How To Get a Personal Loan: Your Step-by-Step Guide

Here’s how to get a personal loan in eight steps.

1. Check your credit score and eligibility.

2. Decide how much you need to borrow.

3. Compare lenders and loan terms.

4. Prequalify for the loan.

5. Gather your documents.

6. Submit a formal application.

7. Review and accept the offer.

8. Receive funds and begin repayment.

A personal loan lets you borrow a set amount of money and pay it back in fixed monthly payments. Most personal loans range from $1,000 to $50,000, with annual percentage rates (APRs) from about 6% to 36%, based on your credit, income and lender, according to the Consumer Financial Protection Bureau (CFPB). Terms usually run from two to seven years.

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Before applying, it helps to understand how approval works, what lenders look for and how to compare loan offers.

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Key Takeaways

• How to get a personal loan comes down to eight steps: Check your credit, decide how much to borrow, compare lenders, prequalify, gather documents, apply, review the offer and receive funds.

• Most loans run $1,000 to $50,000 at 6% to 36% APR: Your rate depends on your credit, income and lender, with terms usually of two to seven years, per the CFPB.

• Aim for a 670+ credit score: A FICO score of 670 or higher unlocks more offers and better rates, though some lenders approve scores in the 500s at higher APRs.

• Prequalify before you apply: A soft credit check previews your rate and fees without affecting your score, so compare several lenders first.

• Funding speed varies by lender: Fintech apps can fund within minutes to a day, online lenders within three business days, and banks up to 10.

• Know your loan type: Secured loans use collateral and suit weaker credit, while unsecured loans need good credit but don't put your assets at risk.

Summary generated by AI, verified by MoneyLion editors

Step 1: Check Your Credit Score and Eligibility

Your credit score impacts your ability to get a loan and how much you'll pay for it. Most lenders look for good-to-excellent credit scores, but a few offer personal loans for bad credit. Before applying, review your credit reports from Experian, Equifax and TransUnion, and check your credit score for free through your bank or a credit reporting agency.

Lenders look at more than your credit score. Most personal loan lenders share a core set of baseline rules you need to meet before you apply.

• Age: You must be at least 18 in most states and 19 in Alabama and Nebraska.

• Residency: You need to be a U.S. citizen or a permanent resident with a valid Social Security number or Individual Taxpayer Identification Number (ITIN).

• Income: Lenders want proof of steady income. Minimums vary, but many lenders require at least $20,000 to $25,000 per year.

• Credit score: A FICO score of 670 or higher (considered good) gives you access to more offers and better rates, per FICO. 

• Debt-to-income ratio: Most lenders prefer a debt-to-income (DTI) ratio of 36% or less, per CFPB guidance.

• Bank account: You need an active checking account to receive the funds and set up autopay.

Step 2: Determine How Much To Borrow

Borrowing too little could prevent you from covering the expense you're taking out a loan to pay, while a loan that's too large will cost you unnecessary interest and fees.

• Look at the reason for your loan, whether it's to consolidate debt, pay medical expenses, finance home improvements or get you through an emergency

• Then calculate how much you'll need to meet your goal

Step 3: Compare Lenders and Loan Terms

The next step is to compare personal loan lenders, including banks, credit unions and online platforms, to see which one is the best match for you. Make note of the lenders' APRs, fees, terms and loan eligibility requirements.

Here's a comparison of some top lenders:

Step 4: Get Prequalified for the Loan

Many lenders allow you to prequalify for a loan by providing some basic information about yourself, your income and your credit.

• Most prequalification requests won't impact your credit.

• It will get you an estimate of the rate and origination fees you can expect to pay.

• By prequalifying with several lenders, you can compare offers and choose the one with the best combination of rates, fees and available terms.

Step 5: Gather Required Documents

Once you've selected the best loan, you'll have to fill out an application. The lender will verify the information you provided in your prequalification request by pulling your credit report and reviewing your financial documents, which you should have ready before applying.

Here's what you may need:

• Recent pay stubs

• Tax returns

• Bank statements or other sources of income

• Benefits statements

• Employment verification

• Government-issued ID, such as a driver's license or passport

Step 6: Submit Your Loan Application

You can apply for a personal loan through multiple channels. Pick the one that fits how you like to handle money.

Ways to Apply for a Personal Loan

• Online application: Fill out the lender's web form from a laptop or desktop. Most online lenders give you a decision in minutes.

• Mobile app: Apply from your phone using the lender's app. You can upload documents with your camera and track your loan status in real time.

• Phone application: Call the lender and complete the application with a loan officer. This works well if you have questions or a more complex financial picture.

• In-person application: Visit a branch at a bank or credit union. This option takes longer but gives you face-to-face help.

Loan processing could be delayed while you work with the lender to correct mistakes or add missing information, so be sure to double-check your application details.

Step 7: Review Loan Terms and Accept the Offer

Review your loan documents carefully before accepting the offer.

• Check origination and other fees, the interest rate, payment amount and repayment period.

• Also, note whether you'll have to pay a penalty if you want to pay the loan off early.

If everything looks good, sign the loan documents to accept the loan. Otherwise, consider negotiating with the lender or applying for a loan with a different lender.

Step 8: Receive Funds and Start Repayment

Funding speed depends on the type of lender you choose. Here is what to expect once your loan is approved.

