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What documents do you need when applying for a personal loan?

Woman applying for a personal loan

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Applying for a personal loan online and providing necessary documents is an easy process that can result in same-day funding, depending on the lender. 

You can even pre-qualify for a loan and then compare the rate and terms to other lenders. In most cases, this results in soft credit checks, which never hurt your credit scores—so there’s no downside to shopping around for personal loans.

Different lenders ask for different documents to complete their underwriting process. However, most companies want to evaluate basic financial and personal information, including your credit score, income history, address, and current debt obligations. Some information, such as your credit, can be easily obtained by potential lenders—but other information you must provide.

Alia Dudum, Millennial Money Expert at LendingClub, says, “To apply, you’ll need to first complete an online application that asks general information about your income and employment, as well as your address and Social Security number. You may also be asked to provide additional information or documents to help verify your identity, income or employment.”

Make sure to gather necessary documents before you apply for a personal loan so the process goes more smoothly and quickly. According to Dudum, applying for a personal loan with LendingClub is fast, easy and confidential.

Shopping for a loan? Compare personal loan offers.

Here are the main types of information a lender needs, and the documents they may require, when you’re applying for a personal loan:

1. Proof of identity

Lenders must verify your identity to know if you’re eligible to do business with them. In many cases, you must be a United States citizen or permanent resident, or living in the U.S. on a long-term visa. You must also be at least 18 years old and have a verifiable bank account.

Here are some types of documents a lender may accept to prove your personal identity:

  • Driver’s license
  • Social Security card
  • Passport
  • State ID
  • Military ID
  • Certificate of citizenship
  • Government-issued photo ID

Proof of address

Lenders must verify where you live because offers can vary depending on the laws in your state. They typically also request your previous address if you haven’t been at your current place very long.

Additionally, personal loan lenders want to know if you own your home or rent, and how long you’ve lived there. Living at the same address for more than two or three years can be a signal that you’re in a stable situation with no big lifestyle changes on the horizon that could negatively affect your finances.

Here are some types of documents a personal loan lender may accept to prove your address:

  • Utility bill (such as power, water, or cable)
  • Lease agreement
  • Voter registration
  • Change of address confirmation from the U.S. Postal Service
  • Insurance for your vehicle, rental, or home

3. Verification of income.

In addition to checking your credit, lenders need to know that you have enough reliable income to make your monthly payments. The higher your income, the less likely you are to run into financial trouble and default on a potential debt with them.

Lenders evaluate your income from the past two or three years to see how stable it is. If you were unemployed recently or have income that changes significantly from month to month, that can be a red flag.

Here are some types of documents a personal loan lender may accept to prove your income when you’re an employee:

  • Bank statements
  • Pay stubs
  • W-2 tax forms
  • Copies of income tax returns
  • Verification from your employer

These documents may be accepted to prove your income when you’re self-employed:

  • Bank statements
  • 1099 tax forms
  • Copies of income tax returns

In addition, many lenders will evaluate your current expenses—such as mortgages, vehicles, student loans, credit cards, and rent—to make sure you have enough cash flow to take on an additional loan payment.

If you get turned down for a personal loan, one option is to apply with a cosigner, such as a family member or friend who has good credit and income. That could help you qualify for a personal loan with the best interest rate and terms.

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