How to Apply for a Personal Loan
Updated
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If you need to borrow money, you're likely wondering how to get a loan. You can get a personal loan from an online lender, credit union, or bank -- but how do you choose the best lender? And how do you apply for a loan, once you find the right lender for you? This step-by-step guide will help simplify and ease the process of getting a personal loan, no matter what you need it for.
The first step in applying for a loan requires you to estimate how much money you'll need. Some lenders only offer small loans (for example, under $1,000 or up to $10,000), and others specialize in large loans (nothing less than $5,000, up to $100,000 or more).
Read more: How Much Personal Loan Can I Get?
Generally, it's best to borrow the smallest amount possible when you get a loan. You'll pay interest on the amount you borrow -- so if you borrow more, you'll pay more in interest. Get a small loan, and you'll pay less in interest charges.
Most loans have the same monthly payment every month, so you have no surprises. There are a couple things that determine your monthly payments:
Use the calculator below to estimate the monthly payments for different loan amounts, interest rates, and more.
Different lenders have different minimum credit score requirements. Some of the best personal loan lenders will only offer you a personal loan if your credit score is near-perfect. Other lenders specialize in personal loans for bad credit.
Read more: What Credit Score Do I Need for a Personal Loan?
Before going through the hassle of applying for a loan, check your credit score. You'll immediately know which lenders to consider -- and which to cross off your list.
Here's our pick for the best lenders by minimum credit score
Some credit cards and banks allow customers to check their credit score through the bank or credit card issuer's website. This is usually the simplest way to check your credit score. You can also get your credit score and credit history online for free through a variety of different services. For example, through annualcreditreport.com, you can order a free credit report from each of the "big three" credit reporting agencies -- Experian, TransUnion, and Equifax. Go over each report separately as what is reported to each one may be different.
Get the best rates and terms to fit your needs. Here are a few loans we'd like to highlight, including our award winners.
| Lender | APR Range | Loan Amount | Min. Credit Score | Next Steps |
|---|---|---|---|---|
Apply Now for Discover Personal Loan
Powered by Credible 
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 |
7.99% - 24.99%
|
$2,500 - $40,000
|
660
|
Apply Now for Discover Personal Loan
Powered by Credible |
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 |
8.99% - 19.49%**
|
$2,000 - $30,000
|
740
|
|
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 |
6.70% - 35.99%³
|
$1,000 - $50,000¹
|
300
|
Raising your credit score is an easy way to save you hundreds of dollars by helping you score a lower interest rate or a better loan. (If your credit score is already perfect, congratulations -- you can skip this step.)
Here are a few immediate steps you can take to boost your credit score before you get a loan:
Check our guide to how to build credit fast for more information on raising your credit score before you apply for a loan.
There's more to qualifying for a loan than having a high credit score. Lenders also look at your income and debt-to-income (DTI) ratio. We'll break it down for you.
You'll need to show a lender you have a dependable income. Let's say you own a carpet installation business and some months are busier than others. Provide income records for the past two or three years to give the lender a fair sense of your "average" income.
If you've changed jobs frequently, be prepared to explain your situation. For example, if you're a nanny who has worked for several families over the past three years, have your income statements together to show the lender you've stayed in the same field during that time.
Your debt-to-income (DTI) ratio is the amount of money you owe in relation to the amount of money you earn. To calculate your DTI ratio, lenders add up your fixed monthly debts (such as rent or mortgage, car payments, HOA payments, child support, alimony, credit card payments, and payments on other loans), then they divide that number by your monthly income to come up with a DTI ratio.
Let's say your fixed monthly bills come to $3,000 per month and you gross income (the amount earned before taxes and deductions) totals $9,000 per month. You divide $3,000 by $9,000 to come up with a DTI ratio of 33%. ($3,000 ÷ $9,000 = 0.33). A DTI ratio of 36% or less is considered good. When a DTI ratio is higher, lenders begin to worry that you might have more debt than you can reasonably handle.
If you calculate your DTI ratio and learn it's too high, here are three steps that can help bring it down:
To get a loan that works for you, it's important compare multiple lenders. There are plenty of quick and easy online loans available, as well as loans from brick-and-mortar institutions.
