How to Get a Personal Loan

By Katie O'Shea

When you want to get your finances back on track or take care of some unexpected expenses, a personal loan may be the right choice for you.

A personal loan can be a good option because, unlike credit cards, the repayment periods for the loans are fixed. That means that you'll know when you'll be done paying it off.

Before getting a personal loan, assess your finances and if a loan is needed, consider which lender and loan product are right for you. Below, we've outlined some of the key things to think about:

1. Evaluate Your Financial Situation

It's important to consider how a personal loan would impact your finances. To help you figure out what your estimated monthly payments might be, depending on loan size, APR, and loan terms, try using a personal loan calculator.

Based on your financial situation, some loan options might be more practical for you than others. There are two main types of personal loans:

  • Secured Loans - These are loans that require collateral as part of the loan terms. Collateral is a valuable possession that secures a loan (e.g. the borrower's car). Providing collateral may allow borrowers with less-than-perfect credit to qualify, sometimes for larger amounts and/or lower interest rates than otherwise. If a borrower does not repay a secured loan, the lender may take possession of the collateral. If your credit is not so good, and you need a loan now, you may want to consider applying for a secured loan.
  • Unsecured Loans - These are loans that do not require collateral. With unsecured loans, the interest rates tend to be higher than rates for secured loans. Unsecured loans may be easier for borrowers with better credit to obtain, because such borrowers are viewed as presenting less risk.

For borrowers with less-than-perfect credit, another option may be getting a loan with a co-signer. A co-signer is someone who is legally obligated to repay the loan if the primary borrower does not. If a borrower defaults on a loan, the co-signer will be required to pay whatever is still owed.

2. Check Your Credit

First, do a self-check of your credit. The majority of lenders check your credit history when you apply for a loan, it is often a good idea to take a look before they do, to see if there are any errors or discrepancies to correct, and avoid surprises.

To view your credit, you can request a credit report from annualcreditreport.com. You are entitled to receive three credit reports (one from each of the major credit bureaus) each year. It's a good idea to take advantage of this freebie - it allows you to make sure that your accounts have not been used fraudulently.

3. Research Your Lender

Next, look for a lender who can provide the right solutions for your situation. Some lenders offer just unsecured loans, while others offer both secured and unsecured - if you think you might want to have the option of getting a secured loan, you might want to consider applying to a lender who offers both, like us.

Certain lenders may be able to advise you about which loan product might be best for you. It's important to look for a lender you can trust, so that you can avoid scams and be sure that you're receiving reliable advice.

Online reviews of lenders on trusted sites, like TrustPilot, may be a good resource for your research. You should also consider checking to see if the lender is listed on Better Business Bureau and how they are rated.

4. Gather Your Documents

The list of documents you need to provide when applying for a loan may vary by lender, but some of the most commonly required documents include:

  • Proof of Identity - an official government-issued ID (e.g. passport or driver's license)
  • Social Security Card
  • Proof of Residence - confirmation of your address (e.g. a driver's license with your current address, a utility bill, or a signed lease)
  • Proof of Income - evidence of income (e.g. a paystub)

If you apply for a secured loan, you will need to provide documents that prove that you own the item you're using as collateral.

If you decide to apply with a co-signer, your co-signer will likely have to provide some or all of these documents as well.

5. After You Receive Your Loan

Once you have completed the application process and have received your loan, it's important to stay current with your payments. By paying in full each month, you may be able to improve your credit score over time.

One way to make sure that you stay up-to-date with your loan payments is to set up auto-pay, which may help you avoid missing payments. If you have your loan payments set to auto-pay, it is especially important to monitor your finances to make sure that you have sufficient funds in your bank account when your loan payment is due so that you don't accidentally overdraw your account.

If you decide not to use auto-pay, it's important to come up with your own ways to keep tabs on your finances. This may include creating a budget for each month so that you'll be ready to make your payment when the time comes and setting calendar reminders so you won't forget to pay.

If you're ready to pay off your loan before the date that you scheduled to have it paid off in full, make sure that your loan terms don't include pre-payment penalties - these are fees for paying off your loan early.

Remember that getting a personal loan doesn't have to be a hassle. With these tips in mind, your loan application process will go more smoothly.


The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of OneMain. The information in this article is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. The information in this article is not intended to be and does not constitute financial, legal or any other advice. The information in this article is general in nature and is not specific to you the user or anyone else. The author was compensated by OneMain for this post.