We receive advertising fees from the brands we review that affect the ranking and scoring of such brands.
Advertiser Disclosure
This website is an informative comparison site that aims to offer its users find helpful information regarding the products and offers that will be suitable for their needs. We are able to maintain a free, high-quality service by receiving advertising fees from the brands and service providers we review on this website (though we may also review brands we are not engaged with). These advertising fees, combined with our criteria and methodology, such as the conversion rates, our team of reviewer's finding and subjective experience and product popularity, impact the placement and position of the brands within the comparison table. In the event rating or scoring are assigned by us, they are based on the position in the comparison table, or according to other formula in the event specifically detailed by us. See our How we Rate page and Terms of Use for information. The reviews, rating and scoring are provided “as-is” without guaranties or warranties regarding the information contained in our website, which shall not be considered as endorsement. We make the best efforts to keep the information up-to-date, however, an offer’s terms might change at any time. We do not compare or include all service providers, brands and offers available in the market.

What Documentation is Required For Personal Loans

Matthew Levy Updated: May 18, 2023 • 5 min read
You can benefit from personal loans in numerous ways like paying off higher interest credit, consolidating credit card debt, funding emergencies, and improving your credit score. But, like other types of loans, a personal loan application is only complete when the verification process is successful. While the documentation requirements and processing vary by lender, there are a few general guidelines that financial institutions follow while reviewing and approving personal loan applicants.  So, what do you need to apply for a personal loan in the US? This guide will help you acquaint yourself with the process of personal loan documentation and enable you to get through your application effortlessly. 

Documents are required for a personal loan 

Loan Application 

Unlike the Uniform Residential Loan Application Form (1003 Mortgage Application Form ), personal loan applications are unique and provided by your lender. You need to fill in your name, address, loan requirements, income, and liabilities. 

Valid ID Proof 

You need to submit a valid ID proof along with your long application form. It may be any of the following. 
  • Birth certificate
  • Certificate of citizenship
  • State-issued ID
  • Passport
  • Driver’s license
  • Military ID

Employer and Income Verification 

If you are salaried, you can provide any of the following to verify your income. Make sure to include the contact details of your employer.
  • Income tax returns
  • Bank statements
  • W-2s and 1099s
  • Paystubs
Businesspeople and self-employed individuals may submit any of the following as income verification. 
  • 1099s
  • Income tax returns

Proof of Address 

  • Driver’s license/Insurance card 
  • Utility bill
  • Property Tax Receipt 
  • Lease or rental agreement/Mortgage statement
  • Voter registration card
  • Bank or credit card statement
  • College enrollment papers

Credit score and payment history

The most fundamental aspect of the loan evaluation process is your credit score. Credit scores range anywhere between 300 and 850 due to factors such as length of credit history, amount of outstanding debt, and payment frequency.  Lenders use your credit score to determine the interest you pay, expressed as an annual percentage rate (APR). As of 2020, the average APR on personal loans in the United States is 9.34%, but it can range between 6 and 36 percent, depending on your creditworthiness. As shown in the table below, the higher the credit score, the lower the APR. 

Income Verification

Income verification is one of the key requirements for a personal loan. Lenders must validate that an applicant can repay their term loan on time. To do this, financial institutions may require pay stubs, bank statements of varied lengths, W-2s and 1099s, Schedule C self-documented income, 1040 federal and state tax returns, employer contact information, and in some cases, credit card processing statements.  The exact document requirements will depend on the nature of credit you seek. For example, if you are requesting a long-term personal loan in high amounts, your lender will want to analyze your long-term financial performance. Although some lenders may have minimum salary requirements for personal loans, there is no universal minimum since most will be interested in your financial commitment, assets, expenses, current debt, employment status, and credit history.  

Proof of identity

Lenders will need proof of both identity and residence as prerequisites for loan consideration. Typically, most lenders will require your social security card, DL, proof of legal residency, passport, or military ID. In addition to authenticating your identity, these documents will also allow your lender to pull your personal credit scores to determine your loan limits and APR. 

Loan Application

Every lender has its own loan application form. It can be manual or electronic. You need to fill in your personal details and loan requirements in the loan application. You may need to give your consent for a credit score check while applying. Some lenders charge an application fee (also known as credit appraisal) during this stage.

Get Prepper

When taking out a personal loan, it is essential to set goals realistically to ensure that your application is quickly processed. First and foremost, it is critical to determine beforehand how much you want to borrow and the type of personal loan you want, whether secured or unsecured. First, it is vital to establish your debt to income ratio, which is your total monthly debt payments divided by your total income. Usually, lenders prefer a ratio less than 0.4, which means your total mortgage/loan payments should be less than 40% of your income.  You may also want to consider how much you can afford to pay, considering all the penalties and fees involved if you cannot settle your loan on time. When borrowing, consider all costs, like processing, repayment, and late payment fees.  Check your credit score to determine your creditworthiness before applying for a loan. It will help you compare different interest rates for your credit score range. A lower credit score may result in rejection, while frequent credit-score checks can further dampen your credit score. Make sure to apply for loans from lenders that accept your credit score range. 

How to Apply for a Personal Loan

The following are five simple steps that can help you through the process of applying for your ideal personal loan. 
  • Determine Your Credit Limit 
As aforementioned, it is vital to determine your credit history before settling on the decision to borrow. The rate and loan amount you should receive will depend greatly on your creditworthiness. 
  • Get Prequalified for a Loan 
The best way to know the amount that you may receive from lenders is by getting a pre-qualified offer. Most online lenders and banks will perform a simple credit history check to determine how much you can borrow and at what rate. 
  • Compare Offers 
Prequalifying with a variety of lenders will allow you to compare estimated rates, payment amounts, and other critical factors such as penalties. Review the best offers available based on your needs, budget, and terms. Understand the simple trade-offs you need to make to get the best possible rate. 
  • Pick a Lender and Apply 
After doing your due diligence, it is time to pick the lender with the best offer for your needs and apply. This will entail submitting all the personal loan documents as required by the lender. Read all the terms carefully one last time before submitting your application. 
  • Approval, Funding, and Closing
The creditor will often run a thorough credit check before approving your application. In some cases, this hard credit check may briefly decrease your credit score by a few points. Your lender may also verify your employment or any collateral you wish to mortgage. Upon approval, you will receive a loan sanction letter with all the important terms and conditions of the loan. Read this carefully and sign the loan agreement with your lender. You will then receive your funds in your account in accordance with the lender’s terms. 


There is a lot to consider when applying for a personal loan. But, once you are sure of all the necessities, including personal loan documents and underlying terms and conditions such as interest rates, origination fees, and penalties, applying for a personal loan becomes a straightforward undertaking. The importance of a thorough personal examination cannot be overstated. It not only improves your chance of approval and helps you secure lower interest rates on your personal loans. 

Article Topics

Written by Matthew Levy twitter-icon

Matthew is a freelance financial copywriter with 10+ years in financial services. He holds a Bachelor of Science degree in Economics with business and finance options and is a CFA Charterholder. He is from Vancouver, Canada, but writes from all over the world.