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

A personal loan is a lump sum of money you borrow from a bank, credit union or online lender and pay back in fixed monthly payments, usually over two to seven years. Most personal loans are unsecured, which means you don't need to put up collateral like a car or a house to get one.

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

• Check your credit score and eligibility.

• Decide how much you need to borrow.

• Compare lenders and loan terms.

• Prequalify for the loan.

• Gather your documents.

• Submit a formal application.

• Review and accept the offer.

• Receive funds and begin repayment.

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Most personal loans range from $1,000 to $100,000, 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). 

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 do you get a personal loan? In eight steps, starting with your credit: Check your score and eligibility, decide how much to borrow, compare lenders, prequalify, gather documents, apply, accept and get funded.

• Most personal loans are unsecured: You borrow a lump sum and repay it in fixed monthly payments, usually over two to seven years, with no collateral required.

• Rates run roughly 6% to 36%: Your APR depends on your credit, income and lender, per the CFPB — a score of 670 or higher earns the lowest rates.

• Prequalifying won't hurt your credit: It uses a soft inquiry to estimate your rate, while the full application triggers a hard inquiry that can dip your score a few points.

• Funding speed varies by lender: Fintech apps can fund within minutes to a day, while banks and credit unions may take up to a week or more.

• Borrow only what you need: A loan that's too large costs unnecessary interest, so match the amount to the expense and your budget.

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: Most lenders look for a credit score of 580 or higher, but a score of 670 or above will help you get the lowest APR. Some lenders work with scores below 580, though the rates and fees will be higher.

• 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.

What You Need Before You Apply

Have these five items ready before you start your application to speed things up.

• Proof of income: Recent pay stubs, W-2s or tax returns.

• Government-issued ID: Driver's license, passport or state ID.

• Social Security number: Needed for the credit check.

• Proof of address: A utility bill, lease or bank statement from the last 60 days.

• Minimum credit score of 580: Higher scores get better rates.

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.

Compare these lenders side by side to see which one matches your credit score and how much you want to borrow.

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.

How Much Will Your Monthly Payment Be?

Here’s what a personal loan could cost you each month at a 12% APR on a five-year term.

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 get the best rates. Scores below 580 can still work with some online lenders, but expect higher APRs and added fees.

How long does it take to get a personal loan?

Most personal loans are funded in one to seven business days. Online lenders often send the money the same day or the next business day, while banks and credit unions can take up to a week.

Can you get a personal loan with bad credit?

Yes, you can get a personal loan with bad credit, but your options are limited. Look for lenders that accept scores under 580, add a co-signer or apply for a secured loan to improve your chances.

How much can you borrow with a personal loan?

You can borrow between $1,000 and $100,000 with most personal loans. The exact amount depends on your credit score, income and the lender's limits.

Does applying for a personal loan hurt your credit?

Prequalifying does not hurt your credit score because it uses a soft credit check. Once you submit a full application, the lender conducts a hard inquiry, which can temporarily lower your score by a few points.

Key Terms

• Personal loan: A lump sum borrowed from a bank, credit union or online lender, repaid in fixed monthly payments.

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

• Secured loan: A loan backed by collateral like a car or savings account, often easier to qualify for.

• Annual percentage rate (APR): The yearly cost of borrowing, including interest and most fees.

• Prequalification: A soft-inquiry estimate of your rate and terms that doesn't affect your credit.

• Origination fee: An upfront charge some lenders deduct from your loan proceeds.

• Debt-to-income ratio (DTI): Your monthly debt payments divided by gross monthly income; many lenders prefer 36% or less.

• Hard inquiry: A lender's full credit check at application, which can temporarily lower your score.

Sources

• CFPB: What is a personal installment loan? 

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

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

• CFPB: Checking your credit report 

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 August 17, 2026, and is subject to change.