shopping for a personal loan, made easier

5 tips for new and experienced borrowers

Start with the price tag.

This should be the first step when borrowing money. Think about it: Consumers can be experts at spotting good deals on cars, computers, and cruises. Yet when it comes to finding a personal loan to pay for some of these things, a lot of people aren’t sure where to start.

We suggest starting simply, by figuring out what you can afford to pay back monthly. Because what you actually owe will be more than what you borrow, due to interest and possible fees. And those costs can vary from person to person, depending on credit scores, debt, and income.

If that sounds daunting, don’t worry. There are easy tools to figure it out.

A personal loan shopping list

The color of money doesn’t change, but the terms of loan agreements do. Here’s a five-step guide on how to shop for a personal loan that pays off.

1. Know your credit score.

The higher a credit score, the better the chances of qualifying for a loan and securing it at a lower interest rate. Credit scores range from 300 (poor) to 850 (exceptional), with a score of 670 to 739 considered good.¹ If you’re not sure of your credit score, or it’s been more than a year since you’ve checked it, it’s probably time to look it up.

Payoff: Consumers should make a practice of checking their credit scores once a year. You can take a credit score tutorial, and link to a free credit score rating, here. If your score is lower than you think it should be, look for common errors, such as incorrect credit limits.²

2. Determine if you'll need backup.

Depending on your creditworthiness, you might need a co-borrower in order to qualify for a traditional unsecured loan. If you do not know someone who can co-borrow, you can consider applying for a secured loan. But note: A secured loan requires pledging something you own to cover the debt – a car, house, or money in a savings account.

Payoff: If you believe you’ll fall short of loan qualifications, a reliable person or asset can ensure the bank that the loan will be repaid. If you are unable to get backup, you might consider waiting for the loan.^{3, 4}

3. Find the loan that fits.

Banks offer a variety of personal loans, so figure out which best suits your situation, whether it’s to consolidate debt, invest in home improvements, or pay for a wedding. Our personal loans range from basic fixed-rate products to secured lines of credit that max out at $3 million.

Payoff: Knowing what the loan pays for helps you establish the terms that make sense. You will find that certain loans may cost less than credit card debt, for example. If you’re interested in comparing personal loans, you can do so here.

4. Read the fine print.

The terms of a loan can add up. Be sure to ask for the details of all applied fees, including origination (processing) fees, which can come to hundreds of dollars.⁵ It also makes sense to ask about flexible loan options, such as changing the due dates and paying the loan off early.

A tip from the pros: be sure to ask about our relationship pricing. If you have a checking account or mortgage loan with us, you might be eligible for additional discounts.

Payoff: By knowing all of the lender’s expectations and loan options up front – including even when the first payment is due – you gain more control and avoid surprise expenses, ensuring you stay ahead on your loan.

5. Follow the Boy Scout Rule and be prepared.

Different lenders, and different loans, will probably require assorted documentation. Err on the side of caution by pulling together a file of all records that support your creditworthiness. These will include assets (including savings accounts), proof of residence, proof of income (such as W-2s), and driver’s license information.

Payoff: Your lender may request additional documentation during application. By making a practice of organizing and regularly updating financial documents, including debts and assets, the loan process will be faster.

And the last step – schedule those payments!

Educated loan-shopping starts with the price tag, and should end with extra money in your pocket. By taking the above steps, you’ll be well prepared to make your first loan payment; maybe even round it up to the next $100 mark. Doing so would reduce the balance, interest fees, and contribute to a high credit score – so any future loans would cost less.

You can compare the terms and qualifications of all our personal loans, and apply online, here.

1 “What is a Good Credit Score?” By Louis DeNicola, Experian.com; https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-is-a-good-credit-score/

2 “5 Tips for Boosting Your Chances of Personal Loan Approval,” By Steve Nicastro, NerdWallet, March 6, 2023; https://www.nerdwallet.com/article/loans/personal-loans/personal-loan-application-tips-win-approval

3 “How to get a personal loan in 8 steps,” By Jerry Brown, Bankrate.com, Jan. 27, 2023; https://www.bankrate.com/loans/personal-loans/how-to-get-personal-loan/

4 “Best Personal Loans of 2023,” By Annie Millerbernd, NerdWallet, Dec. 31, 2022; https://www.nerdwallet.com/best/loans/personal-loans/secured-personal-loans-lenders

5 “Loan origination fees,” By Dan Miller, Bankrate, Nov. 9, 2022; https://www.bankrate.com/loans/personal-loans/personal-loan-origination-fees/

The information on this page is accurate as of May 2023 and is subject to change. First Financial Bank is not affiliated with any third-parties or third-party websites mentioned above. Any reference to any person, organization, activity, product, and/or service does not constitute or imply an endorsement. By clicking on a third-party link, you acknowledge you are leaving bankatfirst.com. First Financial Bank is not responsible for the content or security of any linked web page. Member FDIC / Equal Housing Lender.