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
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
- 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
Businesspeople and self-employed individuals may submit any of the following as income verification.
- 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, e