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A personal loan can be a powerful financial tool when used wisely.
Whether you're consolidating high-interest debt, covering a big purchase, or handling an emergency, a personal loan gives you access to fast, fixed-rate funding with predictable payments.
As someone who's recently been shopping around for a personal loan, though, I can tell you firsthand that you're going to want to know what you're getting into before applying.
The process is fairly straightforward, but there are a few steps you should take to make sure you qualify for the best rates. Here's what to know.
Why get a personal loan?
A personal loan gives you a lump sum of money to use for almost any purpose, from debt consolidation to home renovation and more. I'm even thinking of getting one to help fund a creative project of mine.
You pay your personal loan back in fixed monthly payments, usually at a fixed interest rate. Most personal loans are unsecured, meaning you don't need to offer up any collateral to get one.
Personal loans are best suited for borrowers with good credit and steady income. If your credit is limited or poor, you'll likely be faced with higher rates or fewer options.
Step 1: Check your credit
Before hitting "apply," review your credit score and full credit report. Most lenders require a "good" credit score of 670 or higher, with a better score typically getting you a better rate. You can easily access your credit reports with a handful of free sites.
If your score is low, don't rush into an application -- take time to improve it by paying down balances and making on-time payments. It took me years to build a solid credit history, so don't panic if your score isn't the best yet.
Step 2: Compare lenders
Lenders vary widely in how much they'll loan you, the rates they offer, and the fees they charge. Comparing lenders is massive if you're looking to get the best deal possible (and who isn't?). Look at things like:
Credit score requirements
APR range (includes interest and fees)
Loan amount
Repayment terms
Other fees like origination fees (up to 12% of the loan amount), late fees, and prepayment penalties
Compare the best personal loans
Get the best rates and terms to fit your needs. Here are a few loans we'd like to highlight, including our award winners.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
When you apply, you'll need to provide some basic biographical and financial info. You'll probably be asked for things like:
Contact info
Social Security number
Employment and income details
Monthly housing costs
Desired loan amount and purpose
Having these details at the ready will help speed things up.
Step 4: Get prequalified
Many top lenders will let you prequalify for a personal loan online in just a few minutes. This results in a soft credit check, which doesn't affect your credit score. You can also go through a pre-approval process, which results in a hard credit check, although that will temporarily ding your score.
Prequalification will show you estimated offers with all sorts of loan amounts and details, giving you a pretty good (but not exact) idea of what you're signing up for.
Not all lenders offer this step, but it's a great way to shop around without hurting your credit.
Step 5: Review and choose your offer
If you get multiple offers, it's time to compare. You'll first want to look at the APR, which reflects both the interest rate and any additional fees. Don't just focus on the lowest monthly payment, though -- make sure the total cost fits your budget.
Once you choose an offer, you can move forward with a full application, which includes a hard credit check.
Step 6: Submit your application and get your money
Now for the fun part: Getting your cash.
Your lender may ask for a few more documents like pay stubs, W-2s, or a government-issued ID to verify your information. But typically if you've prequalified -- and especially if you've been pre-approved -- you'll be set to go with your new loan.
Once approved, you'll sign a loan agreement and receive your funds -- often within a few business days. Then you can get started consolidating debt, making a large purchase, or whatever else you've got in mind with your new lump sum.
Most lenders look for a credit score of 670 or higher. To get the best rates, aim for the best score possible. Some lenders accept lower scores, but may charge higher interest.
Submitting a full loan application results in a hard credit check, which may temporarily lower your score by a few points. Prequalification usually involves a soft check, which doesn't impact your score.
If you're approved, you can often receive the money within a few business days. Some lenders offer same-day or next-day funding.
Generally, yes. Personal loans can be used for debt consolidation, major purchases, medical bills, or other expenses. Some lenders may restrict use for business or education purposes.
Yes. Common fees include origination fees (as much as 12% of the loan amount), late payment fees, and prepayment penalties. Always review the full terms before accepting a loan.
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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Terms may apply to offers listed on this page.
¹ Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000).
³ The full range of available rates varies by state. A representative example of payment terms for an unsecured Personal Loan is as follows: a borrower receives a loan of $10,000 for a term of 60 months, with an interest rate of 18.60% and a 8.51% origination fee of $851, for an APR of 23.07%. In this example, the borrower will receive $9149 and will make 60 monthly payments of $258. APR is calculated based on 5-year rates offered in December 2024. There is no downpayment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
Citi® Personal Loan Disclosure
**Terms, conditions, and fees for accounts, products, programs and services are subject to change at any time. You must be at least 18 years of age (21 years of age in Puerto Rico). Co-applicants are not permitted. Existing Citi deposit and credit card customers who have been a Citi customer for less than 12 months are not eligible for a Citi® Personal Loan.
