How to Get a Personal Loan

A personal loan can be a great way to get your finances back on track, make a purchase or even go on a trip.

Getting a personal loan starts with the application process. Applying doesn’t need to be stressful. In fact, with some basic preparation, it can be smooth sailing from start to finish.

This guide will walk you through four important steps to take before applying for a personal loan.

Key steps to take to get a personal loan

1. Evaluate your financial situation

As you consider applying for a personal loan, it’s important to determine two things: the purpose of the loan and how it will impact your finances.

Start by identifying the ultimate goal of getting a personal loan. Ask yourself important questions like:

• Are you having difficulty paying existing debts and interested in consolidating your bills?
• Are you looking to finance a big purchase like a new car or swimming pool?
• How much money do you think you'll need to cover the expense?
• Are there other options you can consider before getting a personal loan?

Once you identify your goal, you can figure out how much you’ll need to borrow and how that loan amount will fit into your existing budget. Start by looking at how much money you earn and how much you spend each month. It's also smart to account for any other loans or debts you may have to help you see if you can handle more debt.

Before you apply for a loan, be sure you’ve also considered other potential options, such as selling unwanted items or tapping into a savings account. Create a simple budget to see if you can repay the loan and avoid falling behind. By clearly understanding your money situation, you can borrow wisely and choose a loan that you can afford to pay back.

2. Research different lenders

When it comes to getting a personal loan, a little research can go a long way. Take the time to investigate different lenders and the various types of loans they offer and compare your options.

Ultimately, determining which lender has the best personal loan comes down to understanding what you need and what each lender can offer. To avoid scams, explore online reviews on trustworthy sites like Trustpilot and look up each lender on the Better Business Bureau to check ratings and read customer reviews. You can also reach out to friends and family to get their honest opinions of lenders they have worked with before.

3. See if you can prequalify for a personal loan

Prequalifying for a personal loan could help give you an idea of your chances of approval once you submit a formal application. A typically quick and easy process, prequalification lets you fully consider your options and budget before you commit to a loan, but timing does depend on the lender.

During prequalification, the lender you’ve chosen will perform a soft credit pull where they’ll review basic credit bureau details like your payment history and current accounts. This step gives you a preview of your potential loan amount, pending more information that comes with a full application. A soft credit pull is only visible to you on your credit report and doesn’t affect your credit score. A hard credit pull only happens when you officially apply for a loan.

Prequalification also helps you find out if there might be issues with your credit score. It gives you the opportunity to request a copy of your credit report from the credit bureaus to make sure it’s correct while giving you a chance to address any errors if needed. Luckily, there are plenty of ways to check your credit for free, with no impact on your score.

While the lowest interest rates are typically offered to people with the highest credit scores, some lenders will take other factors into consideration to help you find a loan solution. OneMain looks beyond your credit score and reviews your financial picture as a whole. Here are some factors that may affect your eligibility for a personal loan with OneMain:

• Financial history/credit history
• Income and expenses
• Loan purpose
• Whether you have filed for bankruptcy
• State of residence

Prequalification is usually quick and easy, though timing varies by lender. At OneMain, it takes about 4 to 5 minutes to complete, and checking won't affect your credit score.¹

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4. Gather your documents and apply

Now that you’ve completed the first three steps, you’re ready to start the application process. Gathering your documents ahead of time will help you prepare to submit your application.

The list of documents you need to provide when applying for a personal loan may vary by lender. OneMain Financial’s required documents include:

• Proof of identity: an official government-issued ID (e.g., passport, driver’s license) • 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., paystubs or tax returns)

If you apply for a secured loan, you’ll need to provide documents that prove you own the collateral.

When applying with a cosigner, your cosigner will likely have to provide some or all of these documents as well.

Once you apply for a personal loan, the lender will review your application and may request additional documents. The lender will also conduct a hard credit check, which can impact your credit score and will stay on your credit report for two years.2

After reviewing your financial information, the lender will decide whether to approve or deny your application.

If approved, you'll receive the loan terms, including the interest rate, repayment schedule, and information on any fees. If everything looks good to you, you can accept the terms.

Your funds can be deposited into your bank account in as little as one hour after loan closing with OneMain, but the time frame may vary depending on the lender you choose.^¶

What to do if you don't qualify but need to get a loan

If your credit isn't exactly where you'd like it be, but you still need extra funds, you have options available, including opting for a secured loan or applying with a cosigner.

Apply for a secured loan

A secured loan is a type of loan where you promise collateral (something valuable) like a house or a car, to the lender in case you can't pay back the loan. For example, if you get a loan to buy a house, the house itself is used as a promise that you'll pay back the money. If you don't repay the loan, the lender can take the house to recover its losses. Because the lender has a way to recover the money if you default, secured loans often have lower interest rates and higher borrowing limits than unsecured loans.

Ask someone you trust to cosign

A cosigner is someone who agrees to sign a loan agreement with the primary borrower and understands that they themselves are legally responsible for the loan if it is not repaid. Your cosigner may have a stronger credit history and/or a more favorable credit score than you do. If you decide to go this route, make sure to have an honest conversation and provide them with your plan to repay the loan.

You’re ready to take the next step

Getting a personal loan doesn’t have to feel overwhelming. Lenders like OneMain Financial break down both the personal loan process and loan requirements for a smooth, surprise-free experience. With some basic research and preparation, you’ll be well equipped to not only find the right lender but apply quickly and painlessly.

1. Timing may vary based on: when you submit your application, how many documents are needed for approval, how long it takes for OneMain to receive, review and verify those documents, and whether your loan is secured by collateral, among other factors.
2. Experian, “What is a Hard Inquiry,” https://www.experian.com/blogs/ask-experian/what-is-a-hard-inquiry/
3. Funding Options; Availability of Funds: Funding Options; Availability of Funds: Funds within an hour after loan closing must be accessed by using a bank-issued debit card and are disbursed through the SpeedFunds® debit card network. Funds may also be disbursed by electronic deposit to the borrower’s bank account through the ACH network and available approximately 1 to 2 business days after closing or disbursed by check. SpeedFunds® is a registered trademark of OneMain Financial Holdings, LLC.

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This article has been updated from previous postings in 2021-2022. Kia Jackson, Kim Gallagher, and Jessica Leshnoff contributed.