Sara Routhier, Managing Editor of Features and Outreach, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming worl...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Feb 25, 2021

Advertiser Disclosure

Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.

Summary

  • Many people’s first loan is an auto loan, student loan, or even a credit card
  • You likely have never had to go into a bank and apply for a personal loan before now
  • You will need to have a certain amount of personal information to show the lender in order to secure a personal loan
  • Almost every part of your financial life will be used to assess your risk level when writing a personal loan

Are you wondering how to get your first loan? Maybe you have had a credit card or a student loan in the past, but now you want to apply for a personal loan.

Getting your first loan may seem like a daunting task, but it really isn’t that hard. You just need to keep the following things in mind:

  • Your credit score and history will be used to assess your risk.
  • Your potential lender may contact your employer and even past employers.
  • Lenders don’t want to take too much risk, so they will thoroughly vet you before giving you a loan.

If you’re new to loans and want to get a loan for any number of personal reasons, keep reading to see the information you will need to know how to get your first loan.

If you’re ready to apply for your first loan today, enter your ZIP code above to compare rates for your first loan.

What should I do to get my first loan?

There are a number of things you will want to do, but the first thing you should do, and the most important, is to check your credit score and spruce it up as best you can.

You can do this by paying down any debts you currently have, whether they be credit cards, car loans, or student loans. Paying down your debt and paying your debt on time will help increase your credit score.

Lenders like to see high credit scores. This means you pose less of a financial risk, and they will likely be able to get their money back from you.

The better your credit score is, the better interest rates you will qualify for. If your credit score is too low, you may not even be able to get a loan from most lenders.

Apply for a Loan

Enter your ZIP code below to view lenders with cheap loan rates.

 Secured with SHA-256 Encryption

Where should I go to get my first loan?

Applying at a bank is the way most people get their first loan, but you do not need to use a bank to get your first loan.

There are other lenders out there, including credit unions and private lenders, that may be able to offer you better interest rates and loan terms.

What you need to do after you check to make sure that your credit score is in order is to research lenders in your area.

You should see what each lender specializes in, how low they can go in terms of interest rates, and how likely they are to approve your loan application.

Doing preliminary research into the lenders in your area is the next most important step on your journey to get your first loan.

Will my employment affect my first loan?

Your current employment status will likely always be a factor in getting a loan, whether it is your first or your hundredth.

Lenders need to be able to verify how much money you make in any given month in order to assess your ability to pay back the loan you are asking for.

Your lender will likely contact your current employer to discuss your employment status and how long you have been with the company. They may even contact your former employers to make sure that the employment history and income that you are reporting is accurate.

Will my monthly debt payments affect my ability to get a loan?

Lenders will want to know what your current debt obligations are. They will get some of this information from your credit report, but they will likely need additional information like how much your rent or mortgage is.

Your monthly obligations are a big part of a lender’s equation. For example, let’s say you make three thousand dollars a month, but your financial obligations total 2,500 dollars a month. There is not a lot of expendable income in this equation to make debt payments on a new loan.

You need to be able to show potential lenders that you will have the ability to pay back any loan that you take out.

Be prepared to discuss and prove your monthly financial obligations with your potential lender in order to secure your first loan.

Apply for a Loan

Enter your ZIP code below to view lenders with cheap loan rates.

 Secured with SHA-256 Encryption

Will lenders consider my assets?

Lenders will consider your assets and liabilities as well when making a determination on your loan status. Your assets minus your liabilities equals your net worth, and this is a huge factor in determining your worthiness for a loan.

Assets include things that you own like properties, investment accounts, etc., while liabilities include student debt, mortgages, etc.

Lenders will look carefully at your net worth and make a final determination on your loan status from there.

Can I get a personal loan if I don’t have a credit score?

Most lenders will be hesitant to loan you money if you have no credit history or score. However, this doesn’t mean that you can’t get a loan. You will likely have higher interest rates as a result of your non-existent credit score.

If you’re interested in exploring this topic in more detail, Experian has a valuable resource for you to read through.

How to Get Your First Loan: The Bottom Line

You will need to be prepared with your personal, credit, and employment information. You can likely get better interest rates by shopping around and choosing a lender that caters to personal loans.

Doing your research and preparing for your loan application are the most important aspects of your first loan.

If you’re ready to get your first loan, enter your ZIP code below to compare interest rates on your first loan.