How to Get a Personal Loan in 5 Easy Steps

Before you start your loan application, it’s a good idea to gather all the necessary documents and information. Lenders will typically ask for the following to verify your identity and financial standing:

• Sufficient credit score: Credit score requirements vary by lender. If you have a FICO^® score of 670 or above, you have a decent shot at getting favorable personal loan terms. Your approval odds may drop if your score falls below 579, which falls into the “poor” credit category.¹
• Proof of income: Lenders look at your tax returns, bank statements, or pay stubs to decide whether you can afford to pay back your loan. If your income is low or unpredictable, you might have more difficulty qualifying for a personal loan.
• Low debt-to-income (DTI) ratio: Many lenders want your DTI ratio to be under 36%, though the exact number can differ between lenders.² To calculate your DTI ratio, divide your monthly expenses by your gross monthly income.
• Contact information: You’ll likely need to provide your address, phone number, email, and Social Security number. 
• Proof of address: The lender may ask for a utility bill or lease to confirm where you live.
• Proof of identity: This could include your birth certificate, driver’s license, passport, military ID, certificate of citizenship, or state ID.

When you’re ready to apply for a personal loan, here are the steps you can take. 

Step 1: Determine how much you need to borrow

Before you start the application process, decide how much money you need.

Personal loan amounts typically range from $1,000 to $100,000, but that doesn’t mean you should borrow as much as possible. You have to repay the full amount and any interest that grows, so don’t commit to a loan you can’t afford.

To get a loan that fits your budget, consider: 

• How much money you need to cover the expense
• Whether you can use your savings to cover some of the expense
• Your income and ability to repay the loan

Apply for the smallest loan possible to cover your expenses, and learn how to calculate interest on a loan so you know what to expect.

Step 2: Check your credit

Your credit score and history suggests to lenders how well you handle your existing debt. Lenders then use this information to assess your credit risk and offer you loan terms.

FICO scores fall into the following ranges:

• Exceptional: 800 – 850
• Very Good: 740 – 799
• Good: 670 – 739
• Fair: 580 – 669
• Poor: 300 – 579¹

Knowing your credit score before applying for a loan can prevent surprises. You can check your credit report and credit score through the major credit bureaus – Equifax, Experian, and TransUnion – or at myFICO.com. Some credit card companies also provide free FICO^® scores. 

If you have a good to exceptional score, you’ll have an easier time getting approved and accessing better rates and terms. If your score falls in the fair or poor range, you may have a harder time getting approved or could get stuck with higher rates and fees. 

If your credit score needs work, there are a few things you can do to boost it before applying for a personal loan, such as:

• Paying down your existing debt
• Making on-time bill payments
• Getting a secured credit card
• Removing collections from your credit report

Step 3: Research and compare lenders

Your next step is shopping around with different lenders for the best rates and terms. You can find personal loans with online lenders, credit unions, and traditional banks. When you compare loans, consider each lender’s available loan amounts, annual percentage rates (APR) or interest rates, and term lengths.

It’s also worth reviewing each lender’s eligibility requirements to make sure you can meet them. Many lenders let you pre-qualify online, meaning you can check your rates and compare offers without harming your credit score. 

Step 4: Fill out a loan application

Once you’ve chosen a lender, it’s time to fill out the loan application. You can often complete an application form online in minutes or visit a bank branch in person. The list of documents you gathered earlier will come in handy here.

Some lenders may review and approve your loan on the same day, while others take longer to return a decision.

Step 5: Accept the loan offer or consider alternatives

Once the lender has made a decision on your application, they will communicate that decision to you. If you’re approved, the lender will send you the final loan documents detailing the following:

• Loan amount
• Interest rate and APR
• Loan term
• Repayment terms, including the monthly payment amoun

Some lenders charge an origination fee, which they deduct from the total amount of cash you receive from the loan. This fee goes toward the cost of processing your application. A typical origination fee is between 1% and 12% of the total loan amount.³

If the terms work for you, you can accept the personal loan offer and wait for the lender to send you the funds. Some online lenders offer same-day funding, while others may take longer to deposit the money into your account.

