PERSONAL FINANCE BLOG

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personal loan documents
20 May 2019

The Full List of Documents Needed for a Personal Loan

According to a Federal Reserve report, 69% of adults feel they’re managing their finances just okay. But that doesn’t mean some of them won’t need to apply for a loan.

While their reasons for getting a loan vary from taking care of an emergency to buying a new vehicle, each person had to supply specific information to the lender first.

While which personal loan documents you need depend on the lender, but what they’re looking for is somewhat universal. It’s usually easier, less stressful, and a quicker process if you prepare your personal loan documentation before you apply for a loan.

We want to help. Keep reading to learn the list of the requirements for a personal loan.

Check Your Credit Score Before You Gather Your Personal Loan Documents

What do you need to get a loan? A decent credit score, for starters.

You’re entitled to check your credit score for free once a year. There are three credit score companies and you need to check all three of them as the information may differ.

Your FICO score is determined by the following information:

  • Payment history
  • Amount of debt
  • Length of credit history
  • Amount of new credit
  • Types of credit currently in use

Carefully check over all the information provided to ensure there are no errors. If you find errors, take immediate steps to correct them.

And if you carry a lot of debt, do what you can to pay some of it down before you apply for a loan. Also, make sure you make all of your payments on time.

Employee Vs Self-Employed Documentation

What do you need to apply for a loan? The type of documents you’ll be asked to produce depends a bit on whether you’re an employee or self-employed.

Salaried Employees

Salaried employees are typically asked to produce the following information:

  • Proof of identification
  • Proof of residence
  • Proof of salary
  • Bank statements
  • 2 passport photos

Self-Employed

Since self-employed people don’t have the luxury of receiving a specific salary every few weeks, you may need to produce a few more documents such as:

  • Proof of identity
  • Proof of address
  • Proof of residence
  • Proof of income
  • Proof of business ownership
  • Proof of business continuity
  • 6 months worth of bank statements

To prove your identity, you can produce one of the following documents:

  • Passport
  • Driver’s license
  • State ID
  • Birth certificate
  • Certificate of citizenship
  • Military ID

To prove your residence, you can use your most recent utility bills or your lease. If you use a utility bill, make sure it’s less than three months old.

You can provide pay stubs or recent bank statements showing you’re receiving direct deposit payments from your employer.

Keep in mind, each loan and each lender has its own list of documents they want to look at. Let’s take a look at the typical document requirements for the following loans.

Applying for a PayDay Loan

What do you need to get a loan? It sometimes depends on the type of loan you need.

With payday loans, check with your state first. While they’re short-term loans, they also have very high interest rates.

As a result, some states severely limited their use. If you choose to go ahead with this type of loan, here’s what you’ll need:

  • Identification
  • A check from a valid bank account
  • Proof of income

Just remember that once your loan is up, that check you wrote will get cashed. You need to ensure you have the money to not only cover the full amount of the loan but the interest charges as well.

What You’ll Need for a Personal Loan

personal loan can be unsecured. That means you can get money without needing to put up any type of collateral. Collateral is usually something such as your home or vehicle.

Since you’re not required to put up collateral, you do need a high credit score in order to make lenders feel confident about lending you their money. To prove that you’re a good risk, be prepared to provide lenders with a lot more documentation than a payday loan.

Typically, you’ll be asked to provide the following documentation:

  • Identification
  • Proof of income
  • Employer contact information
  • Your contact information such as your phone number and address
  • Most recent tax return
  • Proof of additional assets such as investments
  • Bank and credit account information

Some lenders may ask more than one year of tax returns.

Car Title Loan Requirements

You can get a car title loan by using your own vehicle as collateral to receive cash. However, you must own your car outright to apply for this loan.

Car title loans often work as a good alternative for those who aren’t able to secure a conventional loan. Also, since car title loans are secured, many choose to get this loan because of the better rates they receive.

Typically, you’ll be asked to provide the following information for a car title loan:

  • Physical title of the vehicle
  • Proof of residence
  • Proof of address
  • Proof of auto insurance
  • Proof of income

The physical title must have the applicants name on it. It also must be in good condition. Lenders won’t accept titles that are reconstructed. You may need to order a new copy from the DMV.

Also, it must be a car. Other types of vehicles such as motorcycles, trailers, RVs, and commercial vehicles are not eligible for this type of loan.

Your recent credit history cannot contain any bankruptcies and you can only get a loan if you live in the same state as the lender.

What You’ll Need to Provide for an Auto Loan

Auto loans require a little less documentation than a car title loan does. You may not even need to provide proof of income during the application process.

Instead, the lender may simply ask for you to tell them your income amount and to have you provide them with your employer’s contact information. They’ll use that to verify your information.

Often, with this type of loan, the type of documentation you need to provide has much to do with your credit history. However, most lenders will ask for the following:

  • Identification
  • Proof of income
  • Employer contact info
  • Personal contact info

Alert your employer ahead of time about your intent to obtain a loan. Otherwise, they won’t be able to confirm your salary information to the lender. This will make the loan process take even longer.

Documents Necessary for a Student Loan

If you or someone you love is about to head to college, you may need a student loan. Here’s what information you’ll need to apply for one:

  • Identification
  • Social security number
  • Employer information
  • Income information
  • Tax documents
  • Bank information
  • Proof of additional assets
  • Current payment obligations

Most applications for student loans also ask you to supply information regarding any current bills you have. This includes items such as your monthly mortgage payments and if you owe spousal support.

The Information You Need to Get a Mortgage

In terms of personal loan documentation, applying for a mortgage requires the most amount of paperwork. That’s because a home is usually the most expensive item people own.

Lenders want to feel comfortable lending out large sums of money so they can ensure they get their money back. Here’s a typical list of the documents you’ll be asked to provide to a lender:

  • Identification
  • Proof of income
  • Personal contact information
  • Employer contact information
  • Recent tax returns
  • Proof of assets
  • Completed mortgage application
  • Bank and credit card account information

What Else You May Need

Besides providing your state ID, you may be asked to produce your social security card as well. Contact information typically is your address, phone number, and email address.

Proof of assets are usually things like your 401(k) or other types of investments. This is to ensure you have the ability to pay your mortgage each month.

Most lenders will ask you to list all of your credit card and bank account numbers as well as the name of the bank. And don’t be surprised if you’re asked for additional information along with what’s listed above.

And you’ll need to keep the information up-to-date until you find the right mortgage offer.

Tips on How to Speed Up the Process

The more you prepare in advance, the quicker and easier the approval process will be. You’ll also be able to determine whether or not you’re even eligible for the loan before you apply.

If you’re applying online, do your research first to find out which documents you’ll need before you start the application process. Gather everything together and keep it nearby.

Scan Your Documents

Do yourself a favor and scan all your documents before you get started. That way, you’ll have an electronic copy of all your important documents.

You’ll also have everything saved in case you misplace an original. If you do not have a scanner, there are apps which allow you to scan documents.

Always Save Your Work

Make life easier for yourself by taking advantage of the “save and complete later” function most online application forms provide. That way, if you’re interrupted for any reason, you won’t have to start all over from the beginning.

Also, remember to write down your login information somewhere safe. And use a password that’s hard for others to guess.

You’re putting your most personal and vulnerable information online, don’t let some hacker ruin you financially because you chose a simple password a child could easily guess.

Work With Us

After you gather your personal loan documents together, make sure to spend time researching the best and safest places to obtain your loan. Don’t forget to find out what the interest rate will be.

And don’t be discouraged if you have bad credit. There are still loans available to you. Click here to learn how to get approved even with bad credit.