How to get a Personal Loan in 5 Easy Steps (2024)

FAQs

How to get a Personal Loan in 5 Easy Steps? ›

A good or excellent credit score gives you the best chance of getting a personal loan with attractive terms. If your credit score isn't up to par, try improving it or finding a co-signer to help boost your approval odds. The amount you borrow and your debt-to-income ratio also play a role in the lender's decision.

A good or excellent credit score gives you the best chance of getting a personal loan with attractive terms. If your credit score isn't up to par, try improving it or finding a co-signer to help boost your approval odds. The amount you borrow and your debt-to-income ratio also play a role in the lender's decision.

Use Collateral To Secure The Loan

If your credit score is lower than you need it to be, you could consider a secured loan. The inclusion of collateral makes secured loans easier to get approved for, as it assures the lender they'll get their money back one way or another – even if you default on the loan.

What is the easiest loan to get approved for? The easiest types of loans to get approved for don't require a credit check and include payday loans, car title loans and pawnshop loans — but they're also highly predatory due to outrageously high interest rates and fees.

The lender needs to determine whether the money will be used for something they allow. Debt consolidation, making large purchases or emergency expenses are all common uses for personal loans. But some lenders have specific use restrictions.

Who is most likely to get approved for a personal loan? ›

Borrowers with multiple credit cards, a mortgage, or an auto loan showing regular on-time payments may be more likely to qualify. Debt-to-income ratio: Lenders seek borrowers who make enough money to meet their current monthly financial obligations, plus loan payments.

The lesser the credit, the lower your chances are of getting a good deal on your loan application. Some of the best ways to improve and maintain a good credit score are — paying your EMIs and credit card bills on time, diversifying your credit portfolio, and reducing your DTI and credit utilization ratio.

The key is to get as specific as possible. For instance, if you need $700 for a car repair, tell your lender that the money is for that reason. You should also map out a repayment plan, like paying them back $70 a month for the next 10 months.

You can get a $500 loan via a personal loan, payday loan, payday alternative loan, cash advance app, or credit card cash advance. However, some options are better than others. Some small loans come with high costs that can cause financial hardship.

Payment history is weighed the most heavily in determining your credit score, along with your total outstanding debt. Generally, borrowers need a credit score of at least 610 to 640 to even qualify for a personal loan. To qualify for a lender's lowest interest rate, borrowers typically need a score of at least 800.

Generally, you need a good to excellent credit score of 670 or above to qualify for a $10,000 loan. However, some lenders specialize in working with borrowers with fair or poor credit.