Learn How to Get a Personal Loan in 8 Steps

5. Shop around for the lowest personal loan interest rates.

Instead of accepting the first offer you receive, take your time and search around for the greatest potential interest rate. Compare several lenders and loan kinds to see what you qualify for.

Personal loan offers are often available through banks, credit unions, and online lenders. Consider checking with your bank or credit union first if you’ve had an account with them for a long time.

When you can demonstrate that you’ve made good financial decisions for years, your bank or credit union may be ready to overlook recent credit mistakes or give you a better rate. Some internet lenders will also let you become prequalified with a soft credit check, which will have no effect on your credit score.

Check with the lenders you’re thinking about to see if they have a prequalification process. Use this option to receive a complete picture of the rates available to you.

Hard credit inquiries are often conducted as part of the loan application process by lenders who do not offer a prequalification process. To minimize the impact of hard inquiries on your credit score, do your rate shopping within 45 days of each other to include them as a single query for credit-scoring purposes.

Takeaway: Don’t accept the first offer you get. To avoid a negative impact on your credit, compare many lenders and loan kinds and look for a prequalification option before applying.

Next steps: To find a loan with competitive rates, shop around and compare offers, rates, and fees. If this is a possibility, become prequalified.