To get approved for a personal loan, it’s likely that you’ll have to provide personal and financial documentation during the application process. While each lender has its own unique application and eligibility requirements, many of them look for similar documentation. By familiarizing yourself with the types of documents you may need, you can prepare for a smooth and efficient application process and increase your chances of approval.

Personal loan documents your lender may require

During the initial application and the verification process, you may have to provide your lender with a few documents. Most of the documents can be submitted electronically.

1. Loan application

Each lender will have an application to initiate the loan process, and this application can look different from lender to lender. For example, if you’re borrowing from an online lender, the process is often done entirely online, while applications with traditional banks and credit unions can typically be completed in person or online.

This initial application will often ask for your personal information, such as your name, address, phone number, date of birth, and Social Security Number. You may also be required to state your desired loan amount and purpose, as well as additional financial details like your gross monthly income or mortgage payment.

2. Proof of identity

Lenders must be able to verify your identity to determine if you meet its minimum eligibility requirements. You’ll typically need to present two forms of identification, such as:

  • Birth certificate
  • Certificate of citizenship
  • Driver’s license
  • Military ID
  • Passport
  • Social Security card
  • State-issued ID

In most cases, you can make copies of your two forms of ID so that you don’t have to submit your originals to the lender or you can upload the documents electronically.

If you’re not a U.S. citizen or permanent resident, you may be able to qualify for a loan with select lenders that work exclusively with eligible noncitizens. Having a valid visa and Individual Taxpayer Identification Number (ITIN) are typically required to borrow from such lenders.

3. Employer and income verification

Unsecured personal loans are harder to get approved for, as they don’t require that the borrower puts up collateral to back the loan. Due to the increased level of risk for the lender, it’s often required that applicants have a steady stream of verifiable income to get approved.

If you are traditionally employed, you can usually verify your income with the following documents:

  • Paystubs
  • Tax returns
  • W-2s and 1099s
  • Bank statements
  • Employer’s contact information

If you’re self-employed, you can usually verify your income with the following documents:

  • Bank statement
  • 1099s
  • Income tax returns

To find your paystubs and tax forms, log in to your payroll provider’s online database or contact your human resources or payroll department. If you work with a CPA or other tax professional, they might be able to help you find the tax forms if you can’t locate them through your employer.

4. Proof of address

Proof of your living situation can help a lender determine how stable your lifestyle is. While some lenders may require specific documentation, you can usually use one of the following:

  • Utility bill
  • Lease or rental agreement
  • Mortgage statement
  • Proof of insurance on your home, lease/rental or vehicle
  • Voter registration card
  • Property tax receipt
  • Bank or credit card statement

If you need a change of address confirmation, the U.S. Postal Service offers resources to help you change, and confirm, a change of residential address. While the fastest and easiest way to do this is online, you can also go to your local post office and complete a form in-person.

What if you don’t get approved for your loan?

If you don’t get approved for a personal loan, there are a couple of other ways to get the funds that you need.

  • Get a co-signer: A co-signer is a trusted family member or friend who assumes legal responsibility for the loan and signs on the application as well. Getting a co-signer who meets the eligibility requirements can help you score a more competitive rate and may increase your approval odds. However, if you miss a payment it’ll knock your co-signer’s credit and they’ll be required to make the payment on your behalf so be sure you can make the monthly payments prior to asking.
  • Choose a secured personal loan: Most personal loans are unsecured, meaning they don’t require collateral like your house or car. Secured personal loans, on the other hand, are backed by collateral. The lender may seize your collateral if you fail to repay your loan. By applying for a secured personal loan, you can reduce the lender’s risk and increase your approval chances.

Other information you may need

Although the lender will likely collect this information when you apply, it doesn’t hurt to have it handy if you’re asked about your credit rating or why you want to borrow the funds.

Credit score

Once you initiate the loan application process, the lender will do a hard pull of your credit score, which will affect your credit. While some lenders only lend to borrowers with high credit scores, others are lenient and willing to take a chance on those with lower scores. Remember that if your credit score is on the low side, you may have to accept a higher interest rate.

Loan purpose

While most lenders aren’t too concerned with how you’ll use the loan, understanding its purpose may help them recommend the best loan product for your needs. Some lenders offer loans for a specific purpose, like debt consolidation. Or you could apply for a personal loan to cover the cost of home improvements and upgrades, medical expenses, adoption costs, wedding fees, travel, or some other big-ticket purchase.

Monthly expenses

Some lenders will request an itemized list of your recurring monthly expenses. These include housing and utility costs, auto loan payments, insurance premiums, student loan payments and credit card payments. The sum of your expenses will be deducted from your monthly income to determine if you can comfortably afford the loan personal payment or if it could stretch your budget too thin.

The bottom line

Gathering the information and documents you’ll need before applying for a personal loan can save you time by ensuring a smooth and quick application process. Plus, you can minimize the chance of having to deal with a lengthy processing time and potential funding delays. Keep in mind that not all lenders have the same requirements, so make sure you’re aware of the general documentation criteria before applying.