Personal loans are unsecured loans obtained by a borrower to cover large expenses and repaid over a repayment period (3 to 72 months) in monthly installments. They are a good source of cash inflow for many individuals and sole proprietorship businesses. However, to qualify for one, you must meet some basic requirements as well as go through additional verification if you are looking to get a larger loan amount.
When applying for personal loans, it’s best to aim for places with high acceptance rates and where you are at a lower risk of credit-ruining checks. iPaydayLoans, WeLoans, CocoLoan, BadCreditLoans, and CashAdvance are dependable online loan marketplaces where you can use these lenders. Now, let’s review all you need to know about personal loan qualification requirements;
Requirements To Get Personal Loans
Age
Each US state has an age requirement for processing a loan. In most states, the applicant should be at least 18 years old to qualify. In a few others, the minimum age requirement is 16, while other states may have an age restriction over 21 years old. The bottom line is an applicant cannot qualify for loans within a state if they do not meet the state’s age requirement.
Residency And Citizenship
Most lenders do not offer loans to applicants who are not US citizens or permanent residents. This set of lenders requires you to provide proof that you have a legal US status. So, you may be required to submit your Social Security Number, Visa, or Individual Taxpayer Identification number.
Credit Ratings And Credit Score
An applicant’s credit profile shows how they’ve handled past loans and may give pointers to how they’ll handle future loans. For this reason, many lenders consider credit ratings when evaluating an applicant’s creditworthiness. There are lenders that provide services to borrowers with zero credit history as long as the borrowers can provide valid proof of repayment abilities.
Bank Statement
A bank statement can be used as proof that a borrower for financial behavior assessment purposes. So, some lenders require prospective borrowers to submit a 3 to 6 months bank statement history showing they can afford a loan and with a relatively stable economic situation.
Income
One key factor lenders consider when giving out a loan is the borrower’s income. Lenders impose income requirements on applicants to be sure they have the wherewithal to repay the loan. Note that not only the salary from a regular 9-5 job can be considered valid income, but retirement benefits, compensations, and other similar sources of income can also be useful during the loan application.
Debt-to-income (DTI) ratio
This ratio, also known as DTI, is an indicator of an applicant’s financial health and is used by lenders to predict an applicant’s ability to fulfill due payments on new and current debt. Lenders are more inclined to grant borrowers with a DTI < 30% than those with DTI > 30%.