Weekends, bank holidays and identity checks can push your timeline out by a day or two.

Make note of the due date for your first payment. It could be 30 days after finalizing the loan or after you receive the funds. Setting up autopay or payment reminders will help you avoid overdue payments and late fees.

Types of Personal Loans

Several different types of personal loans are available. Here's a side-by-side look at a few:

Secured Personal Loans

• Secured personal loans require collateral such as a car, savings account or even cabinets and other permanent fixtures in your home.

• They're often geared toward borrowers with limited or damaged credit.

• While savings-secured loans may offer lower interest rates because the lender can recover funds directly from your account if you default, other secured loans, like car title loans, often come with higher rates and fees.

Unsecured Personal Loans

• An unsecured personal loan doesn't require collateral. Instead, the lender bases its approval on the strength of your credit, income and debt-to-income ratio.

• Rates are usually higher than loans secured by savings accounts, but you won't have to risk your account or personal property.

Fixed-Rate Personal Loans

• Most personal loans have fixed rates. That is, the rate and payment stay the same for the entire loan term.

• Fixed rates can make budgeting easier over the life of the loan.

Variable-Rate Personal Loans

• Variable-rate personal loans start with a fixed rate for a set period.

• After that, the rate and the payment can increase or decrease periodically, based on the benchmark rate.

• Variable-rate personal loans are not the most common type, and only a few lenders offer them.

Debt Consolidation Loans

• Although any personal loan can be used to pay off credit cards or other high-interest-rate debt, some lenders specifically market their loans as debt consolidation loans.

• Debt consolidation might be beneficial if your loan rate is lower than your credit card rates and you want to eliminate your debt with a single monthly payment.

Secured vs. Unsecured Personal Loans

Here's a summary of how secured and unsecured loans compare.

Pros and Cons of Getting a Personal Loan

Consider the pros and cons of personal loans before you apply.

Tips for Getting Approved for a Personal Loan

• Improve your credit score: Pay your bills on time and avoid taking out new debt before applying.

• Reduce your DTI ratio: Pay down existing debt before submitting your application.

• Borrow only what you need: Choose a loan amount that fits your budget.

• Consider a co-signer: A co-signer may help strengthen your application if your credit isn’t strong enough for approval.

Final Take

• Finding the right personal loan starts with understanding your budget, reviewing your credit, comparing lenders and gathering the right documents before applying.

• Taking time to compare rates, fees and repayment terms can help you choose a loan that fits your financial goals and long-term budget.

How To Get a Personal Loan FAQs

What credit score do you need to get a personal loan?

You need a credit score of at least 580 to qualify with most lenders, and 670 or higher to access the best rates, according to FICO. Some lenders will approve scores in the 500s, but expect higher APRs and smaller loan amounts.

How long does it take to get a personal loan?

Most personal loans fund within one to seven business days. Online lenders and fintech apps often move faster, sometimes the same day, while banks and credit unions can take up to 10 business days.

Can you get a personal loan with bad credit?

Yes, you can get a personal loan with bad credit. Lenders that work with lower scores will charge higher APRs, cap your loan amount and may ask for a co-signer or collateral.

How much can you borrow with a personal loan?

Personal loans usually range from $1,000 to $50,000. A few lenders go up to $100,000 for borrowers with strong credit and high income.

Does applying for a personal loan hurt your credit?

Prequalifying does not hurt your credit because it uses a soft credit check. A formal application triggers a hard inquiry, which can lower your score by a few points and stay on your report for up to 24 months, per Equifax.

Key Terms

• Personal loan: A loan of a set amount repaid in fixed monthly payments, usually over two to seven years.

• Annual percentage rate (APR): The yearly cost of borrowing including interest and fees — the clearest way to compare offers.

• Debt-to-income ratio (DTI): The share of monthly income going to debt. Most lenders prefer 36% or less.

• Prequalification: A soft-credit-check preview of your estimated rate and terms that doesn't affect your score.

• Secured loan: A loan backed by collateral like a car or savings, easier to qualify for but with your asset at risk.

• Unsecured loan: A loan approved on credit and income alone, with no collateral required.

• Origination fee: A one-time charge some lenders deduct from your loan proceeds.

• Fixed vs. variable rate: A fixed rate stays the same for the term; a variable rate can change after an initial period.

Sources

• CFPB: What is a personal installment loan? 

• myFICO: What Is a Credit Score? 

• CFPB: What is a debt-to-income ratio? 

• CFPB: What's the difference between a hard and soft credit inquiry? 

Summary generated by AI, verified by MoneyLion editors

Elizabeth Constantineau, CFHC™, contributed to editing this article.

Photo credit: kzenon / iStock.com

*Fixed rates from 8.74% APR to 35.49% APR. APR reflects the 0.25% autopay discount and a 0.25% direct deposit discount. SoFi Platform personal loans are made either by SoFi Bank, N.A. or, Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 11/03/25 and are subject to change without notice. Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibility-criteria/#eligibility-personal. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 9.99% of your loan amount for Cross River Bank originated loans which will be deducted from any loan proceeds you receive and for SoFi Bank originated loans have an origination fee of 0%-7%, will be deducted from any loan proceeds you receive.

Data is accurate as of July 15, 2026, and is subject to change.