How To Get A Personal Loan? Sometimes you need a loan – perhaps you’re trying to purchase a new car or you need funds to put on a new roof. Many people also take one out to consolidate high-interest loans or save money on interest.
Whatever the reason, you’ll want to learn how to get a personal loan. We’ll go over exactly what a personal loan is, what you may use it for and how to go about getting one.
What Is A Personal Loan?
One of the major draws of a personal loan is that it’s, well, personal. Borrowers can use personal loans for almost any situation: to support a small business; to make a major purchase; for home improvement, car expenses, medical expenses, family planning or to consolidate debt. That’s why it’s such a major draw for most folks – it’s a flexible loan.
Personal loans are also unsecured, meaning you don’t need to put up any collateral like a car or your home. They usually come with a fixed interest rate – meaning the interest rate won’t change during the duration of the loan and your payments will be the same every month.
How Much Will A Bank Give Me For A Personal Loan?
In terms of how much you can get for a personal loan, different lenders – banks, credit unions and online lending companies – have their own criteria for creditworthiness.
Different lenders will require different credit scores, and will consider other factors such as your income. (If you’re wondering whether you can get a loan without a job, it depends on the lender’s requirements.) Keep in mind, however, that if the minimum requirement for a credit score is lower, other factors might be weighted more heavily, such as your employment history, education or income.
You’ll want to do your research and check the lending requirements for a bank, credit union or lending company before committing to your lender.
What Are The Personal Loan Requirements?
When figuring how to get approved for a personal loan, you’ll want to compare offers. That means first getting prequalified (which is considered a soft credit pull and which may not affect your credit score). To get prequalified, the lender will require some basic information, including:
- Your name
- Current address
- Income information
- Social Security number
- Date of birth
When you decide to submit a full application, you’ll typically be asked to provide:
- Bank account information
- Driver’s license
- Pay stubs
- Bank statements
- Tax forms
Some lenders might ask for some of these documents during the prequalification process as well. To save you time and minimize hassle, it’s a good idea to start gathering all your financial documents when beginning your search.
A lot of lenders will list their requirements on their website. If you have any questions or would like greater specifics, you can always reach out and to a Loan Expert to gather more information.
What Kind Of Credit Score Do You Need To Get A Personal Loan?
While it depends largely on the lender, the minimum credit score you’ll need to get a personal loan usually falls anywhere between 600 and 700. Generally speaking, the higher your score, the better your chances of approval, as well as the most competitive rates and terms. Lenders will also consider your debt history.
If you have fair or average credit, it’ll be tougher for you to get approved. A credit score is a major part of determining your creditworthiness, but it doesn’t show lenders your entire financial profile. Your income gets considered, as well as your employment history in some cases. Additional documents may be needed if you’re self-employed or if you own your own business.