Looking to borrow a personal loan? Personal loans can be extremely useful when you are in sudden need of cash. If you’ve never applied for a personal loan before, here are a few things you should know.

How Much Do You Need?

The first thing you need to do is determine exactly how much money you need. Most lenders offer a minimum loan amount of $1,000 to $2,000. If you need less than $500, it’s easier to save up extra cash in advance or borrow the money from a friend or family member if you’re in a pinch.

Do You Want to Pay Your Creditors Directly or Have the Money Deposited Into Your Bank Account?

When you take out a loan, the cash is usually credited directly to your checking account. If you’re using the loan amount to consolidate your debts, a few lenders give you the option to send the funds directly to your other creditors and skip your bank account altogether.

How Long Will You Have to Pay It Back?

You’ll need to begin paying the lender back in monthly installments within the first 30 days. Most lenders do provide repayment terms between six months and seven years. Both your interest rate as well as your monthly payment will be impacted by the length of the loan term you choose.

How Much Will You Pay in Interest?

The interest rate depends on many factors, including your credit score, your loan amount, and your term. The interest rates can be as low as 3.49% and as high as 29.99% or even more. You’ll usually get the lowest interest rate if you have a good or excellent credit score and choose the shortest repayment term possible.

Can You Afford the Monthly Payment?

When applying for a personal loan, you have the chance to choose which repayment plan works best for your income levels and your cash flow. Some lenders will often provide an incentive for using autopay, hence lowering your APR by 0.25% or 0.50%.

Many people prefer to keep their monthly payments as low as possible, so they can pay back their loan over several months or years while others prefer to pay their loan off as quickly as they can and so they choose the highest monthly payment they can.