The main requirements for personal loan include being over 18 years of age, having a bank account, and having sufficient income or assets to pay the monthly loan.
Credit history also plays an important role. However, specific personal loan requirements vary from lender to lender. For example, Avant’s credit score requirement is 600 or higher, while Prosper’s credit score is 640, and SoFi’s credit score is 680. Most lenders do not disclose annual income requirements, but LendingPoint ($20,000+) and Citibank ($10,500+).
Certain personal loans may have other requirements, such as mortgage guarantees. Lenders also consider many other factors when applying, including existing debt, employment status and housing payments.
Personal loan requirements:
- Over 18 years old. A loan is a binding contract, and most states will not allow you to enter into a binding contract unless you are over 18 years old. Therefore, lenders usually do not provide loans to minors.
- SSN and US resident status. Many (but not all) lenders will only provide loans to US citizens and permanent residents. You may need to provide a social security number. Some lenders allow applicants to use personal taxpayer identification numbers or Visa instead.
- Bank accounts. The lender usually sends the funds to a bank account as a direct deposit. Certain types of loans (such as loans where you provide collateral) may not require you to have a bank account. But most loans will.
- stable income. The lender needs to be confident that you will repay the loan. Therefore, you need to prove that you have a source of income and/or important assets. Lenders usually don’t disclose minimum income requirements, but in addition to any other debt/expenses you have, you must be able to manage monthly payments.
- 585-700+ credit score. The lender requires the applicant to reach a certain credit score threshold before it can be approved. The most popular lenders usually require a credit score of at least 585 to 700. However, these requirements are not static. High income may help compensate for lower credit scores, and vice versa.
- Reasonable financial obligations. If the lender determines that you already owe too much money relative to your income and assets (that is, the amount you can repay), you may not be eligible. The lender will also consider monthly expenses, such as housing payments, which will reduce the amount you can use to repay the loan.
- Stable employment. If you do not have a job, it is impossible to obtain a loan. However, if you are unemployed, you need a strong alternative source of income, such as pensions, government benefits or investments.
Overall, good credit and disposable income are the two most important loan requirements for individuals. You can check the latest credit score for free, or compare personal loans based on the minimum credit score requirements on WalletHub. The lender will be able to provide more detailed information about other requirements.
Although each lender is slightly different, the basic knowledge of the application and approval process is almost the same. You can also use the same general methods to maximize your chances of success.
How to Qualify for a Personal Loan
To qualify for a personal loan, make sure you meet all personal loan requirements, from correct identification to obtaining a stable income to meeting the minimum credit score requirements. Before applying, you can use WalletHub’s free personal loan prequalification tool to see exactly which lenders may approve you and how much interest they can offer you.
How to Get a Personal Loan
The first step in obtaining a personal loan is prequalification. Then, according to the loan amount, repayment period, etc., compare the quotations you have qualified to exclude loans that cannot meet your needs for some reason. Then, submit a loan application that is estimated to provide you with the best interest rate.
A personal loan application requires several key personal information, including your name, SSN/ITIN, address and date of birth, and financial information such as your annual income and monthly mortgage/rent payment. If you are approved, it usually takes less than 7 working days to make a decision and receive your payment.
People also ask about personal loan
What credit score do you need for a personal loan?
The minimum credit score for personal loan approval is 585-600, depending on the lender. This means that it is possible to obtain unsecured personal loans with poor credit scores.
But it may not be cheap. The minimum credit score required for a personal loan with no founding fee and no mortgage is 660, which is fair credit. In order to obtain the best personal loan interest rate, the borrower will need good credit or excellent credit (with a credit score of 700 or higher). A personal loan with a credit score of less than 700 usually has a relatively low amount and a high APR.
Can you get a personal loan with a credit score below 550?
There are several ways to obtain a personal loan with a credit score below 550. These methods include obtaining secured personal loans, applying for unsecured personal loans with co-signers, borrowing money from family and friends, and checking with local credit unions.
Without the help of a co-signer with a high credit score, it is difficult for you to obtain an unsecured personal loan with a credit score below 550 on your own. Even loans with the loosest approval criteria require a credit score of 585. Personal loans with the lowest minimum credit requirements come from LendingPoint (requires 585+ points) and Avant (600+).
Veja Também: 2021 USAA Personal Loan Review