You’ve decided that you want to apply for a personal loan. Maybe it’s a loan to buy that new car, pay for a wedding, or refinance credit card debt.

Whatever the reason, it’s important to make sure your financial house is in order first.

How to apply for a personal loan

Here is a list of what you should do beforehand, as well as what you need to have ready when it’s time to apply for a personal loan.

1. Know what type of personal loan you need

Before applying for the loan, you should do some homework. Learn about who offers the type of loan, what the going interest rates are, and the general length of time it will take to pay the loan off based on the amount you plan to borrow.

Choices may include banks, credit unions, and other financial institutions. Both local brick and mortar and online lenders are options.

2. Ask plenty of questions

When speaking with a prospective lender, be prepared to ask a lot of questions. A good motto: ask, don’t assume.

Ask them about their application process. Make sure you understand what types of documents and information that they will be seeking from you. Understand any and all fees that you may incur. These might include origination fees or down payments.

3. Know what’s on your credit report

It’s important to check your credit reports before a prospective lender does (you can get yours for free at annualcreditreport.com) to avoid wasting your time applying for a loan for which you won’t qualify.

You will want to understand what is on your reports and be prepared to address any adverse items. Even better, you will have the chance to fix any issues ahead of time.

Equally as important is to check your credit report for mistakes. If there is a negative item reported that’s an error, you can contact the credit reporting agency to have it corrected. Even if this correction is not completed by the time the lender pulls your credit, you can show them the correspondence with the credit bureau and your efforts to have the situation corrected.

4. Have the documents required for loan approval ready

When it comes time to apply, you will need to be able to document your income, employment history, assets, any other debt you have, and other financial metrics they may request.

Most likely, you should have the following items handy:

• Recent income tax returns (generally two years)
• Recent pay stubs
• W-2 forms from the past two years
• A business financial statement and 1099 forms if you are self-employed
• A list of your assets and your liabilities, in short a personal financial statement

5. Be realistic about your situation

As with any financial transaction, you need to be realistic about your expectations. If your credit score is low or you have a spotty employment history, you might qualify for the loan you had in mind. You may be denied outright or the interest rate and terms may be less desirable.

In this case, you can look at options like a secured personal loan or even borrowing from a trusting family member. Other options here might include getting someone to cosign your loan or paying a much higher interest rate than you would like.

6. Keep an eye out for scams

Financial fraud and scammers are sadly all over the news today. Applying for a personal loan is no exception to this situation. There are any number of loan application scams, especially if your finances aren’t in top shape.

With the advent of online lenders, you need to be careful to protect yourself from fraudsters posing as lenders. Be careful about sending any money for origination fees or supplying personal financial information that could be used to commit identity theft.

Applying for a personal loan is like anything else — be confident going into the process. However, If you don’t receive a loan at terms that will work for you, or worse, if you feel that you are being taken advantage of, walk away from the process.

If you have a good credit score, earn a good salary, and pay your bills on time, you shouldn’t have any problems convincing a personal loan lender to do business with you.

Applying for a personal loan is a business transaction just like any other. As such, you will want to be prepared. Do your homework and get the required information and documentation together before applying. Have a businesslike attitude and be confident when applying for your loan.

Interested in a personal loan?

Lender	Rates (APR)	Loan Amount
1 Includes AutoPay discount. Important Disclosures for SoFi. 2 Important Disclosures for Citizens Bank. SoFi Disclosures Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org) Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.17% APR to 11.32% APR (with AutoPay). SoFi rate ranges are current as of July 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 4.99% APR assumes current 1-month LIBOR rate of 1.22% plus 3.95% margin minus 0.25% autopay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Citizens Bank Disclosures Personal Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2017, the one-month LIBOR rate is 1.23%. Variable interest rates range from 6.02% – 15.97% (6.02% – 15.97% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms and presence of a co-applicant. Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with Citizens Bank at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, Citizens Bank checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan. Automatic Payment Benefit: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
	5.67% - 29.99%	$1,000 - $50,000	Visit Upstart
	5.17% - 14.24%1	$5,000 - $100,000	Visit SoFi
	8.00% - 25.00%	$5,000 - $35,000	Visit Payoff
	5.99% - 16.24%2	$5,000 - $50,000	Visit Citizens
	5.99% - 35.89%	$5,000 - $50,000	Visit LendingClub
	5.25% - 12.99%	$2,000 - $50,000	Visit Earnest