![]() ![]() Acceptable forms of government-issued identification often include:Ī lender wants to see that you have the ability to pay back your current debts as well as the new loan. This precaution also reduces the threat of identity theft. ![]() Most lenders require applicants to provide at least two forms of government-issued identification to prove they are at least 18 years old and a United States citizen. There are also a number of brick and mortar banks and financial institutions that require applicants to submit a paper application in-person. While there are numerous online lenders that offer a completely online application experience, others may need to discuss your application over the phone before providing a decision. The format of a loan application may also vary by lender. In general, though, you’ll need to provide basic personal information, how much you want to borrow and the purpose of the loan. Each lender has its own application, so the specific requirements may vary. Loan ApplicationĪ loan application is a formal document that lenders require prospective borrowers to complete and submit to begin the lending process. Here are the most common documents lenders require as part of the personal loan application process. When it’s time to formally apply for a personal loan, your lender will request a number of documents to confirm everything from your identity to your residence and employment. 4 Personal Loan Documents Your Lender May Require Some lenders collect origination fees as cash at closing, while others finance them as part of the loan amount or subtract them from the total loan amount disbursed at closing. These fees usually range between 1% and 8% of the total loan amount, depending on factors like the applicant’s credit score and loan amount. Though not part of the qualification process, many lenders require borrowers to pay personal loan origination fees to cover the costs of processing applications, running credit checks and closing. If you fall behind on your payments or default on your loan, the lender can repossess the collateral to recoup the remaining loan balance. However, secured personal loans can also be collateralized by other valuable assets, including cash accounts, investment accounts, real estate and collectibles like coins or precious metals. In the case of loans for homes or vehicles, the collateral is typically related to the underlying purpose of the loan. If you’re applying for a secured personal loan, your lender will require you to pledge valuable assets-or collateral. For that reason, a DTI less than 36% is ideal, though some lenders will approve a highly qualified applicant with a ratio up to 50%. Lenders use DTI to predict a prospective borrower’s ability to make payments on new and current debt. Debt-to-income Ratioĭebt-to-income ratio (DTI) is expressed as a percentage and represents the portion of a borrower’s gross monthly income that goes toward her monthly debt service. Many don’t.Įvidence of income may include recent tax returns, monthly bank statements, pay stubs and signed letters from employers self-employed applicants can provide tax returns or bank deposits. Don’t be surprised, however, if your lender doesn’t disclose minimum income requirements. For example, SoFi imposes a minimum salary requirement of $45,000 per year Avant’s annual income minimum requirement is just $20,000. ![]() Minimum income requirements vary by lender. Lenders impose income requirements on borrowers to ensure they have the means to repay a new loan. Many lenders require applicants to have a minimum score of around 600 to qualify, but some lenders will lend to applicants without any credit history at all. Credit scores range from 300 to 850 and are based on factors like payment history, amount of outstanding debt and length of credit history. An applicant’s credit score is one of the most important factors a lender considers when evaluating a loan application. ![]()
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