"Money" via Nick Ares on Flickr, Creative Commons licensed
"Money" via Nick Ares on Flickr, Creative Commons licensed
“Money” via Nick Ares on Flickr, Creative Commons licensed

If you have high-interest credit card debt or outstanding bills, you may be considering taking out a personal loan. A personal loan typically does not require any collateral upfront, meaning the lender doesn’t have any guarantee, and so often charges a higher interest rate than an auto loan or a mortgage. Check out the tips below about how to get a personal loan to maximize the chances you’ll be approved.

1. Decide on a Loan Type

There are different kinds of personal loans, from the secured to the unsecured. A secured loan uses an asset like your home or car as collateral, meaning the creditor has some sort of guarantee should you default on the loan. An unsecured loan does not require collateral and is a higher risk for the lender. This usually means it usually comes with a slightly higher interest rate.

2. Know Your Limitations

Your credit score and history play a huge role in the approval process. Before you apply for your loan, it’s a good idea to check your credit score and to do everything you can to improve it. (You can get two of your credit scores for free every month on Generally, and it depends on the credit scoring model used, a score of 760 or more is considered excellent, 700 good, and 640 fair. You can request a free annual credit report from each of the major credit reporting agencies so you can review for accuracy and correct any errors that may be dragging down your score. It’s also a good idea to keep in mind your own limitations regardless of what size loan a lender will approve you for — after all, you will be the one who has to make the payments. If you’re approved for a loan of $10,000, but only need $6,000, you don’t need to take the bigger loan.

3. Find the Right Lender

Not all financial institutions are created equal. Shop around at several potential lenders. You may need to base your options off your credit score and who you are most likely to qualify with. It’s important to check the fine print, interest rate and terms of all of the loans you are considering. You can discuss the necessary materials, documents and timelines for the approval process as well.

4. Create a Checklist

Once you have done all your research and spoken with some lenders, create a checklist of all the documentation you need for the loan application. You may need to work with creditors, your employer and other financial resources to gather everything that you need, so it’s a good idea to give yourself some time. Incomplete applications can get your loan denied right away, so it is important to be sure you are putting your best efforts forward.

All loans come with risk, but if you find yourself in need of one, it’s important to make sure you get approved with the best rates and terms available. Then, it’s up to you to make sure you pay them off on time.

This article originally appeared on and was written by AJ Smith.