Financial Education

How to get a personal loan: 6 steps to secure funding

Here are six simple tips on how to get a personal loan. This guideline can help you improve your chances of getting the money you need and get informed about the process. Read on!

Advertisement

Get the money you need to organize your finances

Personal loan. Calculator, dollar bills and pen.
Understand how a personal loan works. Keep reading! Source: Adobe Stock

If you need extra cash, you should find out how to get a personal loan. But before you start filling out applications, there are a few things you need to know.

Close up hand of influencer budget planning for online media advertising at cafe restaurant.online marketing concept

How to create an easy budget plan in 5 steps

Here's everything you need to know to create a budget that considers your fixed and variable expenses. Check it out!

In this post, we’ll walk you through the steps to securing funding and getting your loan approved. Keep reading to learn more!

How does a personal loan work?

Most personal loans are unsecured, so they do not require any collateral.

You can use a personal loan for several purposes, such as debt consolidation, home improvements, payoffs, emergencies, or major purchases.

The payments are usually flexible and made in installments.

In addition, the interest rates are typically fixed, and the repayment term can usually range from two to seven years.

But how can you get a personal loan? You may be able to get one from a bank, credit union, or even an online lender.

Then you’ll need to fill out an application and provide information about your income, debts, and assets.

That is a typical process since personal loan approvals rely on your creditworthiness and income proof.

Overall, this kind of loan can be a great way to finance large purchases or consolidate high-interest debt.

However, you might be attentive and shop around for the best rates and terms before taking out a loan.

How much can you borrow on a personal loan?

Conceptual hand writing showing How Much. Concept meaning ask about the amount or cost of something What amount or price Paper blue keyboard office study notebook chart numbers memo
Find out how much you can get from a personal loan. Read on! Source: Adobe Stock

Personal loans can be a great way to consolidate debt, finance a large purchase, or cover unexpected expenses.

But how much can you borrow to get a personal loan? The answer depends on several factors, such as your credit score, income, and debts.

First, your creditworthiness can be decisive in the approval process. So you must know your score to shop around for the best options.

Second, your income is another important factor in how much you can borrow on a personal loan.

Lenders want to ensure you have the means to repay the loan, so they’ll typically check your work history and income.

So if you have a steady income and no other significant debts, you may be able to borrow more than someone with an unstable income or significant debts.

Finally, the amount you can borrow on a personal loan also depends on the lender’s policies.

Some lenders will only lend up to $5,000, while others may lend up to $100,000 or more.

Then shopping around and comparing offers from multiple lenders is essential before choosing one.

By doing this, you’ll be able to find the lender that offers the best terms for your needs.

Concept art of Bullish and Bearish Stock Market in futuristic idea suitable for Stock Marketing or Financial Investment

Bull vs bear market explained

Here's a breakdown of a bull vs. bear market, what each means for investors, and some tips on where to invest now.

What credit score do you need to apply for a personal loan?

If you’re thinking about taking out a personal loan, one of the first things you’ll need to consider is your credit score.

Your credit score will help lenders to assess your creditworthiness.

A high credit score means you’re a low-risk borrower, which could lead to a lower interest rate on your loan.

On the other hand, a low credit score could lead to a higher interest rate; sometimes, it could mean you won’t be approved for the loan.

So, what credit score do you need to apply for a personal loan? The answer is it depends.

Some lenders have no minimum credit score requirement, while others may require a minimum score of 660 or higher.

The best way to find out is to shop around and compare personal loans from multiple lenders.

Keep in mind that if you have a lower credit score, you may still be able to get a personal loan. It only depends on the lender.

Get a personal loan by following our 6 easy steps

How to get a personal loan? Here are six easy tips to get you started.

Multiple personalized credit card offers

Applying won't hurt your credit score

You will be redirected to another website

1. Check your credit score

Your credit score is one of the main factors lenders will consider when determining whether or not to approve your loan.

If you have a decent credit score, you’re more likely to be accepted for a loan with better terms. However, some lenders offer loans to low scores, too.

2. Shop around for the best rates

Once you know your credit score, you can start shopping around for personal loans.

Compare rates, fees, and terms before choosing a lender.

That will help you overview the possible installments, so you can make sure you’ll make ends meet.

3. Pre-qualify for a loan

Pre-qualification for a loan will give you an idea of how much money you can borrow and help you narrow down your choices.

Getting pre-qualified is easy. Contact a lending institution and provide basic information about yourself and your finances.

The lender will then perform a quick credit check and let you know how much you’re qualified to borrow.

4. Read the fine print

A person with a magnifying glass looking to text: Read the Fine Print
Learn why reading the fine print is important when getting a loan. Read on! Source: Adobe Stock

Before you sign a loan agreement, it is essential to read and understand it. It will help ensure that you understand the terms of the loan and what is expected of you.

Some loan marketplaces, for example, have different terms depending on the lender.

So pay more attention to the interest rate, repayment schedule, and any fees or charges associated with the loan.

5. Make timely payments

Once you receive your personal loan, making timely payments is important to avoid delays or nonpayments.

Defaulting could damage your credit score and make it more difficult to get future loans, apply for credit cards, and even get some public jobs.

6. Protect your personal information

Be cautious about sharing your personal information with anyone, especially if you provide it online or over the phone.

Only provide your information to reputable sources and make sure that any website you’re sharing it with is secure.

Following these six easy steps should help you easily get a personal loan.

Remember to shop around for the best rates and terms when you borrow money.

Also, make sure you read the fine print carefully and make timely payments so you don’t damage your credit score.

And if you want to learn how to get some extra money to pay for your loan and another thing you like, read our post below to learn how to earn extra money online!

Dollars cash money and paper note with text written EXTRA INCOME. Concept of financial planning. Make more extra money from parttime side hustle or second job

How to earn extra money online

Do you want to know how to earn money online? You're in luck. There are lots of different ways to earn money without leaving your home. Read on to find the best method!

Trending Topics

content

First Progress Platinum Elite Mastercard® Secured Credit Card review

Ready to start improving your credit? The First Progress Platinum Elite Mastercard® Secured Credit Card is a good way to get started!

Keep Reading
content

Application for the Discover it® Secured card: how does it work?

If you're looking for a secured card with fantastic benefits, you just found it: the Discover it® Secured card. Learn how to apply!

Keep Reading
content

Rewards program: what to consider before you choose a credit card

Discover what you should consider in a rewards program and what to look for in one. Read on to learn more!

Keep Reading

You may also like

content

NASB Mortgage review: how does it work and is it good?

Read our NASB Mortgage review! Enjoy several loan options, including for self-employed and low-income borrowers! Stick with us and learn more!

Keep Reading
content

Milestone® Mastercard® – Less Than Perfect Credit Considered application

If you have less than perfect credit, the Milestone® Mastercard® - Less Than Perfect Credit Considered may be a good option for you. Read on!

Keep Reading
content

Solana is releasing a new crypto phone

Find out more about the upcoming Solana crypto phone, including its features and why you should be excited about it.

Keep Reading