What do you need to get a personal loan?

Before a lender can finalize your application, they may request that you provide personal documentation. Your lender will need to see important pieces of financial and personal information that determine if you prequalify for a loan.

 So which documents do you need to apply for a personal loan?

 Here’s what we’ll cover:

• What do you need to get a personal loan?
• Requirements for a personal loan
• What if you don’t meet the application requirements for a personal loan?

What do you need to get a personal loan?

Document requirements vary slightly with each personal loan lender. But most lenders ask for the same types of information unless they can obtain it in other ways. This information helps them assess whether you can afford to make payments on your personal loan.

For example, a lender must verify your personal information so they will want documents that prove your identity, address, income, and credit score. on that below.

Requirements for a personal loan

Before applying for a personal loan, it helps to have all the necessary documentation on hand. If you need a personal loan for an urgent expense, you probably want your money as soon as possible.

One way to speed up the process is to gather your documents before you apply. When you have these documents ready, the application process will be faster.

If you’re completing your application online, you can scan each document ahead of time. This way, you can attach digital files in a secured location with ease.

So which documents do you need?

Although each lender asks for slightly different documents and may be able to verify this information in other ways, it’s safe to assume you’ll need the following for your application:

1. Proof of your identity

First and foremost, you have to prove to lenders that you are who you say you are. Unfortunately, loan application fraud is more common than you think, which is why lenders need to verify your identity.

Your proof of identity can also show that you meet the basic requirements for personal loan eligibility, such as:

• Being a United States citizen, a permanent resident, or a long-term U.S. visa holder (depending on lender requirements)
• Being 18 years or older

Valid forms of ID

To prove that you meet these criteria, make sure you have at least one form of valid ID from this list:

• Driver’s license
• Passport
• State ID
• Military ID
• Government-issued photo ID
• Social Security number (SSN)
• Individual taxpayer identification number (ITIN)

2. Proof of address

After verifying your identity, lenders want to verify where you live. From time to time, lenders will also need to send you information, such as bills and payment notices. If they don’t know where you live, they won’t feel comfortable lending you money. Plus, this is how lenders customize your personal loan to meet your state’s laws, if applicable.  

You can use any of these documents to verify your home address:

• Utility bill
• Lease or rental agreement
• Voter registration card
• Proof of insurance for your home, rental, or car

3. Proof of income

Next, lenders need to verify your annual income. Lenders are more likely to approve borrowers who earn a steady income. This reassures them that you’ll be able to make your monthly personal loan payments on time. Many lenders have a minimum income requirement. If you fall below it, you won’t qualify for a personal loan with that lender.

Here’s how to prove your income:

Employed by someone else

If you’re an employee, you can show your personal loan lender any of these documents: 

• Pay stubs
• W-2 tax forms
• Bank statements with your income deposits
• Income tax returns

Lenders might ask for your employer’s name and contact information. And they might call your employer to verify that your employment and income information is correct. You should tell your employer to expect this call. But don’t worry. They won’t share any information about your loan application. This is a standard practice by lenders, and as long as the information you provide is accurate, there shouldn’t be any problems.

Self-employed

If you own your own business, these documents can provide proof of income: 

• 1099 tax forms
• Income tax returns
• Bank statements with your income deposits

Don’t forget to include documentation of any extra income you earn on the side—it could be enough to bring your income up to the required minimum amount.

4. Recurring monthly expenses

Even if you earn a steady monthly income, lenders want to feel confident that you can afford your loan payments. So they’ll often ask to see your current expenses, including things like:

• Mortgage or rent
• Utilities
• Car loan payments
• Insurance payments
• Student loan payments
• Credit card payments

Lenders subtract these recurring expenses from your monthly income to determine how much money you have leftover in your budget to make a personal loan payment.

5. Your credit score

Lenders also review your credit score during a personal loan application. Your credit score is a three-digit number between 300 and 850 that gives lenders an idea of how likely you are to make payments on time. While they can (and will) access this information on their own, it’s a good idea to review your credit report before you apply. This way, you can make sure there aren’t any errors.  

At AnnualCreditReport.com, you can check your credit score with each of the national credit bureaus every 12 months for free.  can also go directly to the website of any of the three credit bureaus to request your report:  

• Experian
• Equifax
• TransUnion

Can I get a personal loan with no credit history?

If you don’t have any credit history, you may still qualify for a personal loan. You just need to find a lender who is willing to accept your application. Instead of using your credit history to assess your creditworthiness, the lender may ask for documentation of your payment history or bank account activity.

6. Your purpose for the personal loan

Finally, be prepared to explain what you plan to use the loan for. Personal loans can be used for many things, including: 

• Unexpected expenses
• Home repairs and improvements
• Medical bills
• Debts owed to family members or friends
• A wedding or vacation
• Car repairs
• Large purchases
• Debt consolidation

Although you can use a personal loan to pay for many things, you can’t use it to pay for anything. For example, a personal loan can’t be used for student loans or business expenses.

You may need to tell your lender how much money you want to borrow. Make sure you know the exact number—you don’t want to pay any interest on money you don’t need.

Lenders have the final decision about the amount of your loan. When you ask for the right amount for the right reason, and you’re in a good financial situation to repay the loan, you’re likely to be approved.

What if you don’t meet the application requirements for a personal loan?

If you don’t get approved for your personal loan, you still have a few options:

1. Apply with a cosigner. A cosigner is usually a family member or a close friend who adds their name to your personal loan application. Your cosigner should have a high credit score. If you fail to make your regular payments on time, your lender will require your cosigner to make the payments instead. If your cosigner has good credit, your lender can trust that they’ll pay on time if you don’t. Your cosigner will typically need to provide the same documents that you do during the application process.

2. Apply for a secured personal loan. You could improve your chances next time by applying for a secured loan. Most personal loans are unsecured, which means they don’t require collateral (such as your house, car, or anything else of value that you own). Secured personal loans use collateral to ensure the lender will get their money back. Your lender can take this collateral if you fail to make your payments. Be prepared to provide documentation showing the value of your collateral and proof that you own it.

Oportun: Affordable lending options designed with you in mind

Now that you understand what you need to get a personal loan, you can learn about how Oportun may be able to help you if you’re looking for affordable credit options.  Visit our homepage to learn about:

• Personal loans
• Secured personal loans
• Credit cards
• And more!

 

Sources:

Consumer Financial Protection Bureau. § 1022.123 appropriate proof of identity.

Consumer Financial Protection Bureau. Understanding your credit.

Bankrate. What documentation is required for personal loans?