How to Get a Personal Loan in 7 Steps
Getting a personal loan starts with checking your credit, getting pre-qualified and comparing loan offers.
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Updated · 3 min read
Written by
Lead Writer 
Edited by
Head of Content, Personal & Student Loans 
Co-written by
Lead Writer & Content Strategist Shopping for a personal loan doesn’t have to be complicated. Understanding how to get a personal loan — including where to start, what you need to apply and how to compare offers — can help you select the best personal loan.
Below are seven steps to help you navigate how to get a personal loan.
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1. Check your credit
Before you take out a loan, check your credit score to assess your financial picture. A high score gives you a better chance of loan approval and a lower interest rate.
Credit scores typically fall into these categories.
- 720 and higher: Excellent credit.
- 690-719: Good credit.
- 630-689: Fair or average credit.
- 300-629: Bad credit.
» How's your credit? Check your score for free on NerdWallet
Fix any errors on your credit report that might be dragging your score down. You can request a credit report from each of the three major credit bureaus — Equifax, Experian and TransUnion — and dispute wrongly reported missed payments or other inaccuracies.
Be sure to make on-time payments toward credit card and other loan payments, and keep your credit utilization (the amount of credit you use relative to credit limits) low as these are the biggest factors affecting your score.
2. Calculate your loan payments
Knowing your estimated monthly payments can help you decide whether you can afford to take out a loan.
First, determine how much money you need to borrow. You’ll want to make sure the loan amount includes any fees a lender may charge. Origination fees, which range from 1% to 10% of the loan, are typically subtracted from the loan proceeds.
Then, use your credit score to estimate what annual percentage rate a lender might charge. While the APR you receive depends on your unique credit and financial profiles, as well as your lender’s underwriting, the table below shows estimated personal loan APRs based on credit score range.
| Borrower credit rating | Score range | Estimated APR |
|---|---|---|
| Excellent | 720-850. | 13.31%. |
| Good | 690-719. | 16.48%. |
| Fair | 630-689. | 20.23%. |
| Bad | 300-629. | 20.62%. |
Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified through NerdWallet from May 1, 2025, through May 31, 2025. Rates are estimates only and not specific to any lender. The lowest credit scores — usually below 500 — are unlikely to qualify. Information in this table applies only to lenders with maximum APRs below 36%.
Next, consider how long you’ll need to pay off the loan. A longer loan term means lower monthly payments, but you’ll end up paying more in interest.
Once you know your loan amount, rate and term, use our personal loan calculator to determine your estimated monthly payments. The best personal loans have payments that fit comfortably into your budget.
Loan details
Your loan estimate
Monthly payment
$212.47
Total principal
$10,000
Total interest payments
$2,748.23
Total loan payments
$12,748.23
Payoff date
07 / 2030
Show amortization schedule
3. Research and compare lenders
You can get a personal loan from online lenders, banks and credit unions, but some lenders work better for certain borrowers and loan purposes than others. For example, some lenders offer features to help specifically with debt consolidation, others specialize in lending to borrowers with bad credit.
It's a good idea to research different lenders to find one that’s best for your needs. Here are a few key features to compare between lenders.
- Credit score requirements: Online lenders tend to offer loans to borrowers with credit scores across the spectrum, while banks often require good to excellent credit, and credit unions are more likely to accept loan applications from bad-credit borrowers.
- Loan amount and repayment term availability: Personal loan amounts typically range from $1,000 to $100,000 with repayment terms from two to seven years. Look for lenders with loan amounts and repayment terms that match your borrowing needs.
- Funding time: You can expect to receive funds within a week after loan approval, but online lenders typically provide the fastest funding times, sometimes the same or next day after approving the loan application.
- Co-signed, joint and secured loan availability: Some lenders will allow you to add a co-signer or co-borrower to your loan application or pledge collateral to secure a loan. Opting for a co-signed, joint or secured loan may help you qualify or get a lower rate.
Nerdy Perspective
Expert take: Why research lenders?
"I have written or edited almost all of NerdWallet’s personal loan reviews, and one thing is for sure: They all have an ideal borrower in mind. If I had a high credit score and wanted to remodel my home, I’d be on the hunt for a lender that charges the lowest rates and offers large enough loans to finance the whole project. If my credit had seen better days but I needed a good rate on a debt consolidation loan, I’d start with lenders that specialize in consolidation.
This is why doing your research is so important. If you’re rate shopping with lenders that don’t see you as their ideal borrower, you could be missing out on a better offer elsewhere."
Assistant Assigning Editor, Personal Loans
4. Get pre-qualified personal loan offers
Once you’ve identified a few lenders you prefer, it’s time to pre-qualify. Most lenders offer pre-qualification, and it's an important step because it gives you a preview of the loan offers you may receive, including your estimated APR.
Lenders typically perform a soft credit check during pre-qualification that doesn’t affect your credit score. During the process, you'll provide personal information, such as your name, date of birth, income and loan purpose.
Pre-qualify with multiple lenders to compare estimated rates and payment amounts. The best loan offer is typically the one with the lowest APR because that’s the least expensive one.
5. Select a lender and complete your application
Once you’ve selected a lender that matches your needs, you can formally apply for the loan. Application requirements vary by lender, but you’ll likely need:
- Identification: A passport, driver’s license, state ID or Social Security card.
- Verification of address: Utility bills or lease agreement.
- Proof of income: Pay stubs, bank statements or tax returns.
The lender will run a hard credit check that may temporarily decrease your credit score by a few points and can show up on credit reports for 24 months.
Some lenders provide an immediate approval decision while others may take a couple days.
🤓 Nerdy Tip
If your loan application is denied, the lender is required to send you a notice stating why it was rejected or letting you know that you can ask for the reason. Use that information to improve your likelihood of approval in the future. You may need to build your credit score or lower your debt-to-income ratio. 6. Read the fine print
Once you’ve been approved for a loan, carefully read over the terms before signing the loan agreement. In particular, watch for:
- Fees. Prepayment penalties — fees for paying off a loan early — are rare, but lenders may charge other fees, including origination and late payment fees.
- APR surprises. The total cost of your loan, including interest and any origination fees, should be clearly disclosed and figured into the APR.
- Automatic withdrawals. If a lender automatically withdraws loan payments from your checking account, consider setting up a low-balance alert with your bank to avoid overdraft fees.
7. Sign loan agreement and get funded
The final step to getting a personal loan is to sign the loan agreement. Expect to receive the funds within a week. Some lenders may provide same- or next-day funding after approval.
Once you have your funds, make a plan to manage your personal loan payments. Your first payment will likely be due about 30 days after receiving your loan.
Setting up automatic payments can help you pay on time without having to remember any due dates.
Frequently Asked Questions
What do you need to be eligible for a personal loan?
Specific credit score and income requirements for personal loans vary by lender. But most will ask you for basic personal information and proof of income during the personal loan application process.
Can you get a personal loan with bad credit?
Some lenders approve loan applications from borrowers with bad credit (a score below 630). Online lenders and credit unions are more likely to consider bad-credit borrowers than banks. Beware of predatory lenders that offer loans with short repayment terms and interest rates above 36%, the highest rate experts say an affordable personal loan should have.
How does a personal loan affect your credit?
When you apply for a personal loan, the lender will likely run a hard credit check, which can temporarily lower your credit score by a few points. On-time payments can help boost your credit while missed payments will hurt it.
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