Financial difficulties are all too common in this storm-tossed economy and finding a way out can be an extreme burden. One of the only solutions is to apply for a personal bank loan — and even then you could run into some obstacles. Banks have requirements for individuals applying for bank loans and you need to know what they are before you apply.

There are two types of personal bank loans: unsecured and secured. Secured bank loans use collateral in order to help you receive lower fees, better repayment terms and a more beneficial interest rate. An unsecured loan is issued without collateral and at a much higher interest rate. The caliber of your financial situation will most likely determine which loan you will receive.

Know your credit score. If you don’t know your credit score, you can purchase it for about $16 from FICO or any of the other three major credit bureaus. You can estimate your FICO score for free using Bankrate’s FICO Score Estimator. You should also get a free copy of your credit report at If you see any discrepancies on your report, fix them before applying for any type of bank loans.

Shop around. It may seem like common sense, but you’d be surprised how many people settle for the first bank loan offered. Before you apply, shop around for the best possible interest rate and make sure you’re getting the best deal possible for your individual needs.

Know your repayment terms. Before accepting a bank loan, know if your monthly payment is fixed or variable; you want it to be fixed. Make sure you ask about upfront fees and whether the loan is disbursed all at once or in installments.

Offer collateral. No one likes high interest rates. Offering collateral could help you get a lower interest rate on your personal bank loan and in turn save you a great deal of money.

Repay your loan according to the terms of the agreement. If you don’t pay back your loan as outlined in your agreement with the bank, you could risk losing your good credit standing or the collateral you offered to get a secured bank loan.

Bottom line, when applying for personal bank loans, do your research, know your options and take the time to go through all the terms and conditions you and your lender have discussed before signing any official documents.