To obtain a personal loan you need to apply to a bank or other financier. Your application may be impromptu, or may be in response to an invitation from the bank, i.e. in response to their 'junk mail' offers. Either way, you must make the application on the bank application form.

You will be asked to supply details about your current salary, commitments and liabilities on the application form, as well as the reason you need the loan.

When we borrow, we always have a reason. That reason is important to you and its important to the bank.
- The Banks Opinion. The reason you want a loan is not very important to the bank when deciding whether or not to give you a loan. However, if your application is successful, they will take the reason into consideration when determining the maximum term of the loan. Generally speaking, they tend to allow terms of 3-5 years for cars as this equates to the life (for one user) for this type of item. On the other hand, they tend to allow up to 10 year terms for personal loans for home improvements.
- Your Own Opinion. You need to be happy that you are borrowing for a good reason. If you are not sure, you should read the Borrowing page where there is a fuller discussion on this point.

Finally, the bank will seek an credit reference from a credit reference agency (CRA). This reference will be supplimented with data in the banks internal files for existiong customers.

The bank will then consider and either accept or reject your application, based on this information. When considering an application for a personal loan, the bank will make one of three decisions.
- Approve the application fully, i.e. they give you the loan you requested, repayable over the period you requested
- Conditional approval of the application, i.e. offer the loan with a lower advance, shorter term or higher interest rate than you requested. You may or may not accept the revised offer
- Reject the application. If they do this, they will give you some basic reason if you ask. If the reason has anything to do with your credit rating, you should read the credit rating page for further information.