If the loan terms don’t meet your expectations, you don’t have to accept the loan and could instead keep shopping around for a better deal.

The time it takes to get a personal loan can vary depending on the lender, your credit profile, and how you apply. In general, most borrowers receive a decision within a few minutes to a few business days — and the funds can arrive anywhere from the same day to a week later.

Online lenders

Online lenders tend to have the fastest turnaround times. Many offer instant prequalification and can approve your loan within minutes after you apply. If approved, you may receive your funds as soon as the same business day or within one to three days, especially if you have your bank account linked for direct deposit.

Banks and credit unions

Traditional banks and credit unions may take longer because they often include additional verification steps or manual reviews. Expect funding in about three to seven business days from application to deposit. If you apply in person, approval might also depend on branch hours and staff processing time.

Factors that can affect loan timing

Several factors influence how long it takes to receive your personal loan funds:

• Credit score and history: Borrowers with strong credit may be approved faster.
• Loan amount: Larger loans sometimes require additional verification.
• Documentation: Submitting complete, accurate paperwork helps speed things up.
• Application timing: Applying early in the business day or week can help avoid delays.
• Bank processing times: Even after approval, it may take one to two business days for your bank to make the funds available.

If you need money faster

If you need funds urgently, consider applying with an online lender that offers same-day or next-day funding. Prequalifying in advance and setting up direct deposit can also help shorten the process.

It can be discouraging if a lender denies your application. This can happen if your credit score is too low, you have too much debt, or you asked for more than the lender thinks you can repay. 

The Fair Credit Reporting Act and Equal Credit Opportunity Act require lenders to provide you with an adverse action notice explaining why your loan application was rejected.⁴ Read over the letter carefully to find out what steps you need to take to improve your odds for the next time. 

Some steps that could help include: 

• Paying off credit card debt
• Finding and removing incorrect information from your credit report
• Growing your income
• Asking someone you know to cosign the loan
• Applying for a smaller loan amount

Getting a personal loan with bad credit can be tough, but it’s not out of reach. 

Start by checking your credit report for errors and paying down existing debt to help boost your score. Even small improvements can make a difference when you apply.

Lenders also look at your income and employment history, so showing steady paychecks or reliable income can strengthen your application. If your credit alone isn’t enough, you might apply with a co-signer who has better credit or explore a secured loan backed by savings or collateral.

Be cautious with lenders that promise “guaranteed approval” or skip credit checks — these loans often come with high fees and interest. Instead, focus on reputable online lenders, credit unions, or community banks that work with borrowers rebuilding credit. Making on-time payments over time can help you qualify for better loan options in the future.

Personal loans can be helpful when you need cash quickly to pay for an unexpected expense. However, they’re not your only financing option.

Here are some personal loan alternatives:

Home equity loan or line of credit

If you own your home, you can borrow against your equity via a home equity line of credit (HELOC) or home equity loan. These secured loans use your home as collateral, resulting in typically lower average APRs than personal loans.

However, failing to repay the loan as promised can result in the loss of your home. Learn the differences between a line of credit and a loan to figure out which option is best for you.

Credit cards

Credit cards can be helpful for emergency expenses – especially if you can qualify for one with a 0% introductory APR. Paying off your 0% APR credit card in full by the statement due date can help you avoid interest.

However, if you carry a balance on a credit card after that period ends, you can accrue interest quickly.

Paycheck advance

You can consider a paycheck advance for small expenses. This type of loan lets you borrow from an upcoming paycheck, meaning you’re using money you’ve already earned. You could ask your employer for a paycheck advance or use a cash advance app.

By following these simple steps, you can easily apply for a personal loan to pay for a special event, cover a large expense, or consolidate high-interest debt. Make sure to compare offers from multiple lenders to find a loan that best fits your needs. Consider how the monthly payments will fit into your budget so you can repay the loan successfully while getting the funding you need. 

For more on lending requirements, find out how to get approved for a personal loan.