How to Qualify for a Personal Loan

 Order a copy of your credit report

Although your credit score represents your creditworthiness, it doesn’t show you the full picture. For a deeper dive into your financial past, order a free copy of your credit report from

You can get a free report once a year from each of the three major credit bureaus: Equifax, Experian, and TransUnion. It will show any outstanding debt, along with your history of repayment and other factors that affect your credit score.

Take a close look at your credit report so you can see areas where you’re on track, as well as areas where you can take steps to improve. Also, be on the lookout for any reporting mistakes.

3. Pay your bills on time

If your credit score is low, you could try to improve it by paying your bills on time.

On-time payments will help increase your credit score and, as a result, boost your chances of getting an unsecured personal loan.

“One of the main qualifiers for unsecured personal loans is your credit score, so folks should get to work on beefing that up before applying,” said Bakke.

Even if your score is high enough to qualify for a personal loan, increasing it also could snag you lower interest rates.

4. Pay down your debt

Your debt-to-income ratio is another major factor affecting your credit score. If you have a high ratio, paying down your debt could help boost your score.

Come up with a plan to conquer your debt, whether by making extra payments or increasing your income by taking on a side hustle.

You also might open a new credit card to reduce your ratio, but be careful to not spend more than what you can afford just because you have access to more credit.

After all, this will increase your debt-to-income ratio again, hurt your credit score, and make it difficult to get an unsecured personal loan.

Also, keep in mind that opening too many new lines of credit in a short time could hurt your score.

5. Show you have a stable income

“A lender is going to look at other factors such as income and employment history,” said Ryan Skidmore of Lift Credit. “They want to ensure that you are getting enough money to make on-time payments.”

While lenders look at your credit score to understand your financial past, they typically also consider your income as a sign of your financial future.

Proof of income, along with a stable employment history, shows the lender that you’ll be able to manage repayment over the life of your loan. Unstable employment, on the other hand, could hurt your chances of qualifying.

6. Submit a joint application with a creditworthy cosigner

Besides improving your credit score and boosting your income, another step you can take to get an unsecured personal loan is applying with a creditworthy cosigner.

If your credentials are weak, your cosigner’s credit score and income could make up for them.

“Many lenders are more than willing to give loans to someone with bad credit if someone with a good credit score is willing to cosign the loan,” said Skidmore. “A cosigner commits to being responsible to pay the loan if the borrower is unable to do so.”

7. Find the right lender

Although lenders look at similar factors when considering you for a loan — credit score, income, history of debt repayment — each company sets its own underwriting requirements.

You might have a better chance of approval if you have a relationship with the lender, whether it’s a bank or local credit union.