How to apply for a personal loan

Online marketplaces like Credit Karma can give you a fast and easy way to compare personal loan offers from multiple lenders. Here’s how to apply for a personal loan.

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When you need a personal loan for credit card debt consolidation, home improvements or other purposes, where do you go? Do you take the time to shop around — or are you focused on getting money right away?

Comparison shopping is a good idea when you’re making a big financial commitment like taking out a loan. And online lenders have made applying for a personal loan fast and convenient.

Rather than shopping around for personal loans by going directly to multiple lenders, you can use online marketplaces like Credit Karma to research and compare personal loan offers all in one place.

Here’s how to comparison shop — and apply — for a personal loan.

Check your Approval Odds for a loan Get Started

1. Check your credit

Before starting the application process for any kind of loan, it’s a good idea to review your credit.

Credit history and credit scores are among the financial factors lenders will generally consider when reviewing your loan application. Your credit history can affect whether a lender will approve you for a loan and the interest rate it offers you. Good credit can typically make it easier to get a loan and a favorable interest rate.

You can use the Credit Karma app to check your Equifax® and TransUnion® credit reports for free. You’ll need to sign up for an account to use the app and get your credit scores, but it’s always free to join.

Lenders may also consider your debt-to-income-ratio when considering you for a loan — which is the total of all the debt payments you must make each month divided by your gross monthly income. This ratio helps lenders understand how well you’ll be able to manage repayment if they give you a personal loan.

2. Apply for prequalification

Once you’ve checked your credit, you’re ready to apply for prequalification.

Prequalification is an application process where a lender reviews the information you’ve shared, and gives you a loan offer that you might qualify for. When you get prequalified, the lender will typically pull a soft credit inquiry, which won’t affect your credit scores.

While getting prequalified doesn’t mean you’re approved for a loan, it helps you to understand whether you’re likely to be approved and the loan terms you may qualify for. If you decide you want to pursue an offer you’re prequalified for, you’ll still need to submit a formal application directly with the lender — that will then make a hard inquiry into your credit, which can affect your credit scores.

You’ll typically provide some basic information:

How much you want to borrow

How you’ll use the money

Your annual income

Your employment status

The last four digits of your Social Security number

You can also search loan options without getting prequalified.

Check your Approval Odds for a loan Get Started

3. Compare loan offers

Once you submit your information, you may receive some information if you prequalify, such as …

Loan amount you may qualify for

Estimated monthly payment amount

Estimated interest and fees

Estimated annual percentage rate, or APR

Loan term

Again, it’s important to remember that these are potential offers and tentative rates and terms. You’ll get definitive information about the loan a lender’s willing to offer you only after you formally apply directly with the lender.

Things to consider

When you’re reviewing your loan options, be sure to compare …

APR — This is how much it will cost you to borrow money, including the interest rate and any potential fees. Learn more about APR and why it’s important.

This is how much it will cost you to borrow money, including the interest rate and any potential fees. Learn more about APR and why it’s important. Loan term — Generally, loans with a longer term have a lower monthly payment. But they could cost more in interest in the long run.

Generally, loans with a longer term have a lower monthly payment. But they could cost more in interest in the long run. Origination fee — Some lenders charge this fee for making a loan.

All of these factors can affect the total cost of your personal loan.

4. Apply

Once you comparison shop and choose an offer, you can complete your loan application.

Remember, prequalification doesn’t guarantee that you’ll be approved for a loan. You’ll still need to submit additional information to the lender in order to complete your application.

The lender will tell you exactly what you need to submit. Some information might include …

Monthly housing cost

ID verification

Social Security number

Income verification

Finalizing your loan approval will typically result in a hard credit inquiry — this may affect your credit scores, but shouldn’t do any long-term damage.

5. Close on your personal loan

Once you’ve submitted your loan application, the lender will review it, decide whether to approve you for the loan, and send you final loan documents if you’re approved. These documents typically detail the terms of your loan, including the interest rate, length of the loan, the loan amount and your monthly payments.

