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Personal Loans Online


Kacie Goff

Kacie Goff is a personal finance and insurance writer with over five years of experience covering personal and commercial coverage options. She's also dedicated to besting her brother, a financial advisor, with insider insight into the personal finance industry and spends hours researching the latest rates and regulations.

There are specific types of loans for specific things. You get an auto loan to buy a car or a mortgage to buy a house, for example. But what about when you need money for something else?

If you want a loan for other purposes like buying furniture, paying medical bills, covering moving expenses, or renovating your house, you’ll need to get a personal loan. Fortunately, you might even be able to get a personal loan online.

What is a Personal Loan?

A personal loan is a type of financing. That means someone — in this case, usually a bank, online lender, or credit union — gives you a lump sum of money. The agreement is that you’ll pay that amount back, plus interest, in incremental payments over time.

Generally, you can use the money you get from a personal loan for any purpose. This type of loan gives you more flexibility than, say, an auto loan, which you can only use toward the purchase of a vehicle.

How Does a Personal Loan Work?

To get a personal loan, you apply with a lender. That usually means giving them some personal information, including details on how much money you have in your accounts and your income.

Assuming the lender decides you’re safe to lend to based on your info, they approve you for a personal loan and they give you the loan money in a lump sum. Then, per the agreement you made with them, you start the process of slowly paying that money back, plus interest. Usually, this means making monthly payments for a set amount of time (the loan term).

What Should I Know About Interest Rates?

You probably noticed that we mentioned you’re paying this loan back plus interest. Interest is basically the fee you pay to the lender in exchange for the money they loaned you.

The higher your interest rate, the more your loan will cost you over its life. Before you get a personal loan, always compare interest rates to make sure you’re getting the lowest rate possible.

Also, check the interest rate type. If it’s a fixed rate, you’ll know how much interest you’re going to pay over time. If it’s a variable rate, your lender can adjust the rate slightly based on current market rates. This could mean the loan ends up being more expensive or cheaper than a fixed-rate loan, depending on how the market performs and how your lender adjusts your rate over time.

Types of Personal Loans

There are a couple of types of personal loans: unsecured and secured.

Secured Personal Loans

If your credit is lackluster, you might need to get a secured personal loan. This means putting something up as collateral for the loan, whether that’s your car or your savings.

Unsecured Personal Loans

Unsecured personal loans are much more common.

An unsecured loan means there’s no collateral protecting your lender. To understand secured vs. unsecured loans, let’s look at an example.

A mortgage is a secured loan. That’s because the house you use the mortgage to purchase acts as collateral. If you don’t make your mortgage payments and default on your loan, your lender can take the house to recoup the money they lent you.

With an unsecured personal loan, there’s no collateral to take if you don’t make payments. So a lender might turn to another way to protect themselves, whether that’s charging you a higher interest rate or performing a credit check to see if you have a history of making payments on time.

Personal Loan Purposes

In most cases, you can use a personal loan for whatever you want. That means you can use the money to:

  • Make an expensive purchase, like buying furniture or electronics
  • Pay off medical bills
  • Consolidate debt from multiple credit cards
  • Complete home repairs or renovations
  • Pay for a wedding
  • Pay for a vacation
  • Pay for funeral expenses or divorce costs
  • Cover moving costs

In other words, you can use a personal loan however you need. Just remember that you’ll have to pay the money back.

Pros and Cons of Getting a Personal Loan Online

Now that you know the basics of these loans and how you might use yours, you’re probably wondering how to get a personal loan. The good news? You can skip a lot of hassle and get a personal loan online in some cases.

Is this the right path for you? Let’s look at the pros and cons.



Obviously, getting a personal loan online is more convenient than having to visit a financial institution and apply in person. When you’re at home filling out the information you need, it’s easy to get up and grab the right documentation to ensure your loan application is accurate, too.

Easier Access

When you apply for a loan online, you can see your options and track your process digitally. A quick Google search can pull up a variety of lenders so you can easily see what they offer and review the details of their lending solutions.

