Skip to main content
How to Get a Personal Loan

How to Get a Personal Loan

By Jessica Leshnoff • December 18, 2018

Whether you’re working to get your finances back on track or dealing with unexpected expenses, a personal loan may be an option worth exploring.

If you’re trying to figure out if a personal loan could help your situation, this guide will walk you through the basics of personal loans, including how to get one and if it’s the right choice for you.

1. Evaluate Your Financial Situation

Before applying for a loan, even a small personal loan, it's important to consider how it will impact your finances.

An advantage of personal loans is that, unlike credit cards, the repayment periods are fixed. That means you'll know exactly when you'll pay it off and how much you’ll be paying each month. (A great way to figure out your estimated monthly payments is by using a personal loan calculator.)

There are two main types of personal loans: secured and unsecured. The one that’s right for you will be based on your financial situation, including your credit score.

  • Secured loans require collateral as part of the loan terms. Collateral is a valuable possession that secures a loan, such as a car. Providing collateral may enable borrowers to qualify, sometimes for larger amounts and/or lower interest rates. If a borrower doesn’t repay a secured loan, the lender may take possession of the collateral. If your credit score is on the lower side, and you need a loan now, you may want to consider applying for a secured loan.

  • Unsecured loans do not require collateral, but the interest rates tend to be higher than those for secured loans. Unsecured loans may be easier for borrowers with better credit to obtain, as they’re viewed as presenting less risk.

For borrowers with less-than-perfect credit scores, another option may be getting a loan with a cosigner. A cosigner is someone who is legally obligated to repay the loan if the primary borrower does not.

2. Check Your Credit

Before applying for a personal loan, start by checking your credit. Since the majority of lenders check your credit history when you apply for a loan, it’s a good idea to take a look beforehand to make sure it’s correct and avoid surprises.

3. Research Different Lenders

Who has the best personal loans really comes down to what lender can provide the right solutions to meet your needs. Some offer just unsecured loans, while others offer both secured and unsecured.

Research is key when it comes to finding the right personal loan lender, so be sure to really examine different lenders, even if it’s just for a small personal loan. To avoid scams, explore online lender reviews on trustworthy sites like TrustPilot and look up each on the Better Business Bureau to check ratings and read customer reviews.

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 (i.e. passport or driver's license)
  • Social Security Card
  • Proof of Residence – confirmation of your address (i.e. a driver's license with your current address, a utility bill, or a signed lease)
  • Proof of Income – evidence of income (i.e. a paystub)

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

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

After You Receive Your Personal Loan

Once you apply for a loan, are approved and receive it, it's important to stay current with your payments. By consistently making the monthly payment on or before the due date, even for small personal loans, you may be able to improve your credit score over time.

Remember that getting a personal loan doesn't have to feel overwhelming. With some basic research on what bank or lender has the best personal loans to meet your needs — and the right planning — obtaining a personal loan can be a smooth, surprise-free experience.


*This article has been updated from its original posting on January 22, 2016.
Katie O'Shea contributed to this article.

The information in this article is provided for general 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. It is not intended to be and does not constitute financial, legal or any other advice specific to you the user or anyone else. The companies and individuals (other than OneMain Financial’s sponsored partners) referred to in this message are not sponsors of, do not endorse, and are not otherwise affiliated with OneMain Financial.