Personal Loans: The Complete Guide (2024)

FAQs

What to say to get approved for a personal loan? ›

The easiest banks to get a personal loan from are USAA and Wells Fargo. USAA does not disclose a minimum credit score requirement, but their website indicates they consider people with scores below 640, so even people with bad credit may be able to qualify.

HDFC Bank offers pre-approved loans to customers in 10 seconds flat*. Non – HDFC Bank customers can get loans in 4 hours. If you've wondered how to get an instant loan, wonder no more.

In general, lenders extend $30,000 loans to borrowers with good to excellent credit, which is typically 670 and higher. But there may be lenders who lend to borrowers with bad credit. If you're having difficulty qualifying, you may consider getting a cosigner or co-borrower to help you get approved for the loan.

To qualify for a personal loan, borrowers generally need a minimum credit score of at least 580 — though certain lenders have even lower requirements than that. However, your chances of getting a low interest personal loan rate are much higher if you have a “very good” or “excellent” credit score of 740 and above.

Personal loans with essentially no approval requirements typically charge the highest interest rates and loan fees, although they may deliver funds fast. Some of the easiest loans to get approved for if you have bad credit include payday loans, no-credit-check loans, and pawnshop loans.

Before deciding to get a personal loan, you must consider potential downsides, such as high interest rates, steep fees and a hit to your credit score if used incorrectly.

What situation can not be used for a personal loan? ›

An unexpected medical emergency or a sudden financial crunch in the family at a time when one is not able to raise money through physical assets such as gold are good enough reasons for availing a personal loan. But such loans should not be taken to fund extravagant expenses such as vacations, say financial planners.

The lender needs to determine whether the money will be used for something they allow. Debt consolidation, making large purchases or emergency expenses are all common uses for personal loans.

A well-written loan request letter should include basic details of the business, a clear explanation of the loan's purpose, evidence of a feasible repayment plan, and a professional and courteous closing.