Here’s Everything You Need to Get a Personal Loan

Whether your dog swallowed something he shouldn’t have or you want to finance the wedding of your dreams, a personal loan is a great option because it can be used for nearly anything.

Another benefit of personal loans is that they typically get approved quickly so you can use it for whatever you need it for, as long as you show up with everything you need.

What do you need to get a loan? Keep reading to find out how to apply for personal loans as we answer that question and others.

Where to Apply for Personal Loans

There are some shady places out there that offer personal loans, but you’ll do much better if you avoid those. They often have high interest rates or are otherwise designed to rip you off in the end.

Let’s take a closer look at the two best places to apply for a personal loan.

Banks or Credit Unions

Your local bank or credit union should be your first stop if you want a personal loan. These are great if you plan on using anything for collateral. Using collateral makes the loan secured and can provide you with a lower interest rate.

The downside to these institutions is that they may take longer to approve your loan.

Online Lenders

If you need money fast, an online lender could be the right choice for you. Often, they only require a few things and you don’t have to come up with collateral. They may also offer more flexible repayment terms.

Before you apply to an online lender, be sure to get information about them so you know what to expect. Since many of these are operated individually, each one will operate differently and have different expectations of you.

What Do You Need to Get a Loan?

Let’s dig into what you need to qualify for a personal loan. Although every place is going to be different, these are required by most places.

Regular Income

You need to prove that you can pay back your personal loan, especially when you’re taking out an unsecured loan. Typically, you’ll need at least three months of paychecks to show you have a steady job.

Low Debt-to-income Ratio

If your debts make up more than 40% of your annual income, lenders may consider this a red flag. This is particularly true if it’s primarily credit card debt or other short-term loans.

Documentation for Prequalification

Be sure to have these things with you when you apply for a personal loan:

• Your social security number
• Proof of income
• Proof of debts
• Name, address, and phone number of your current employer
• Your personal information including previous addresses
• Your mother’s maiden name

With this information, a lender will do a “soft check” to see if you are eligible for a personal loan. If so, they will then do a full credit check to confirm before you get your loan.

Get More Financial Tips

Now you know the answer to the question, “What do you need to get a loan?” As you can see, it doesn’t take long to gather the required documents and apply for a personal loan.

To get more financial tips and tricks, keep reading our blog. It’s full of information you can use to gain financial freedom and do more with your money.

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