A loan is an creditos personales in which a lender gives you funds to use as long as you make interest payments and return the funds at the end of your lending agreement. Some people apply for loans to consolidate debt, pay for a deferred home improvement project or cover an emergency expense. Others simply want to borrow money at a lower rate than they might find on their own. Whatever your reasons, it’s important to understand how and where to apply for a loan to avoid unnecessary stress, wasted time and extra fees.

Financial Fitness: Preparing Your Finances Before Applying for a Loan

Review your credit score and verify all information on your credit report. Your creditworthiness plays an important role in determining your approval odds and loan terms. If your credit score is low, consider taking steps to improve it before you apply or try applying for a loan with a cosigner who can vouch for your financial health. Likewise, if your debt-to-income ratio is high, paying down existing debt can improve your chances of getting approved and help you qualify for a lower interest rate.

Once you decide on a lender, submit an online application or a phone call to request a loan. Most lenders have a streamlined application process that results in a quick decision. Some may ask for documents like government-issued ID, proof of income and bank statements to formally approve the loan. Then, depending on the lender’s policies, you might receive your funding by direct deposit or a check in the mail within a few business days of your application approval.