If you don’t have the cash to cover an expense, like a medical bill or roof replacement, a personal loan can come in handy. In most cases, you’ll receive a lump sum of money upfront and repay it through fixed monthly payments over an agreed-upon term.

Before applying for a personal loan, it’s a good idea to familiarize yourself with the requirements. While eligibility criteria vary from lender to lender, most lenders will consider the following when they review your application to determine whether or not to approve you.

Credit score

Your credit score is one of the most important factors a lender will look at when you apply for a personal loan. Credit scores are based on payment history, amounts owed, credit history length, credit mix, and new credit. Fortunately, some lenders may approve you, even if you have a low credit score.


Since your income will show if you have the means to pay back a personal loan, a lender will likely have a minimum income requirement. They may also ask that you have a steady employment situation. You’ll be asked to provide proof of income and employment through various documents.

Debt to income ratio

Debt to income ratio is all your monthly debt payments divided by your gross monthly income. The lower your ratio, the better because it can demonstrate that you’re likely to make payments on your current debt and a new personal loan should you take one out. Do your best to aim for a debt-to-income ratio of no more than 50%.


If you apply for a secured personal loan, you’ll be required to pledge an asset as collateral. This may be your car, investment account, real estate, or collectibles like precious metals or coins. If you don’t make your payments, the lender will have the right to repossess your collateral to recoup their losses.

Personal loan documents

When you decide to formally apply for a personal loan, the lender will ask you to submit a number of documents, such as:

  • Loan application: Most applications can be completed online from the comfort of your own home. When you fill one out, expect to provide basic personal details and financial details.
  • Proof of identity: The lender wants to know that you are who you say you are. Therefore, they’ll likely require two forms of ID. A driver’s license, passport, birth certificate, and certificate of citizenship are all acceptable.
  • Income verification: Lenders will need you to confirm your income, regardless of if you’re self-employed, work a traditional job, or receive alimony, retirement, or Social Security income. Paystubs, tax returns, and bank statements are the most common forms of income verification.

The Bottom Line

Fortunately, it’s fairly easy and convenient to apply for and get approved for a personal loan. As long as you know what most personal loan lenders look for, you’ll be able to avoid surprises and streamline the application process.


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Contact Information:

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