How to Improve Your Chances of Personal Loan Approval

A personal loan can be a powerful financial tool. You can use it to cover a home improvement project or medical bill. If you have high-interest credit card debt, a personal loan may also allow you to consolidate it and save a great deal of money on interest.

Regardless of why you’d like a personal loan, understand that you have to apply and go through the approval process. Unfortunately, there is no guarantee you’ll get approved for one once you do apply.

If you’d like to increase your chances of personal loan approval, however, there are a number of things you can do. Keep reading to find out what they are.

What Do Personal Loan Lenders Look For

Before we dive deeper into the steps you can take to boost your odds of getting approved for a personal loan, let’s discuss what most lenders look for. While each lender has its own set of requirements and some are more lenient than others, most consider the following factors:

  • Your credit score and history
  • Your employment status and income
  • Your credit card balances
  • Your debt utilization ratio (Amount of credit you’re using divided by the amount available to you)

What to Do to Improve Your Odds of Approval

Ideally, you’d have a stellar credit score, no history of missed payments or bankruptcies, a full-time job with a steady income, and a low debt utilization ratio. Since this may not be the case, you may want to take these steps to become a more attractive borrower in a lender’s eyes. By doing so, you’ll be far more likely to get approved for a personal loan.

Evaluate Your Credit


Before you apply for a personal loan, it’s a good idea to obtain copies of your credit reports from Equifax, Experian, and TransUnion, the three major credit bureaus. Go to as the site will allow you to pull your reports every 12 months for free.

Once you receive your reports, examine each one thoroughly to make sure there aren’t any inaccurate statements or errors. In the event you notice incorrect personal information, accounts that don’t belong to you, inaccurate payment history, or anything else that shouldn’t be there, dispute it.

Fortunately, the dispute process is fairly simple and can be done through each credit agency online, by phone or via mail. Disputing errors can improve your credit history and make you a stronger candidate for a personal loan.

Stay on Top of Your Finances

The better you manage your finances, the more likely you are to get approved for a personal loan. Here are some financial management tips that can do wonders for your credit.

  • Pay Your Bills on Time: Believe it or not, even one missed payment can lower your credit score. So it’s important to make timely payments on your credit cards, rent or mortgage, utilities, and other bills. Enroll in autopay or set up calendar reminders so that you never miss a payment.
  • Keep Your Credit Balances Low: Most experts suggest you keep your credit card balances to no more than 30% of the credit available to you. If you have a credit card with a $3,000 limit, for example, don’t allow your balance to exceed $1,000.
  • Only Apply for Credit When Necessary: It’s all too easy to apply for new credit any time you want to buy something. Since this can hurt your credit score, only apply for credit accounts when you absolutely need to.

Secure a Steady Job

When a lender extends a personal loan offer, they want to know that a borrower will be able to repay it. If you’re unemployed or don’t have a source of steady income, make an effort to land a job.

A steady job with a consistent paycheck can show the lender that you have the income you need to pay them back. In the event you’re unable to work for any reason, prove that you can repay a loan through retirement savings, government benefits, or another reliable income source.

Consider a Cosigner or Joint Applicant

If you don’t have the best credit, a cosigner or joint applicant may help you get approved for a personal loan. While the terms cosigner and joint applicant often get used interchangeably, there are some noteworthy differences between the two of them.

  • Cosigner: A cosigner will be responsible for your payments if you default on the loan.
  • Joint Applicant: A joint applicant will apply for the loan with you and share the responsibility of repaying it.

Your cosigner or joint applicant should be an individual you trust who understands the ins and outs of what their duties are. If you opt for a cosigner, make sure you’ll be able to make your loan payments on time because failure to do so may ruin your relationship with them.

Bottom Line

While these tips won’t guarantee you’ll get approved for a personal loan, they’ll certainly increase your chances. If you don’t get an offer from one lender, don’t panic. There are plenty of lenders out there and the chances of someone approving you is high. Just be sure to shop around and compare all of the options at your disposal.



© ViviaFi 2024. All Rights Reserved.

-ViviaFi is not a lender in all states. ViviaFi uses various credit reports, data sources, and application information as part of their underwriting. Not all applications are approved. Approval and loan terms vary based on applicant qualifications and by state. Decision may take longer if additional verification or documents are required.

†Applications approved before 1:30 p.m. CT Monday-Friday are generally funded same business day, subject to your bank's processing times. Applications approved other times are generally funded the next business day. Some applications may require additional verification. In such cases, if approved, funds will be disbursed by the following business day after the additional verifications are complete.