A personal loan can be a lifesaver, whether you are using it to pay for something necessary like an auto repair or simply to help consolidate your debt. Before applying for the loan, though, you need to do three very important things. These three things can help save you money over the life of the loan as well as improve your chances of getting a personal loan with a good interest rate.

#1: Check your own credit

Most lenders will base both the amount of the loan and the interest rate on your credit report, so it is a good idea to know where you stand before you apply. You are allowed two copies of your credit report for free annually by federal law, so take advantage of this to pull your report and look it over. Make sure everything on the report is accurate. If there are any debts you don't recognize or inaccurate payment information on the report, then make sure you contest these with the reporting agencies and have them removed before applying for your loan. This process can take at least 30 days, so it needs to be the first thing you do when you decide to look into loan products.

#2: Change any bad habits

Depending on the reason for needing the loan, there may be some habits you need to modify. Otherwise, the loan won't be a solution but will simply put off the inevitable bankruptcy. If the loan is to consolidate debt, for example, then it's time to sit down and get to the bottom of the habits that are causing you to get into debt. If it's boredom spending, then find a low-cost hobby to take its place. If it's spending due to lack of time, such as at restaurants, look into inexpensive quick and ready-made meal options. If your income is too low, then cut some luxuries from your budget or look for a better paying job or a second job for extra income.

#3: Create a plan

Now it's time to apply for that loan. Only take out the bare minimum you need for the purpose, such as the exact amount of the repair or the specific amount you need to consolidate. Extra money is nothing more than a temptation to spend foolishly and pay more interest. Once you apply, create your payback plan. This way you can work with your lender to create a realistic payment amount for your budget. Many lenders will even allow you to pick the day of the month that the payment is due. You want the amount to be enough to pay the loan off quickly, but not so much that it is a burden to come up with the payment amount each month.

For more help, talk to a lender in your area.