Key takeaways

  • Lenders require a few documents that can serve as proof of your identity and financial information to approve you for a loan.
  • Some of the documents you'll be asked to provide include, copies of your state- or government-issued ID, copies of paystubs, tax returns or bank statements.
  • Having these documents on hand will not only make the application process smoother but will increase your chances of getting approved in a timely manner.

When you apply for a personal loan, you need to provide a series of documents to verify your personal and financial information to get approved. While each lender has its own unique application and eligibility requirements, many will ask for similar information.

By familiarizing yourself with the list of documents you may need, you’ll come to the application process better prepared, plus increase your chances of approval.

What do I need to apply for a personal loan?

During the initial application process, you will have to provide your lender with a few documents, in addition to some personal details, so they can verify your identity and financial information. Most of these can be submitted electronically.

1. Application form

Although all lenders require you to fill out an application form to approve you for a loan, this process can look different from one lender to the next. For example, if you’re borrowing from an online lender, the process is often done entirely online. 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 full name.
  • Contact information.
  • Date of birth.
  • 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 upload copies of these 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. These lenders will likely require a valid visa and Individual Taxpayer Identification Number (ITIN).

3. Employer and income verification

Unsecured personal loans are harder to get approved for since they don’t require you to put up collateral to back the loan. Due to the increased level of risk for the lender, you must have a steady stream of verifiable income to be approved.

If you are traditionally employed, you can verify your income with a few documents.

  • Pay stubs.
  • Tax returns.
  • W-2s and 1099s.
  • Bank statements.
  • Employer’s contact information.

If you’re self-employed, you can verify your income with a couple of different documents.

  • Bank statements.
  • 1099s.
  • Income tax returns.

To find your pay stubs 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 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 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 few ways to get the funds 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. Having a co-signer who meets the eligibility requirements may increase your approval odds.

However, your co-signer has responsibility for the loan. If you miss a payment or default on the loan, it could harm your co-signer’s credit score in addition to your own.

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, plus secure a lower rate.

Work on your credit score

If you don’t need a personal loan to cover a pressing emergency, consider working on your credit score. Paying down other debts, increasing your income and lowering your debt utilization ratio are all solid ways to get your score up.

Once you’ve worked on your score, you can apply again with increased odds of being approved.

Consider a credit card

A credit card is designed for small, everyday expenses, so it may not be the best choice if you need to cover a large expense. However, for common projects that are under $1,000, a credit card may be a better option. The applications require similar documents and information, and it may be easier to find a credit card that fits your needs.

Other information you may need when applying for a loan

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

Most lenders offer a prequalification process that will not harm your credit. However, if you prequalify, the lender will do a hard pull of your credit score.

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.