Once you’ve reviewed the details, you’ll sign the documents and your funds will be deposited into your account. With online lenders this can happen quickly, sometimes in as little as a day.

Bottom line

With so many lenders offering personal loans, it’s in your best interest to shop around and find a lender that will offer you the best terms. People who shop and apply for personal loans online have the highest levels of overall satisfaction among personal loan borrowers, and the majority say they completely understand their loan applications, according to a J.D. Power consumer survey.

Check your Approval Odds for a loan Get Started

How to Apply for a Personal Loan

The process of applying for a personal loan may feel overwhelming if you don’t know where to begin or the documents you need.

Below are five steps and common questions to help you through the process of applying for and choosing the best personal loan for your financial situation.

Step 1: Check your credit

Start the process by checking your credit. The rate and loan amount you receive depend a lot on your credit, so checking your credit report lets you spot and fix any errors — like a falsely reported late payment — and strengthen your score before applying for a personal loan.

How does my credit score impact personal loan offers?

Good- or excellent-credit borrowers (those with FICO scores of 690 or above) typically receive lower rates and have a wider group of lenders to choose from. On the other hand, bad- and fair-credit borrowers (FICO scores of 300 to 689) may have fewer options and receive rates at the high end of lenders’ ranges.

How do I see my credit score for free?

You can get a free credit score and report with NerdWallet. You can also request free credit reports directly from the three major credit bureaus by using

Step 2: Pre-qualify and compare offers

Pre-qualifying for a personal loan gives you a preview of estimated rates, monthly payments and terms before you submit your application. Most online lenders and some banks let you pre-qualify on a desktop or mobile device.

See if you pre-qualify for a personal loan — without affecting your credit score. Just answer a few questions to get personalized rates from our lending partners. Loan purpose Select your option Debt Consolidation Medical Home Improvement Credit Card Consolidation Auto Motorcycle Major Purchase Start a Business Education IRS Tax Debt Other Loan amount Credit score Select your option Excellent Good Fair Poor Employment status Select your option Full-time Part-time Self-employed Unemployed Military Retired Other See If You Pre-Qualify

Will pre-qualifying affect my credit score?

No, pre-qualifying for a personal loan includes a soft inquiry, which doesn’t affect your credit score.

What do I need to pre-qualify for a personal loan?

To pre-qualify, you’ll need to provide information such as:

Loan purpose. Unsecured personal loans can be used for almost anything.

Requested loan amount. Lenders typically offer personal loans from $1,000 to $50,000.

Preferred monthly payment. Personal loans usually have monthly payments spread over two- to seven-year terms.

Personal and financial information. This could include your name, email address, date of birth, address, income, Social Security number and education.

How long will it take to pre-qualify?

Pre-qualifying can take a few seconds or minutes after you submit your information. If you qualify for a loan offer, a new page will appear showing your potential rates and terms.

You may also receive an email from the lender with contact information for customer service and a list of the next steps to help you complete the application.

Step 3: Choose your lender and loan

With offers from multiple lenders, compare your options and choose a lender to move forward with.

How do I choose the best personal loan?

One of the most important factors is the annual percentage rate. It is the total cost of borrowing and includes your interest rate and all additional fees.

The lower the APR, the lower the cost of the loan. APR will vary based on factors like your credit score and income.

Make sure you can comfortably afford the monthly payments. Research any features that are important to you, like flexible payment options, help with building your credit or direct payment to creditors if you’re consolidating debt.

Step 4: Gather loan documents

Once you’ve chosen a loan with the rate, term and features that best fit your budget, it’s time to complete the application.

What do I need for my loan application?

You’ll need to provide some or all of the following:

Proof of identity, including a government-issued ID, recent utility bill or lease agreement.

Proof of address.

Proof of employment status.

Education history, including the highest degree you’ve earned and graduation date.

Income details, including bank statements or pay stubs, and proof of additional income like retirement, alimony or child support.

Social Security number if it wasn’t submitted during pre-qualification.

