Before you apply for your next personal loan, it’s important to know what you’re getting into. Personal loans are great because they can be approved quickly and without much hassle, but if you apply without paying attention to the lender’s requirements, you might find yourself in trouble later on down the line. Keep these 10 personal loan requirements in mind before you even think about filling out an application form online or visiting your local bank branch. You’ll be glad you did!
1) Income
One of the most important criteria when applying for a personal loan is your income, as it’s directly tied to your ability to repay. Most banks and credit unions, which offer personal loans, will require you to be employed and receiving a steady paycheck. However, there are still some options available if you’re currently unemployed or self-employed.
2) Credit Score
The most important factor lenders use to determine your creditworthiness is your credit score. Credit scores, which are issued by private companies, range from 300 to 850. Higher scores indicate that you’re likely to pay back your loan on time and with a minimum of fuss, while lower scores often point out people who are at risk of defaulting on their debt—those who may be unable or unwilling to repay it in full. A good score generally falls between 700 and 800.