5 Steps to Successfully Apply for a Personal Loan Online

apply for a personal loan online

No matter how well-versed you are in managing your personal finances, it’s all too easy to miss a payment when you’re balancing multiple debts.

Additionally, you may need extra funds for the holiday season or to make much-needed improvements to your home. This is where a personal loan can help ease some of your financial stress.

As someone who recently applied for a personal loan online, doing so has greatly improved my financial situation. If you’re looking for ways to get your hands on some extra money, here’s how to apply for a personal loan online, what kind of research to do ahead of time, and what mistakes to avoid.

What is a personal loan?

There are two major types of loans you can qualify for: secured debt and unsecured debt.

Secured debts, including auto loans and mortgages, are backed by an asset, such as your car or home. If you’re unable to repay a secured debt, your assets will be used as collateral and possibly repossessed to pay back the balance.

Unsecured debts, including credit cards and personal loans, are not backed by any particular asset. If you default on an unsecured debt, your assets are not held as collateral.

One excellent use of a personal loan is to combine several outstanding balances on different credit cards. You can consolidate multiple credit cards into a single personal loan with better terms.

Not only does this help streamline your monthly payments into one transaction, you’re also able to save loads of money on interest fees every month.

How to apply for a personal loan online

If you’re planning on applying for a personal loan online, here are the exact steps you need to take.

1. Check your credit score

Lenders will use your credit score to verify whether or not you’ll be approved for a personal loan and what terms and conditions to offer you. This is why the first step to apply for a personal loan is to check your credit score.

You can do so by using one of these free tools to verify your credit score.

The higher your credit score, the better interest rate and other terms you’ll be able to qualify for when applying for a personal loan. Here’s how credit score numbers stack up:

  • Excellent (750-850)
  • Good (700-749)
  • Average (650-699)
  • Poor (600-649)
  • Bad (300-599)

Is your credit score lower than you’d like it to be? Here’s how to raise it.

2. Compare personal loan rates and fees

Before settling on a personal loan, take time to compare various financial companies, interest rates, and other fees associated with each loan. If you have a good working relationship with your local bank or credit union, check with them first to compare their rates.

When I was comparing personal loan rates and terms, I went with Discover Personal Loans for several reasons. For one, I’ve been a long-time customer of theirs and knew they would want to get me a good deal. Secondly, they offered me one of the best rates at 8.89% for the full loan amount I needed.

Terms and conditions to keep in mind when you apply for a personal loan online include the following:

  • Interest rate
  • Monthly payment amount
  • Payoff period
  • Loan amount
  • Upfront fee
  • Application or origination fee
  • Prepayment penalty
  • Availability in your state

The best financial institutions that provide personal loans online usually do not have origination fees or prepayment penalties associated with them. Depending on your credit score, a decent interest rate ranges from 5.95% to 14.49% with loan amounts of $35,000 or less.

3. Gather up necessary info

Once you finalize the company you want to fund your personal loan, it’s time to gather up your personal information. You’ll need your full name, address, Social Security number, proof of income, driver’s license number, and the amount you want to borrow.

Often within just a few minutes of filling out the online application form, you’ll find out how much you’re approved for and at what interest rate. You may have to apply for more than one personal loan with various companies in order to compare the best interest rate, fees, and other terms.

Thankfully, though, this process is pretty simple since it can all be done online within a few short minutes.

4. Follow up with a personal loan rep

Although you can apply for a personal loan online, a representative will usually call you within 24 hours to finalize the details.

If you’re using your personal loan to consolidate other debts, you’ll need to give your loan issuer information regarding the other accounts you’re consolidating. The process will take two to three days for your other outstanding debts to be transferred over to this new personal loan.

Several of the representatives I spoke to were actually very helpful. After deciding to change the payment terms, the customer service rep was nice enough to change the payoff period from three to four years.

If you’re interested in customizing the terms of your personal loan, speaking with an actual person is a very helpful idea — you may be pleasantly surprised at what can be accomplished with a phone call.

5. Pay down high-interest debt faster

There’s no doubt that choosing to take out a personal loan can be a useful strategy for paying off debt or reducing the stress of a financial emergency.

The only drawback? Since a personal loan is unsecured debt and not backed by an asset, it’s completely dependant upon your credit history. If you have great credit, then applying for a personal loan is usually a wise choice.

Use these steps to apply for a personal loan online and start making strides towards your other financial goals.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. 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)
  2. Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.29% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. 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 5.29% APR assumes current 1-month LIBOR rate of 1.34% plus 4.20% 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.

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: 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.
  2. 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 us 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, our 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.
  3. Automatic Payment Benefit: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan 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. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.39% - 29.99%$1,000 - $50,000Visit Upstart
5.29% - 14.24%1$5,000 - $100,000Visit SoFi
8.00% - 25.00%$5,000 - $35,000Visit Payoff
5.99% - 16.24%2$5,000 - $50,000Visit Citizens
5.99% - 35.89%$1,000 - $40,000Visit LendingClub
5.25% - 14.24%$2,000 - $50,000Visit Earnest
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Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.