How to Get A Personal Loan & Find a Lender

By Tom Burchnell
how to get a personal loan

When you need money, a personal loan is usually one of the first things that come to mind. Personal loans provide versatility, enabling you to get the proper funding for just about anything you need, including:

  • Consolidating credit card debt
  • Paying medical bills
  • Covering the cost of a home or automotive repair
  • Making a large purchase

No matter the reason for needing a personal loan, it’s important to find a lender. Here are a few tips to help you find one that best meets your needs. 

Personal Loan Requirements

When you apply for a personal loan, the lender looks at several factors to determine your eligibility. These same factors also determine the details of your loan, such as your rates, terms, and any fees the lender might charge. 

Credit History

Credit history is one of the biggest factors in determining your eligibility for a personal loan. Personal loan lenders don’t just look at your credit score. They assess the various factors that make up that score: your payment history, the age of your credit history, and your debt-to-credit ratio. The better your credit history, the higher your credit score. A higher score generally means you have a better chance of being approved and getting favorable rates and terms.

Debt-To-Income Ratio

Your debt-to-income (DTI) ratio is different from the debt-to-credit ratio which comprises a portion of your credit score. This ratio compares your total debts to the sum of your income sources. An optimal DTI is 35% or less. Most personal loan lenders will accept a DTI of up to 43%.

Employment History

Personal loan lenders need to know that you can repay what you borrow. They want to see consistent (and sufficient) income. They also want to see steady employment. Acquiring a personal loan without income proof is typically harder to achieve, however, not impossible.


Many personal loans are unsecured. Others require collateral. Secured loans generally have lower interest rates, but the value of your collateral will play a role in how much you can borrow. 

Liquid Assets

Some lenders want to know about your liquid assets, including savings accounts, stocks, and bonds. In addition to providing security for the lender, these assets help you get approved and obtain a more favorable rate.   

How to Get a Personal Loan

Not all personal loan lenders are equal. Different lenders offer different rates, terms, and fees. Here are a few tips on how to find the right lender for you. 

Get Several Quotes

Many people apply to the first provider they find. Instead, it’s better to get quotes from at least three different lenders. If the lender allows, get pre-approved. This way, you can see your potential rates and terms without a hard credit inquiry. 

Compare Your Options

Once you have your quotes, compare them. What are the rates and terms? Pay closer attention to the annual percentage rate (APR) than the interest rates. Are the rates fixed or variable? Variable rates mean your monthly payments may change during your repayment period. In contrast, a fixed-rate loan offers predictability with payments that remain consistent.

Pay Attention to the Total Cost

The rate and terms aren’t the only factors that determine the cost of your loan. Pay attention to additional charges, such as late payment or origination fees. A lender with a lower APR may also have a higher origination fee, making the loan more expensive in total.

Read the Fine Print

You should also take a close look at the loan’s fine print. Keep an eye out for:

  • Prepayment penalties
  • How often a variable rate loan is adjusted
  • If automatic withdrawals are required
  • What payment options are available
  • If the lender reports your payments to the credit reporting agencies

Find a Personal Loan Lender

If you’re having trouble obtaining a personal loan, the first thing to do is stay calm. For example, someone who has had a loan denied due to poor credit or a high debt-to-income ratio can simply take some time to improve their financial situation and apply again later. When the need for capital is urgent, consider the following options.

Online Lenders

A bank isn’t the only place to obtain a personal loan. Since traditional banks often have stricter requirements, a credit union may be more accommodating.

Or, you can try one of the numerous online lenders. With fewer requirements and restrictions, online lenders make it easier to get approved. Plus, rates and terms may be more favorable. Some lenders also specialize in supporting borrowers who have low or nonexistent credit rates.

Home Equity Loans or Lines of Credit

If you own your own home and can’t get approved for a personal loan, you may be able to take out a home equity loan or line of credit. These options allow you to borrow against your home’s equity. Your home secures the loan or line of credit, offering a better APR than what you might get with an unsecured personal loan. 

Like personal loans, you can use a home equity loan or line of credit for just about anything. The biggest challenge, however, is that defaulting on such a loan can result in losing your home. If you feel confident in your ability to repay what you borrow, these options may work for you. Either way, keep in mind all the associated risks when weighing your options.

Sell Your Home

Aside from taking out a loan, another option is to sell your home. The challenge with this approach is that you need to find a new place to live. 

However, selling your home doesn’t always have to mean moving. For example, a sale-leaseback program allows you to sell your home and remain as a renter. This ensures that you get the funds you need while staying in the residence you love. 

The program isn’t a loan. All you need to do is pay rent each month. At any given time during your lease, you can choose to move or repurchase your home at an agreed-upon price. 

Key Takeaways

Personal loans provide you with the money you need to meet your financial obligations. Talk to a financial expert and take the time to compare your options to find the right lender for you. If you can’t get approved for a personal loan, take a look at what other options might be available. With the right solution, you can meet your needs while continuing life as normal.

Tom Burchnell
Written by Tom Burchnell
Director of Product Marketing

This article is published for educational and informational purposes only. This article is not offered as advice and should not be relied on as such. This content is based on research and/or other relevant articles and contains trusted sources, but does not express the concerns of EasyKnock. Our goal at EasyKnock is to provide readers with up-to-date and objective resources on real estate and mortgage-related topics. Our content is written by experienced contributors in the finance and real-estate space and all articles undergo an in-depth review process. EasyKnock is not a debt collector, a collection agency, nor a credit counseling service company.