Start by looking for lenders that fit your situation. Some lenders specialize in specific loan types, like renovation loans or medical loans. Others specialize in specific offers, like low-interest personal loans. For example, here are three types of personal loans:
Home improvement: Loans for people looking to make upgrades to their homes. A home improvement loan can be a good idea, particularly if the upgrades increase the value of the property.
Debt consolidation: Loans for those who wish to consolidate several high-interest debts into one loan with a lower interest rate. Debt consolidation loans can be an effective way to pay debt off at a faster clip and improve your credit score.
Peer-to-peer lending: Loans for people who need an alternative loan source. This may be someone who is self-employed and has trouble proving their income, or it could be someone with poor credit who's having trouble securing a traditional personal loan. How this loan is used determines whether it's a good idea.
Once you've narrowed your search to a handful of lenders, the best way to compare loans is to get prequalified. Getting prequalified for a personal loan is simple, and doesn't require any commitments on your end.
Only compare loans with similar terms when deciding where to get a loan. Because fees and interest rates can vary so much, it's a good idea to look at the annual percentage rate (APR) for different loans when comparing. The APR takes into account both the fees and the interest rate, so you get a better picture of what the loan actually costs.
Note: If you're unemployed, you can still qualify for a personal loan. For information on what counts as income on a loan application, check out our guide to getting a loan while unemployed.
If you're having trouble getting pre-approved for a loan, you can ask a friend or family member with better credit to be your loan cosigner. If you have a cosigner, the lender will consider both you and your cosigner's credit scores and income instead of just yours.
As a result, a cosigner can make it easier to qualify for a personal loan. You also might get a lower interest rate with a cosigner than you would on your own.
Be careful, though. A cosigner shares the responsibility of paying back the loan. That means if you miss a payment, your cosigner's credit score will suffer. And if you don't pay back the loan, the lender can take legal action against your cosigner. Asking someone to cosign on a loan is not something that should be taken lightly.
Most personal loans don't require collateral -- the lender can't take your car, house, or other possessions if you can't pay the loan. (But your credit score and financial health will suffer if you miss payments, so it's best to only take out an amount you can pay back.)
Similar to a cosigner, collateral can help you qualify for a loan if your credit history isn't perfect. Examples of collateral include a car, a house, or a savings account. If you think you may need collateral, you'll need to look for lenders offering a loan type called a secured loan.
After deciding on a lender, it's time to apply for a loan. Most lenders allow you to apply for a loan online.
Before applying, gather these documents that you'll be asked for:
The lender will also check your credit and consider relevant factors, such as job stability, to decide if you qualify for the loan. Then, the lender will either deny your loan or approve it.
In some cases, you'll get a decision very quickly -- or immediately -- after submitting your loan application. In other circumstances, the lender may want more info or more time before making its decision. If the lender needs more details or further investigation into your financial situation, you may have to wait several days to find out if the loan is approved.
Once your loan is approved, you'll have to agree to the interest rate and repayment schedule. Then, you'll sign a promissory note indicating you'll pay back the loan.
At this point, the lender will release the funds to you. The release of funds can take anywhere from one day to two weeks, depending on the lender. If you need the money quickly, be sure to ask the lender how long it takes to fund an approved loan before applying.
When you get a personal loan, you receive all the money you're borrowing right away (usually deposited into your bank account). Then, you can use the money from a personal loan for anything you want -- from home improvements to paying off credit card debt.
Read more: How Long Does It Take to Get a Loan?
There are many personal loan lenders offering loans to people with all different credit scores. Even if you aren't a perfect borrower, you should be able to find a personal loan when you need the funds. The real question is: How can you get a loan that benefits you financially?
Rule number one when you apply for a loan is to only borrow what you need. In addition, make sure you don't take a loan without understanding the terms and you pay back the loan as due. If you follow this basic advice, getting a loan doesn't have to be hard.
Looking for a personal loan but don’t know where to start? Our favorites offer quick approval and rock-bottom interest rates. Check out our list to find the best loan for you.
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.
Please note that this calculator is not personalized financial advice and should not be considered or used as such. Nor are we promising that by use of this calculator, will you be able to save more money, preserve wealth, or otherwise.
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
*Upstart Loan Disclaimer
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.
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.
Please note that this calculator is not personalized financial advice and should not be considered or used as such. Nor are we promising that by use of this calculator, will you be able to save more money, preserve wealth, or otherwise.
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
*Upstart Loan Disclaimer
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.