Did you know that the average debt after graduating from college is around $30,000?
Sometimes there’s no getting around the need to borrow money, especially in the event of an emergency. If you need quick cash, then going through a loan provider is often the best course of action. However, sometimes this is not as easy as it may sound.
Are you unsure of what to expect during the vetting process? Keep reading to learn all about the 7 personal loan requirements you may not know about.
To prevent fraud, a personal loan provider will most likely ask you for some proof of identity. For security purposes, a provider will often need at least two forms of official identification. If you show up with your driver’s license and nothing more, you could end up going home empty-handed.
Other than a driver’s license, you should bring along a birth certificate, a social security card, a passport, a military ID card, or another type of state-issued ID. Aside from confirming that you’re who you claim to be, this requirement can also ensure that you’re at least 18 years of age and are a United States citizen.
If you’re not a citizen, then you should at least be a permanent resident, or you can’t get a loan. Some people are wary of bringing their original identification items, so you’ll be glad to know that it’s often permissible to bring copies instead.
The gateway number when applying for a bank loan is your credit score. If it’s way too low, then your chances of getting a loan in any amount are slim, although there are options.
Since credit score numbers can range from 300 all the way up to 850, you can imagine that anywhere near that lower number is seen as a red flag by providers. While there is no universal number, most loan providers consider around 665 to be a good score. A score that’s higher than around 745 is considered very good.
With a score ranging from 780 to 850, you should have little to no trouble getting your loan. Of course, this depends on the purpose of the loan and the amount you wish to receive.
A great credit score is sometimes not enough on its own. A meticulous loan provider may also want to see the details of your credit history. From the number of credit lines you’ve opened to the number of loans you’ve taken out in the past, all this information is up for grabs.
If the loan provider sees that you struggled with the payments of a loan several years ago, that may give them some pause.
Another way a loan provider can have peace of mind about your ability to pay back the loan is by confirming your personal income amount. This also works as a way of confirming your employment.
When it comes to a traditional employee, it should be easy to show proof with paystubs, bank statements, tax returns, or tax forms like a 1099 or W-2. Worst case scenario, you should give the loan provider the contact information of your employer.
One way to get your paystubs is by logging into the online portal where you get paid by your employer. If you’re a freelancer, you won’t have typical paystubs. Instead, you should show the loan provider your bank statement, tax returns, or your 1099s.
Certain eligibility requirements state that you’ll need to put forth some form of collateral. Collateral involves a type of asset that you’d give the loan provider if you’re not able to pay off the loan when the time comes. After several missed loan payments, for instance, it would be in their right to seize the collateral.
From a gold watch to your car, collateral can take many forms. The key is that the collateral is worth a significant amount. It’s even possible to put forth multiple items, such as jewelry, appraised artwork, and even your entire home.
While this isn’t a standard question across the board, some lenders would like to know the purpose of the loan for their records. Depending on the loan provider, there may be some restrictions on how you can use the money.
For instance, a business owner may use it to buy inventory or equipment, fund projects, or even improve cash flow. If the reason is personal and not something you feel comfortable sharing, then your best bet is to work with an online lender or another type of alternative lender.
Yet another requirement involves your living situation. If you’re nomadic and go from place to place on a regular basis, then that could make it difficult for the loan provider to collect payments from you. This is why they’d like to confirm that your living situation is stable and doesn’t involve couch surfing.
This proof should come in the form of a recent utility bill, a copy of the lease you signed, or even a voter registration card. You can’t use something like junk mail because that isn’t considered official mail.
Now that you’ve learned about the 7 personal loan requirements that you may not have known before, you can make sure that you’re as prepared as possible. The last thing you’d want is to get hit with one or more roadblocks when trying to get the loan you need.
Fast Loan Direct is dedicated to making the process as easy and streamlined as we can. That way, you can get the amount you want by the time you want it.
Do you have one or more questions about our services? Don’t hesitate to contact us so we can talk things through.