How To Apply Online for a Personal Loan

Key Takeaways

• Start by deciding how much you need to borrow and make sure the monthly payments fit your budget before you apply for a personal loan online.

• Compare lenders on interest rates, fees, repayment terms and prequalification options to find the best deal without hurting your credit score.

• Gather your proof of income documents and Social Security number ahead of time so you can move through the application process faster.

Personal loans are a great solution if you need a lump sum quickly. Whether you want to consolidate debt or make a large purchase, you have many options.

Going to the bank isn't a necessity — you can apply from the comfort of your own home. It's relatively simple, but it requires a bit of prep work to apply for a personal loan online.

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

1. Make a Plan

Figure out how much money you need to borrow and how repayment fits into your budget. Most lenders require you to make monthly payments. Remember that on top of the money you borrow, you'll also be on the hook for interest charges.

It's important you only borrow what you know you can comfortably pay back. Missing payments can tank your credit score and cause you to rack up expensive late fees. Consider getting a co-signer to help your application.

2. Compare Lenders

Shop around to make sure you're getting the best loan terms possible. When you're doing your research, take note of:

• Interest rates

• Fees (origination, missed payments, etc.)

• Lending caps

• Repayment terms

• The option to prequalify

• Lending restrictions (some lenders don't allow personal funds to be used for expenses like education or cars)

3. Gather Your Personal Information

Every lender will ask you for personal information when you apply for a loan. Before you start filling out applications, make sure you have your proof of income documents (paystubs or W-2s) and your Social Security number.

4. Get Prequalified

Most lenders will only publish the range of interest rates that they offer. In order to find out the rate you qualify for, the lender needs to know your credit history, the amount of money you want to borrow and when you can pay it back.

If you get prequalified or preapproved, you can find out what interest rate you qualify for without your credit score being affected. Unfortunately, not all lenders offer this, so make sure you read the fine print before you authorize any credit checks.

5. Accept the Loan Terms

Once you've finished shopping around and found the best lender, finish your application by accepting the terms. Most online lenders can deposit the funds into your account within a few days of your approving your application.

Key Terms

• Personal loan: A lump-sum loan you repay in fixed monthly installments over a set term, typically used for debt consolidation, large purchases or other personal expenses.

• Interest rate: The percentage a lender charges you on the amount you borrow. It determines how much extra you pay on top of your loan balance.

• Origination fee: A one-time charge a lender deducts from your loan amount when it processes and funds the loan. It's usually a percentage of the total borrowed.

• Prequalification: A preliminary check that lets you see the loan terms you may qualify for without affecting your credit score. Not all lenders offer this step.

• Co-signer: A person who agrees to repay your loan if you can't. Adding one can help you qualify or get a lower interest rate.

Sources:

• Consumer Financial Protection Bureau — Personal Loans: https://www.consumerfinance.gov/ask-cfpb/what-is-a-personal-loan-en-1627/

• Consumer Financial Protection Bureau — What is an origination fee?: https://www.consumerfinance.gov/ask-cfpb/what-are-mortgage-origination-fees-en-1955/

• Federal Trade Commission — Co-signing a Loan: https://consumer.ftc.gov/articles/co-signing-loan

• Consumer Financial Protection Bureau — Prequalification vs. preapproval: https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-mortgage-prequalification-and-a-preapproval-en-129/

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