If you apply online, you must agree to receive the loan note and all other account disclosures provided with your loan origination in an electronic format and provide your signature electronically.
Rates as of 06-03-2025. Your APR may be as low as 8.99% or as high as 19.49% for the term of your loan. The lowest rate quoted assumes excellent credit, a loan term of 24 or 36 months, and includes a 0.5% APR discount for enrollment in automatic payments at the time of loan origination. Your APR will depend on a variety of factors including your creditworthiness, term of loan, and existing relationship with Citi. Citi offers personal loans with a period of repayment between 12 and 60-month terms. For example, if you borrow $10,000 for 36 months at 15.99% APR, to repay your loan you will have to make 36 monthly payments of approximately $351.52.
Existing Citigold and Citi Priority customers will receive an additional 0.25% discount to the APR. If you are in default, your APR may increase by 2.00%. Rates subject to change without notice.
To check for offers you may qualify for, Citi conducts a soft credit inquiry. If you are presented with an offer and choose to proceed with the application process, Citi will conduct a hard credit inquiry which may have an impact on your credit score.
Citi® Personal Loan proceeds cannot be used to pay for post-secondary education expenses or for business purposes. Credit cards issued by Citibank, N.A. or its affiliates, as well as Checking Plus and Ready Credit accounts, are not eligible for debt consolidation, and Citibank will not issue payoff checks for these accounts. If you are unsure of the issuer on the account, please visit https://www.citi.com/affiliatesproducts for a list of Citi products and affiliates.
If you are approved for a personal loan with Citi, you can get your funds the same day with a Citi deposit account, or up to 2 business days for a non-Citi account when using direct deposit. Or, you can select to receive a check by mail in approximately 5 business days.
Personal loans are made available by Citibank, N.A., Equal Housing lender
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Terms may apply to offers listed on this page.
¹ Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000).
³ The full range of available rates varies by state. A representative example of payment terms for an unsecured Personal Loan is as follows: a borrower receives a loan of $10,000 for a term of 60 months, with an interest rate of 18.60% and a 8.51% origination fee of $851, for an APR of 23.07%. In this example, the borrower will receive $9149 and will make 60 monthly payments of $258. APR is calculated based on 5-year rates offered in December 2024. There is no downpayment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
Citi® Personal Loan Disclosure
**Terms, conditions, and fees for accounts, products, programs and services are subject to change at any time. You must be at least 18 years of age (21 years of age in Puerto Rico). Co-applicants are not permitted. Existing Citi deposit and credit card customers who have been a Citi customer for less than 12 months are not eligible for a Citi® Personal Loan.
If you apply online, you must agree to receive the loan note and all other account disclosures provided with your loan origination in an electronic format and provide your signature electronically.
Rates as of 06-03-2025. Your APR may be as low as 8.99% or as high as 19.49% for the term of your loan. The lowest rate quoted assumes excellent credit, a loan term of 24 or 36 months, and includes a 0.5% APR discount for enrollment in automatic payments at the time of loan origination. Your APR will depend on a variety of factors including your creditworthiness, term of loan, and existing relationship with Citi. Citi offers personal loans with a period of repayment between 12 and 60-month terms. For example, if you borrow $10,000 for 36 months at 15.99% APR, to repay your loan you will have to make 36 monthly payments of approximately $351.52.
Existing Citigold and Citi Priority customers will receive an additional 0.25% discount to the APR. If you are in default, your APR may increase by 2.00%. Rates subject to change without notice.
To check for offers you may qualify for, Citi conducts a soft credit inquiry. If you are presented with an offer and choose to proceed with the application process, Citi will conduct a hard credit inquiry which may have an impact on your credit score.
Citi® Personal Loan proceeds cannot be used to pay for post-secondary education expenses or for business purposes. Credit cards issued by Citibank, N.A. or its affiliates, as well as Checking Plus and Ready Credit accounts, are not eligible for debt consolidation, and Citibank will not issue payoff checks for these accounts. If you are unsure of the issuer on the account, please visit https://www.citi.com/affiliatesproducts for a list of Citi products and affiliates.
If you are approved for a personal loan with Citi, you can get your funds the same day with a Citi deposit account, or up to 2 business days for a non-Citi account when using direct deposit. Or, you can select to receive a check by mail in approximately 5 business days.
Personal loans are made available by Citibank, N.A., Equal Housing lender
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