the installment is the loan balance divided by the number of payments remaining in the term.

How to calculate personal loan rate of interest?

You can calculate a personal loan rate of interest by taking the total amount of interest you’ve paid over a year and dividing it by the total amount you’ve paid on a loan over the year.

Sources of Personal Loans and Specific Types of Loans

This section helps you understand where to get personal loans and provides more information about specific types of personal loans.

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How to get a personal loan from a bank?

Some banks may not be willing to issue personal loans. For those that do, the most important thing is being able to demonstrate that you’ll be able to repay your loan without hurting your other obligations.

How to get a personal loan from a credit union?

You can get a personal loan from a credit union by showing you’ll be able to repay your loan on time. This can include income statements, pay stubs, or other income verification measures.

How much interest do banks charge on personal loans?

The amount of interest a bank charges for a personal loan depends on lots of factors. Your relationship with the bank, the loan amount, why you want the loan, and more can all come into play.

How to transfer bike loan to another person?

The best way to transfer a bike loan to another person is to have the other person take out a new loan that covers the balance of the current loan.

How to get a high-risk personal loan?

The best way to get a high-risk personal loan is to find a high-risk lender. These lenders specialize in providing loans for people with low credit scores or that can’t get loans from other lenders.

How to get a personal loan with low income?

You can get a personal loan with low income if your loan amount is such that your income won’t prevent you from paying it back on time. You can also get a secured loan using property as collateral.

Other Personal Loan Questions

We’ll cover popular personal loan questions that don’t fit into our other categories in this section. Check here if you can’t find your answer anywhere else.

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How to refinance a personal loan?

You can refinance a personal loan by finding offers for loan refinancing. The new lender will pay off your old loan directly and will start billing you for your refinanced loan.

How can I get a personal loan with no job?

It will be difficult to get a personal loan with no job. You’ll need to show the lender that you still have the ability to repay the loan and that your payments will be in full and on time. Sometimes an instant cash loan direct lender will work with you still.

How to transfer a personal loan to another person?

The best way to transfer a personal loan from one person to another is to have the receiver of the loan take out a new loan that covers the balance of the initial loan.

How to settle personal loan?

Settling personal loans can be very tricky. It’s best to consult a lawyer or a debt settlement expert to see what options are available in your situation.

How to structure a personal loan?

There are lots of ways to structure a personal loan. It depends on what works best for the lender and the borrower. Most personal loans have monthly payments that start the month after the loan is distributed.

How to reduce tenure of personal loan?

You can reduce the tenure of your personal loan by making extra payments. Even if you only add a little bit each month, this will lower the amount you pay in interest and let you pay the loan off faster.

How to calculate debt to income ratio for personal loan?

You can calculate your debt to income ratio for a personal loan by taking your total amount of debt and dividing it by your annual income. You can also do this monthly by comparing your monthly bills to your monthly income.

How long do personal loans take to process?

Personal loans can take anywhere from one hour to several days to process, depending on the lender. Online lenders will generally process loans faster than brick and mortar banks. See more options to get a quick loan online.

How to get a personal loan with no bank account?

Getting a personal loan with no bank account is going to be tricky. Your best option might be peer-to-peer lending networks that will send you a check. However, many of these services require some kind of bank account to verify your identity.

How soon can you refinance a personal loan?

There’s usually no limit on how soon you can refinance a personal loan. However, you may want to consult a credit specialist to make sure that your specific situation won’t result in any harmful consequences.

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Christine has a solid background in personal finance as she spent the last eight years working at one of the biggest banks in the US. She managed her own team of financial advisors that helped hundreds of people with their financing needs. Her innate understanding of different financial products and loans helped her move up the ranks quickly after graduating with a degree in Business Administration.