The loans you can get depend on your income, credit history, debt load, and what you're borrowing for
There is no single answer to what loan you can get because lenders look at different things. A bank offering a mortgage cares most about your down payment and home value. A credit union offering a personal loan weighs your credit score and income differently than a payday lender does. Some loans require collateral (a car, house, or savings account); others don't. The type of loan you pursue should match both what you can realistically get and what you actually need the money for.
This guide walks through the main loan types, what lenders typically look for, and how to figure out which ones are worth exploring for your situation.
Key Takeaways
- Secured loans (backed by collateral like a car or house) are easier to get than unsecured loans because the lender can seize the collateral if you don't pay.
- Your credit score, income, and existing debt are the three things lenders check first, and they matter differently depending on the loan type.
- Personal loans, auto loans, mortgages, and credit cards are the most common options, each with different speed, cost, and requirements.
- If traditional lenders turn you down, credit unions, peer-to-peer lending, and secured loans against savings are real alternatives, though they often cost more.
How lenders decide what to offer you
Lenders use three main signals to decide whether to lend to you and at what interest rate. Credit score is the fastest filter: it's a number between 300 and 850 that reflects your history of paying bills on time. Most banks won't offer a standard personal loan to someone below 620; credit unions and online lenders sometimes go lower. Income matters because lenders need to know you can afford the monthly payment. They usually want your income to be at least 2 to 3 times the annual loan payment, though this varies. Debt-to-income ratio is what you already owe divided by what you earn—if you're already paying $2,000 a month toward other debts and earn $5,000 monthly, that's a 40 percent ratio, which makes new borrowing harder.
Beyond these three, lenders also look at employment history (stable work for at least two years is standard), whether you have collateral to offer, and what you're borrowing for. A mortgage lender will ask about the property itself. An auto lender will inspect the car. A personal loan lender usually doesn't care what you spend it on.
Secured loans: easier to get, but you risk losing what you pledge
A secured loan is backed by something you own—your house, car, or savings account. If you stop paying, the lender can take that thing. Because the lender has a safety net, they're willing to lend to people with lower credit scores or higher debt. Interest rates are also lower because the risk is lower.
The most common secured loans are mortgages (backed by the house itself), auto loans (backed by the car), and home equity loans or lines of credit (backed by the equity you've built in your house). You can also get a secured personal loan by pledging a savings account or certificate of deposit—the lender holds it as collateral while you borrow against it. This route works if you have savings but a weak credit history, though you're essentially borrowing your own money at a cost.
The trade-off is clear: easier to get, but you could lose your home or car if you can't pay. Only use a secured loan if you're confident you can make the payments.
Unsecured loans: harder to get, but nothing is at risk
Unsecured loans have no collateral backing them. Personal loans, credit cards, and student loans are unsecured. Because the lender has no safety net, they charge higher interest rates and are pickier about who they lend to. You'll typically need a credit score of 620 or higher for a bank, though credit unions and online lenders sometimes work with lower scores.
Personal loans from banks usually range from $1,000 to $50,000, with terms of two to seven years. Online lenders and credit unions often have lower credit score requirements but higher interest rates. Credit cards are unsecured too, but they work differently—you borrow as you spend, up to a limit, and pay interest only on what you carry month to month.
The advantage is that you don't risk losing an asset. The disadvantage is that if you default, the lender can sue you, report you to credit bureaus, and pursue wage garnishment or bank levies.
Comparing the main loan types and what they require
| Loan Type | Typical Credit Score Needed | Secured or Unsecured | Typical Interest Rate Range | Time to Get Money |
|---|---|---|---|---|
| Mortgage | 620+ | Secured (house) | 5–8% | 30–45 days |
| Auto Loan | 600+ | Secured (car) | 4–10% | 1–7 days |
| Personal Loan (Bank) | 620+ | Unsecured | 8–36% | 3–7 days |
| Personal Loan (Online) | 580+ | Unsecured | 15–36% | 1–3 days |
| Credit Card | 600+ | Unsecured | 18–29% | Instant to 2 weeks |
| Credit Union Loan | 550+ | Secured or Unsecured | 6–18% | 3–10 days |
These ranges vary by lender, location, and market conditions. The rates shown are typical but not may provide. Always ask a lender for their specific rates before committing.
