How to Get a Loan from the Bank
On February 25, 2026 By newsroom Topic: Debt Advice
Applying for a bank loan doesn’t have to be overwhelming! Follow these five steps to secure a loan that works best for you.
1. Check Whether You Qualify
- Customer Requirements: Some banks may only lend to existing customers or those with preapproval.
- Credit Score: Good to excellent credit (690+) is typically required, though some banks accept scores as low as 630.
- Debt-to-Income (DTI) Ratio: Aim for a DTI under 36%, showing you can handle additional debt.
- Prequalification: Many banks allow you to prequalify without affecting your credit score. This shows your potential loan terms.
2. Compare Rates
- APR (Annual Percentage Rate): Compare APRs (interest + fees) to find the most affordable option.
- Example: A $20,000 loan at 12% APR saves $2,920 in interest compared to 18% APR over four years.
- Repayment Terms: Longer terms reduce monthly payments but increase overall interest costs.
- Explore Online Lenders: Many allow prequalification, providing additional options for comparison.
Tip: Use a loan calculator to estimate monthly payments and total costs.
3. Submit Your Application
- How to Apply:
- Online: Convenient for most banks.
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In-Branch: Required for new customers at some banks.
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Information Needed:
- Personal Info: Name, address, Social Security number, etc.
- Loan Details: Desired amount, purpose, repayment term.
- Proof of Income: Employment details, pay stubs.
- Debt Information: Any existing loans or credit card balances.
Note: The bank will perform a hard credit check, which temporarily lowers your credit score.
4. Review the Loan Agreement
- Verify Key Details: Confirm loan amount, APR, repayment term, and monthly payment.
- Check for Fees: Look for late payment fees or other charges.
- Sign the Agreement: Many banks offer electronic signing; some require an in-person visit.
5. Receive Your Funds
- Funding Timeline: Banks typically disburse funds within a week, some as fast as the same or next day.
- Deposit Options:
- Direct deposit to your account.
- Paper check mailed to you.
Post-Loan Tips
- Set Up Auto-Pay: Automate payments to avoid late fees and potentially qualify for a discount.
- Budget for Payments: Create a repayment plan to stay on track and reduce financial stress.
With proper preparation, you’ll navigate the loan application process confidently and find the best loan for your needs!
