Requirements for a Personal Loan

A young man reviews what documents are needed for a personal loan.


Personal loans are highly flexible so they can be used for many different things. They are also relatively easy to qualify for. This is why personal loans are among the most common loans that lenders issue.

If you’re thinking about obtaining a personal loan, it’s important to understand the requirements before you apply because this may help to prevent delays in the processing of your application.

Credit Score

Your credit score is one of the most important things that lenders will consider when evaluating you for a personal loan. Most lenders will approve your loan with a credit score of at least 660, which is considered a fair score.

If your credit score is lower than that, there are some things you can do to increase it. First, it is critical that you make all of your debt payments on time each month because they’re reported to the credit reporting bureaus. On-time payments will help your score, while late payments may harm your score.

Another way to help your credit score is to make sure you’re using no more than 30% of your available credit at a time. This is referred to as your credit utilization, which is one of several factors that influences your credit score. Paying off credit card debt is the easiest way to lower your credit utilization.


Personal loans are unsecured loans, which means that no collateral is required. To make sure you can repay the money you borrow, your lender will verify that you are employed and have a steady income.

Documents that may be used to verify your employment and income include:

  • W2 form
  • Pay stubs
  • Bank statements
  • Income tax returns
  • Employer contact information

Documents that may be used to verify your income if you are self-employed include:

  • 1099 form
  • Bank statements
  • Income tax returns

Your employer will send out a W2 form at the end of each year for tax purposes. If you’re self-employed, you’ll receive 1099 forms from each business that paid you at least $600.

Current Debts

Your lender will evaluate your current debts to make sure you aren’t overextended before approving your application for a personal loan. Your current debts may be evaluated with the debt-to-income (DTI) ratio, which is a simple comparison of your monthly gross income to your monthly debts.

The DTI ratio is expressed as a percentage. If you have a DTI ratio of 28%, for example, it means that 28% of your monthly gross income is used to pay your debts. Lenders prefer to see DTI ratios of 36% or less.

If your DTI ratio is above 36%, you may be able to lower it by paying off some of your debts. The debt snowball method is a strategy that may work for you. With this strategy, you pay off your smallest debt and then apply the money toward your next smallest debt. You can continue the process until your DTI ratio is below 36%.

Loan Application

You’ll need to fill out and submit a formal loan application to qualify for a personal loan. Many lenders now give you the option of applying either in person or online.

But what documents are needed for a personal loan? When filling out the loan application, it’s important to make sure you include all requested information and that it is correct before you submit it. Omissions or errors could result in either a delay or loan rejection.

Government-Issued Identification

To protect both you and the lender from identity theft issues, you’ll be required to show two forms of government-issued identification. These will also be used to ensure that you are at least 18 years old and a US citizen.

Forms of identification that may be accepted include:

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

Proof of Address

Your lender may require documentation to verify your address and to confirm that you have a stable living situation.

Documents that may be accepted to verify your address include:

  • Bank statement
  • Rent agreement
  • Recent utility bill
  • Proof of insurance
  • Mortgage statement
  • Property tax receipt
  • Credit card statement
  • Voter registration card 

How to Get a Personal Loan

The steps to obtain a personal loan are simple and easy to follow. Remember to gather the documents needed for a personal loan before you apply to prevent delays in processing your application.

  1.     Make sure you have a good credit score
  2.     Determine the amount you need to borrow
  3.     Compare lenders and interest rates
  4.     Gather the required documents
  5.     Apply for the loan 

If you applied online, you’ll receive an official loan offer that you’ll need to sign and return before you can receive the money you’re borrowing. Be sure to review the offer before signing it to make sure you understand the loan terms and conditions.

After returning the loan offer, the funds may be deposited in your account. Depending on your lender, you may also have the option of picking up a check at a local branch

What to Do If Your Personal Loan Application Is Denied

If your personal loan application is denied, it’s important to find out the reason. Your lender should tell you why it was rejected and may offer suggestions to improve your chances of loan approval.

Being rejected for a personal loan doesn’t mean you can’t borrow the money you need. You may still be able to obtain a loan by applying again with a cosigner, offering collateral for the loan, or applying for a smaller amount.

Personal Loans With Atlantic Financial Federal Credit Union

To save yourself time and avoid headaches, it’s very important to know in advance what the requirements are for a personal loan. At Atlantic Financial Federal Credit Union, we offer a personal loan with a competitive interest rate, no application fee, and flexible terms of up to 60 months.

Click on the following link to learn more about our personal loans. You can also use our online loan calculator to estimate your monthly payments.

See our personal loan options & benefits