Step 5: Submit your application and get funded

Carefully read the loan’s terms and conditions, and then submit your application.

The loan agreement certifies that all the information you’ve submitted is correct. It also authorizes the lender to verify your information, such as contacting your employer and pulling your credit reports.

How will my loan application affect my credit score?

Submitting the formal loan application triggers a hard credit inquiry, shaving up to five points off your FICO score and possibly remaining on your credit report for just over two years.

How long will it take for my application to be approved?

If everything checks out, you could get same-day approval. If the lender requests additional documents, approval may take longer.

How long will it take to get funded?

After you are approved and sign the loan agreement, how quickly you receive the money will likely depend on the type of lender you choose. Many online lenders can provide same-day funding, while some banks may have the money to you in five days or sooner.

How to Apply for a Personal Loan in 8 Steps

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, commissioned or otherwise endorsed by any of our network partners.

Applying for a personal loan is similar to applying for any other type of financial product, like a credit card or auto loan. You’ll need to provide your financial information, and the lender will either approve or deny your request for funding.

But learning the ins and outs of how to apply for a personal loan can help you qualify — and ensure you get the best possible APR and terms available to you. You would know to prequalify to confirm eligibility and check rates without harming your credit score, for example.

See a complete breakdown of the personal loan application process below.

1. Estimate your need – and project your repayment

When you start filing personal loan applications, you’ll be asked how much you need to borrow. The answer might be obvious to you already, or it might take some research.

If you have about $10,000 worth of credit card debt that you’re hoping to consolidate with a personal loan, for example, you’ll be borrowing about that figure. If you’re considering a swimming pool loan, on the other hand, you might need to design your pool and get a few professional estimates before knowing how large of a personal loan you’ll need.

From there, a good rule of thumb to follow is that you should only borrow what you can reasonably afford to repay. If you’re planning on borrowing a certain amount, you could employ a personal loan calculator to see what APR or interest rate and repayment term would result in a monthly payment that realistically fits your budget.

Once you have a better idea of your desired loan amount and repayment term, you can start working to qualify for the lowest possible rates.

2. Check your credit score

Unsecured personal loans don’t require collateral. Because of this, personal loan lenders determine your eligibility based on your financial history, including your credit score, income and total debt.

Typically, the higher your credit score is, the lower your APR will be. APR, or annual percentage rate, is the annualized cost of borrowing a loan. It includes your interest rate plus any other fees, such as a loan origination fee.

*LendingTree Personal Loan Offers Report (June 2021)

Borrowers with bad credit may not qualify for a personal loan, or might only qualify for one with a high APR, which would make it an expensive borrowing option. Before you apply for a loan, do your research to find out your credit score and see what your potential APR might be.

How do I check my credit?

You can request a free copy of your credit reports through all three credit bureaus (Equifax, Experian and Transunion) for free on If you find any mistakes on your credit report, read our guide on how to dispute credit report errors.

You can also check and monitor your credit score for free on the LendingTree app — Click one of the buttons below to download:

3. Consider different types of personal loans

As you’re checking your credit report and improving your credit score, begin thinking about the type of personal loan that will best suit your needs. You might compare unsecured and secured loans, for example, before ruling one out. Most borrowers will prefer unsecured loans to avoid posting collateral, but unsecured loans require stronger credit histories.

If you decide on an unsecured loan, you’ll notice that lenders advertise different types. Consider the following:

These are all personal loans per se, but how you plan to employ the funds could affect your choice of lender. If you’re borrowing to consolidate credit card debt, for example, you might opt to work with a lender like Happy Money that specializes in refinancing credit card balances.

4. Get prequalified through multiple lenders

Once you know your borrowing purpose and credit score, you can start to research lenders and see if you meet their personal loan requirements. Some lenders will list a minimum credit score requirement on their website, but not all lenders do this.

Where can I borrow a personal loan?

