This article originally appeared on GOBankingRates.com: Questions to Ask Before Taking Out a Personal Loan

Personal loans are a popular alternative to credit cards, because like credit cards they are paid in installments, but they’re easy to apply for and come with relatively low interest rates if you have a good credit score. From debt consolidation to paying for life events, personal loans give borrowers quick cash for whatever they need that they can pay back over time. In most cases, people repay the loan monthly, same as they would with a credit card, but with personal loans, payments are typically the same amount each month whereas credit card payments might vary depending on your balance.

Read on to find out where to get a personal loan, how much you can borrow, what you can use a personal loan for, what questions to ask before you sign and how it can help you reset your finances in 2019.

1. Is a personal loan right for me?

Over 19 million consumers have personal loans, according to TransUnion — and they’re popular for good reason.

Personal loans can be a way to consolidate high-interest credit card debt at a lower rate. A personal loan can be used for just about anything, and if you don’t have the cash on hand, a personal loan might be the ticket to a home improvement project, a wedding or other costly undertaking. Either way, personal loans give borrowers money up front that they pay back in predictable installments over a fixed period, typically at a rate that’s lower than credit cards can offer.

2. What are the different types of personal loans?

There is more than one kind of personal loan — unsecured, secured, fixed-rate, variable-rate and debt consolidation — and some should almost always be avoided. Payday loans are risky short-term, ultra-high-interest loans that can put desperate, high-risk borrowers in cycles of debt. Comparatively, personal loans typically offer lower interest rates than both credit cards and payday loans, which is why they’re often used to pay off credit cards. But personal loan rates can vary widely depending on the financial institution you’re borrowing from, how much you’re borrowing, the term of the loan, your income and, of course, your credit history and credit score.

3. How much can I borrow with a personal loan?

When you apply for a personal loan, the lender will evaluate your income, employment and overall stability to determine whether you can afford your payments. The lender will also consider your debt-to-income ratio.

Your DTI ratio is the percentage of debt you have in relation to the amount of gross income — income before taxes — you earn. To calculate your DTI ratio, add up all the debt payments you make each month and divide that sum by your gross monthly income. A DTI ratio of 43 percent or less is the most favorable, but you can still qualify for loans with a higher debt-to-income ratio. Lenders might require additional information to approve you, however.

Use This: Find Out Your DTI Ratio With This Debt-to-Income Ratio Calculator

4. How much should I borrow with a personal loan?

Even if your lender is able to approve you for a personal loan amount that’s much higher than what you were expecting, that doesn’t mean you should accept it. Not only is your debt-to-income ratio important, but you should also consider your discretionary spending or what you spend your money on other than necessities. Aim to borrow the amount you know you need to fund whatever it is you’re borrowing for — that way, you don’t take on more debt than you really need to.

You can use a personal loan calculator to determine what your monthly loan payment would be and whether or not it aligns with your monthly budget and spending patterns.

5. How do I get the best rate on a personal loan?

To get the best personal loan rates, you’ll need to shop around. Not all personal lenders will offer the same terms. Look for a lender with the lowest rates and fees. Opting for a loan with a shorter term will cost you less in interest than a loan with a longer term will.

Since your credit score plays a part in what loan rate you’ll get, do what you can to improve your credit score before you apply for a personal loan.

6. Do personal loans come with fees?

It all depends on the lender. Some lenders don’t charge any fees when granting personal loans, whereas other lenders might charge origination or other fees. Shop around for the best loan rate you can find to save money on the cost of the loan and also look for a lender that charges no or low fees. For example, PenFed Credit Union offers personal loans in amounts from $500 to $25,000 at rates as low as 6.49% APR with zero origination fees and no hidden costs. Other lenders charge higher rates and origination fees, which adds to the overall cost of your loan.

7. What credit score do I need to get a personal loan?

Your credit score just might be the three most important numbers in your financial life — never more so than when you’re applying for a loan. Your score represents your creditworthiness and the risk you pose to lenders. Tracked by America’s three credit reporting bureaus — TransUnion, Equifax and Experian — credit scores range from 300 to 850. The higher your credit score, the better your odds of getting a loan at a good rate.

Find Out: 15 Money Truths Your Successful Friends Won’t Tell You

8. How can I pay off my personal loan more quickly?

Making biweekly payments, extra payments or rounding up your payments are strategies that can help you pay off your personal loan more quickly. If you choose to make biweekly payments instead of 12 monthly payments, you’ll pay 26 half payments, resulting in one extra payment per year, which will reduce the life of your loan and save you money on interest. You can also make additional payments toward the loan when you have extra money available.

Rounding up your payments to the nearest hundred could also prove effective. For example, if your loan payment is $167, you could round it up to $200 and pay an extra $33 per payment, which would result in more than two extra payments per year if you keep it up every month.

Some lenders, however, might charge a prepayment penalty if you pay off your loan sooner than expected. Look for a lender that doesn’t charge prepayment penalties.

9. How can getting a personal loan help my credit?

Part of your credit score is based on credit utilization, and lenders like to see that you’re not utilizing more than 30 percent of your available credit. If you’re planning to use the personal loan to pay off credit card debt, you can effectively lower your credit utilization, which can boost your credit score.

Plus, because a personal loan is considered an installment loan, which is different than the revolving debt of credit cards, adding it to your credit profile can demonstrate that you can handle different types of debt successfully.

10. What's the personal loan application process like?

Most personal loans are unsecured, which means no collateral is required. In most cases, you can apply for personal loans online or over the phone and get results in just a few minutes, provided you have the necessary documentation. If you’re borrowing from a bank or a credit union, you might also have the option to complete the application in person.

11. What kind of documentation do I need to apply for a personal loan?

In addition to basic information, such as your address, date of birth and Social Security number, the lender will likely want to know about your income, including your tax return information and details about your employment history. If you want the funds to be deposited into your bank account, you’ll also need to provide your bank’s routing number and your account number.

12. Does applying for a personal loan hurt my credit?

When a potential lender checks your credit, it shows up on your credit report as a hard inquiry, which stays on your credit report for two years, according to Experian. But that doesn’t have to be a bad thing, depending on how you do it.

If you apply to different lenders, do it in rapid succession. When hard inquiries are condensed in a short period of time, it just looks like you’re shopping around and it won’t count against you. Try not to spread out applications over long periods of time and consider asking for pre-approval, which is considered a soft inquiry that doesn’t go on your report at all.

13. How do I know which personal loan is right for me?

Personal loans are big business, which means there’s a lot of competition. In fact, a quick Google search leads to an overwhelming number of options, many of which all claim to be some combination of the best, cheapest, most popular or most reliable. To avoid miscellaneous fees, avoid payday loan companies. Instead, opt for a reputable bank or credit union, like PenFed Credit Union, which offers a variety of personal loan terms with no hidden fees or origination costs.

Click to find out how much money you should have saved by age 30 — and what to do if you fall short.

Andrew Lisa contributed to the reporting for this article.