Time Savings

Skip the hassle of visiting an office to apply for a personal loan. On top of those time savings, many online loans approve your application more quickly than traditional lenders.


Higher Rates Than Some Loans

For the increased speed and convenience of getting a loan online, you might need to pay slightly more. It’s important to compare the interest rates of online loans against traditional ones. Do the math and decide if the extra amount you’ll pay is worth it to you because of the added convenience.

Prepayment Penalties

Some loans come with penalties if you pay them off sooner than the agreed-upon term. If you think you might pay your loan off early, avoid lending solutions that come with a prepayment penalty.

Threat of Scams

If you’re going to apply for a loan online, it’s critical that you thoroughly vet your potential lender and double-check that their website is secure. Read reviews of the company and make sure you see an “https://” (not “http://”) in the URL, denoting that the website is able to properly safeguard any personal information you give them.

How to Get a Personal Loan

Now, let’s go through the steps to get your personal loan.

Choose Your Loan Type

First up, you need to decide how much money you want to get in your loan and how long you plan to have the loan payments (which is usually dictated by how much you can comfortably pay each month toward the loan). You also need to decide whether you want a variable or fixed interest rate and a secured or unsecured loan.

Check Your Personal Loan Rates

Once you know those details, you can start shopping for loans. You can call your bank or credit card companies to see if they offer personal loans.

But it’s also helpful to do an internet search. A quick search of “personal loan for [the amount you need]” can help you gather options so you can start comparing rates and terms.

Pick a Lender and Apply

Once you’ve found the loan type you need with the best possible interest rate and term, it’s time to apply for your loan. This process will vary depending on the lender you choose. As we’ve mentioned before, you might be able to get a personal loan online. In this case, you’ll usually start the process by filling out an online form.

Other loans will require you to visit the lender in person. You’ll need to have certain documentation, like proof of income, with you. Ask your lender what to bring to your appointment to make sure you’re properly prepared.

Provide Documentation

That documentation we just mentioned? It will come in handy now. Generally, to apply for a personal loan, you’ll need things like:

  • Personal identification
  • Proof of income
  • Employment information
  • Bank statements

Accept the Loan and Start Making Payments

Assuming your information all checks out and the lender offers you a loan, your next step is to accept the loan. You’ll get the money, but don’t forget that you also need to start making payments right away. Set up auto-pay, if you can, or set a recurring reminder in your calendar so you don’t miss a payment.

Tips for Applying for Personal Loans

Now, so you can get the best personal loan for your unique needs, we’ve lined out some of our top tips.

Make Sure a Personal Loan Offers You The Best Deal

Don’t forget that your interest rate and loan term will affect how much the loan costs you overall. To make sure you choose the loan option that will keep the most money in your pocket, use a loan calculator to determine how much you’ll pay in interest based on the rates you’re considering.

Be Careful with Credit Card Consolidation

If you’re thinking about a personal loan to pay off credit card debt or to consolidate debt from multiple credit cards, make sure you do your homework. If your personal loan will have a much lower interest rate than your credit card(s), it might be worth it. But do the math before you choose this path.

Read the Fine Print

Loans can come with unexpected, potentially costly details like origination fees or prepayment penalties. Take the time to read all of a loan’s details before you apply.

Fixed-rate or Variable Rate?

A variable rate loan might seem appealing now. But don’t forget that as the market changes, your rate can change right along with it. If you want to be 100% sure you can make your payments, choose a fixed-rate loan instead.

Personal Loans with No Credit Check

Armed with all of this information, you’re ready to apply for your personal loan. But you might have one thing standing in your way: your credit score.

Don’t worry. If you have a bad credit score or no credit, some lenders will still offer you loans. They’ll usually be shorter-term and for less money, but you can still get the financing you need in many cases.

Payday loans, for example, can give you a way to get a personal loan with no credit check.

Be savvy as you shop for a loan and you’ll get the right personal loan for your specific needs.