You can find personal loans at many types of financial institutions, including:

Most lenders let you check your eligibility for a personal loan simply by entering some financial information without a hard credit check. This is called personal loan prequalification, and it’s a good way to see if you’re eligible for a personal loan and compare estimated APRs across multiple lenders.

What do I need for personal loan prequalification?

Expect to be asked for basics like:

Borrowing purpose

Requested loan amount

Name and address

Estimated annual income

Citizenship status or Social Security number

Whether you’re applying with a co-borrower

LendingTree’s personal loan marketplace allows eligible borrowers to compare multiple loan offers using just one form. See if you prequalify by clicking the button below.

5. Consider ways to increase your odds of approval

Lenders look at your credit history and debt-to-income (DTI) ratio when determining your eligibility for a personal loan. If you have bad or no credit or a low income, then you may not qualify for a personal loan at all. If you didn’t get any personal loan offers, consider these steps to become a more eligible applicant:

Improve your credit score. Consider signing up for a secured credit card or paying down credit card debt to lower your credit utilization ratio.

Consider signing up for a secured credit card or paying down credit card debt to lower your credit utilization ratio. Increase your income. Find a pathway to a promotion at work, ask for a raise or consider taking on another source of income.

Find a pathway to a promotion at work, ask for a raise or consider taking on another source of income. Consider a secured loan. Banks and credit unions may let you borrow a personal loan against your savings account or certificates of deposit.

Banks and credit unions may let you borrow a personal loan against your savings account or certificates of deposit. Ask a cosigner for help. You may have a better chance of getting a loan if you have a cosigner with good credit to help.

6. Compare your loan offers

If you’ve received multiple loan offers, you’ll want to choose the best one based on a number of factors, including:

Estimated APR. Since your estimated APR is the total annualized cost of borrowing, the loan offer with the lowest APR is typically the cheapest borrowing option.

Fees and penalties. Many personal loans come with an origination fee of 1% to 8% of the total cost of the loan, which is taken from the balance of the loan or tacked on top of it. Some lenders charge a prepayment penalty for paying off the loan before the term expires.

Loan amount and length. Longer, larger loans will cost you more over time since you’ll be paying more in interest. Be careful not to overborrow, or else you’ll end up paying interest on money you didn’t need.

Collateral required. Unsecured personal loans don’t require collateral, but borrowers with subprime credit may consider a personal loan that’s secured by a car title or savings account in order to get better borrowing terms. Tread carefully: If you don’t repay the loan, the lender may seize your collateral.

Monthly payment. Before you take out a loan, make sure the monthly payment fits within your budget. Use the calculator below to estimate your personal loan monthly payment.

7. Gather your documents and formally apply

Once you’ve settled on a loan offer, you’ll need to formally apply through the lender. This requires a hard credit check, which will impact your credit score, so it’s good to file formal applications within a brief period.

However, hard credit inquiries aren’t necessarily a bad thing. A hard credit inquiry only lasts on your credit report for two years, and it will only affect your credit score for one year, typically. Still, it’s best to do your research and see if you prequalify for a loan to avoid unnecessary hard inquiries.

Once the lender has all of the information and documents they need to make a decision, your loan will typically be approved or denied on the same day you apply.

What do I need to get a personal loan? You’ll need to provide documents and information that verify your identity, income and address. Examples include a driver’s license, valid Social Security number, pay stubs, bank statements and tax returns. Proof of address may include a utility bill, lease agreement or voter registration card, for example.

8. Close on the loan and receive your funds

If you’ve been approved for a personal loan and you decide to accept the offer, then you’ll close on the loan. You’ll sign a loan agreement, which can typically be done online without having to scan documents or go to a branch in person. Make sure you read your personal loan agreement carefully so you fully understand the terms.

Your loan will be funded after you close on the loan. Typically, your personal loan funds are deposited directly into your bank account. You can then use the funds for any reason you see fit.

How long will it take for my personal loan to be funded?

The funding timeline varies from lender to lender; some lenders offer same-day personal loan funding, while others may take a few business days or longer to fund your loan.