What to do if you have a low credit score
A credit score below 620 doesn't lock you out of borrowing, but it narrows your options and raises your cost. Credit unions are often more flexible than banks—many will lend to members with scores in the 550–600 range, especially if you've been a member for a while. Online lenders also work with lower scores, though interest rates can reach 30–36 percent or higher. Secured loans are your most realistic path: a car loan (the car itself is collateral), a home equity loan (if you own a home), or a secured personal loan against a savings account.
Before borrowing, consider whether you can improve your score first. Paying down existing debt and fixing errors on your credit report can take weeks to months but will lower your borrowing cost significantly. If you need money right away, a secured loan or credit union loan is more practical than waiting.
Alternatives if traditional lenders say no
If banks and credit unions turn you down, you have other routes. Peer-to-peer lending platforms (like LendingClub or Prosper) connect borrowers to individual investors and sometimes work with lower credit scores, though rates are high. Credit-builder loans from credit unions or online lenders let you borrow a small amount (usually $500–$1,500) that's held in a savings account as collateral; you make payments to build credit history. Payday loans are fast and require almost no credit check, but they charge extremely high fees and interest—often 400 percent annualized—and are meant only for emergencies you can repay in two weeks.
Family loans are also an option if someone is willing to lend to you. Put the terms in writing (amount, interest rate if any, payment schedule) to protect both of you and to avoid misunderstandings that damage relationships.
How to figure out what you actually need to borrow
Before you approach any lender, be clear about how much you need and what you're borrowing for. Borrowing more than necessary costs you in interest; borrowing the wrong type of loan (like a short-term payday loan for a long-term expense) can trap you in a cycle of rolling over debt. If you need $5,000 for a car repair, a personal loan or credit card might work. If you need $200,000 for a house, a mortgage is the only realistic option. If you need $500 to cover a gap until payday, a credit-builder loan or a small personal loan is better than a payday loan.
Write down the amount, the purpose, and how long you expect to take to repay it. Then match that to the loan types that fit. A mortgage takes 30 years; a personal loan takes 2–7 years; a credit card balance can stretch indefinitely but costs more the longer you carry it.
Frequently Asked Questions
Does checking what loans I might get hurt my credit score?
Checking your own credit report does not hurt your score. When a lender checks your credit (called a hard inquiry), it can lower your score by a few points for a few months. Multiple hard inquiries in a short time (within 14–45 days, depending on the type of loan) usually count as one inquiry, so shopping around for the best rate is safe.
Can I get a loan if I'm self-employed or have irregular income?
Yes, but lenders will ask for more documentation. Most want to see two years of tax returns or profit-and-loss statements to verify your income is stable. Some online lenders and credit unions are more flexible. Secured loans are easier to get because collateral matters more than income stability.
What's the difference between prequalification and preapproval?
Prequalification is an estimate based on information you provide; it doesn't require a hard credit check and doesn't mean the lender will actually lend to you. Preapproval involves a real credit check and a lender's commitment to lend you up to a certain amount if you meet stated conditions. Preapproval carries more weight when you're shopping.
Should I borrow from a payday lender if I'm desperate?
Payday loans charge fees equivalent to 400 percent annual interest or higher and are designed to be rolled over, trapping borrowers in debt cycles. They should be a last resort only. A credit-builder loan, a small personal loan from a credit union, or borrowing from family are all better options if you can access them.
How much can I borrow?
It depends on the loan type and lender. Personal loans typically range from $1,000 to $50,000. Auto loans depend on the car's value. Mortgages depend on the home price and your down payment. Credit cards have limits set by the issuer. Lenders will offer you an amount based on your income and debt, not on what you want to borrow.