How to Get a Personal Loan (and When It Beats a Credit Card)
A personal loan has no security. You do not risk your car or home. The rate is fixed. The monthly payment is fixed. The date you finish paying is set. This is the main gain over credit cards. You know what will happen. Borrowers with good credit often pay about half the average 20–22% credit card APR (per Bankrate, October 2026) in interest. If you put your card debts into one loan, you pay one fixed payment. The debt has a real end date.
At a glance
- Cost:
- APR typically 7–36%; origination fee 0–8%
- Total time:
- 1–7 days from application to funding
- Steps:
- 6 steps
- Where to apply:
- irs.gov, uscis.gov, travel.state.gov, or your state agency
Last reviewed October 2026 against official sources. Re-checked annually · next review due October 2027.
The Steps
Follow these in order
Each card shows the phase, expected time, and any cost. Data checked against official US sources(October 2026).
0 of 6 steps
- Before You Go 10 min
Know what you are getting — and the main benefit
The main gain of a personal loan is that you know what will happen. The rate is fixed. The monthly payment is fixed. The end date is fixed. The end date is usually 2–7 years from the start. If you have credit card debt, you can put it into one personal loan. The new loan has a lower fixed APR. This can cut your interest costs by a lot. It turns debt that can go on and on into debt with a set end. The debt is sure to end if you keep paying.
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- Before You Go 15 min
Check your credit score first
Check your score for free. Use your bank app or your credit card app. A score of 720+ gets you the low rates in ads. A score of 670–719 is still good. A score below 620 leaves you with fewer choices. Your choices are credit unions, secured loans, or a co-signer. If your score is close to a limit, pay down your cards first. Keep each card below 30% of its limit for a month or two. This can lift your score before you apply.
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- Go 1 hour
Prequalify with 3–4 lenders
Most banks, credit unions, and online lenders let you check if you qualify first. This check is a soft credit pull. It does not hurt your score. Apply to a few lenders. Compare the real numbers. Compare the APR, which includes some fees. Compare the origination fee too. The fee is 0–8%, and the lender takes it from your loan. Compare the length of the loan too. A $10,000 loan with an 8% rate can look good at first. But a 5% origination fee makes it worse than it looks.
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- Fill / Prepare 15 min
Choose the shortest term you can afford
A longer loan lowers your monthly payment. But it raises the total interest you pay. On $15,000 at 12% in total: 3 years costs about $2,900 in interest. In contrast, 6 years costs about $6,114. Pick the shortest loan you can pay for each month. Make sure you can really pay it. Check that there is no fee for paying early. Then you can pay extra at any time with no extra cost.
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- Submit & Pay 1–7 days
Accept, sign, and receive funds
When you accept the loan, the lender does a hard credit pull. This cuts your score by a few points for a short time. Read the Truth-in-Lending box with care. It shows the APR, the finance charge, and the total of all payments. It also shows any fees. Online lenders pay the money by ACH in 1–3 business days in most cases. Banks and credit unions can take up to a week.
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- Follow Up 15 min
Set up autopay and watch for scams
Set up autopay for your loan. Many lenders cut your rate by 0.25–0.5% if you use autopay. Learn this safety rule from the FTC too. A real lender never asks for a fee before you get the loan money. If an offer says "guaranteed approval" and asks you to wire a fee first, it is a scam. Stop all contact at once.
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Calculator
Personal Loan Payment Calculator
Estimate your monthly personal loan payment, total interest, and payoff time — including any origination fee and extra monthly payments.
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Total interest
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Total cost (payments + fee)
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Estimate only. Estimate only. Assumes fixed APR, monthly payments, and no prepayment penalty. Your lender quote governs. Source: Standard loan amortization formula
FAQ
Frequently Asked Questions
What is a real benefit of obtaining a personal loan?
The loan has a fixed rate. It also has a fixed date when the debt ends. Credit cards let you pay only the minimum each month. That can stretch debt out for decades. Card rates can change too. They average about 20–22% (per Bankrate, October 2026), and new card offers can be higher. A personal loan locks in one payment. It sets a date when the debt is gone. For borrowers with good credit, the APR is lower in most cases. The loan has no security too. Your car or house is not at risk.
What credit score do I need?
Most big lenders approve loans from about 580–600, but the best rates need a higher score. Rates below 12% APR need a score of 670–720+ in most cases. Below 620, your real choices are credit unions, secured loans, or a co-signer. See our bad-credit loan guide for more help.
Do personal loans hurt your credit?
Applying for a loan causes a small dip in your score for a short time. This is from the hard inquiry. Checking if you qualify first does not cause a dip. That check is a soft pull. After you get the loan, pay on time. On-time payments build your credit. A loan of this type can also improve your mix of credit. Late payments hurt your score much more than the inquiry does.
Secured or unsecured — which is better?
A loan with no security is the standard personal loan. It has no risk to your things, but the rate is higher. A secured loan has security behind it. The security can be a savings account or a car. These loans are easier to get. They cost less too. But the lender can take the item if you do not pay. Only risk an item you can afford to lose.
How is a personal loan monthly payment calculated?
Your payment is worked out with a standard loan formula. The formula uses the loan amount, the APR, and the length of the loan in months. A higher APR raises the monthly payment. A shorter loan also raises it. A longer loan lowers the monthly payment. But it raises the total interest you pay. The calculator shows your monthly payment. It also shows your total interest and when you will finish paying.
Do extra payments save money on a personal loan?
Yes. Extra monthly payments go toward the principal, which cuts total interest and shortens the payoff time. Enter an extra payment in the calculator to see the effect. Check first that your lender charges no prepayment penalty.
What is an origination fee on a personal loan?
An origination fee is a one-time charge, usually a percentage of the loan amount, for processing the loan. The calculator adds it to your total cost so you can compare the true cost of offers with and without fees.
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