 TITLE: What Is a Personal Loan? CONTENT: How to Qualify for a Personal Loan\n----------------------------------\nPersonal loans are available for most consumers across the credit spectrum, but there are some things you can do to improve your chances of getting approved at a favorable rate. Here are some factors lenders consider when you apply:\n*   **Credit score**: Your credit score is a snapshot of your overall credit history, and the higher it is, the better your chances of getting approved with a low interest rate. That said, there are personal loans for bad credit, so you're not completely out of luck if you don't have time to improve your credit before you apply.\n*   **Income**: Your ability to repay the debt is another major factor, and lenders will specifically consider your debt-to-income ratio—that's how much of your gross monthly income goes toward debt payments. A low ratio means you're more likely to be able to afford your loan payments because there aren't too many competing debts.\n*   **Credit report**: While your credit score is important, lenders will also check your credit report to make sure there aren't any negative items from the past that could affect their decision. Specifically, things like delinquent payments, collection accounts, bankruptcy and foreclosure could act as a red flag and make it difficult to get approved.\nIf your credit and income situation isn't where you want it to be for a personal loan, work to improve it before you apply.\nStart by checking your credit report to pinpoint areas you need to address, and also work on paying down debt to reduce your debt-to-income ratio. This process can take time, but it can save you a significant amount of money if it can help you qualify for a lower interest rate. END