What Do You Need to Apply for a Personal Loan?


What do you need to apply for a personal loan? The process can seem overwhelming, but the smart and simplest thing to do is not panic. Just breathe, look over your options, and take things step by step. It can be intimidating to talk about your personal finances. It is important to find a financial professional that will treat you with respect and take the time to help with your unique situation.


This guide will help you pinpoint the basic requirements and documents you need before, during, and after the application process. This allows you to figure out what you need to apply for a personal loan and begin the process without any unnecessary worries.


Telcoe has been helping members with personal loans since 1950. We have the experience to help you obtain the lowest possible rate and easy repayments from your payroll deduction. A personal loan is a great option compared to higher rate credit cards. Not all personal loan rates are low. Your final rate will be determined by your credit score. A fixed rate personal loan will save you money compared to an adjustable rate credit card.


Documents and Requirements

There are several areas a lender will check to evaluate your personal loan application. You should know the status of this information to make sure you have what you need to apply for a personal loan.


Credit Score

Lenders will check your credit score when you apply for a personal loan. Most will look at your credit report and history, as well as your income and debt. Some will look at alternative information, such as the college you attended and the professional field in which you work.


If they see you have many accounts throughout your credit history, this shows a lender that you’re reliable in making payments. Borrowers that have credit cards, a mortgage, or even an auto loan with timely payments are more likely to qualify for a personal loan.

Debt-to-Income Ratio

A healthy debt-to-income ratio is important if you want to get a personal loan.


Your debt-to-income ratio (DTI) is the percentage you reach when you divide your total monthly debt payments by your gross monthly income.


You should aim for a DTI of less than 36%. Aiming for a low DTI proves that you can make payments on a new loan and increase the chances of your personal loan application being accepted. If your ratio is too high, lenders may think you’re stretched too thin to take on another loan.


Remember that each lender will have its own debt-to-income ratio requirement. You should check with several lenders to find out their DTI requirements and whether they have a minimum percentage for a personal loan.


Monthly Income

Lenders want to see you have a stable source of income to determine your ability to repay your loan. This way, you can keep up with payments without difficulty.


Many lenders will request you provide them with your annual salary and will have a minimum you’ll have to meet to qualify for a loan. They may also look at your debt payments.


Lenders will use your monthly income to calculate your debt-to-income ratio (DTI) to get an idea of your ability to make another monthly payment and how large a payment you could handle.


Important Documents

There are many documents you should have on hand when you enter into the personal loan application process.


Legal Identification

One document you need when you apply for a personal loan is your driver’s license or form of legal ID. Lenders must be able to verify your identity to make certain that you’re a United States citizen (or a permanent resident) and that you’re at least 18 years of age.


A lender might also want to confirm that you have a valid and active bank account. Likely, you will need to present at least two forms of identification. The following normally suffice as an accepted form of documentation:

  • Driver’s license

  • State-issued ID

  • Certificate of citizenship

  • Birth certificate

  • Social Security card

You may also need to provide proof of your living situation to help a lender know your lifestyle is stable. Usually, you can use one of the following:

  • Utility bill

  • Lease or rental agreement

  • Mortgage statement

  • Proof of insurance on your home, lease/rental, or vehicle

  • Property tax receipt

  • Bank or credit card statement

Employer and Income Verification

To apply for a personal loan, you will most likely need to provide employer and income verification. A lender will want to determine if you have a regular income and can afford to take on another loan.


If you’re employed, then these are the documents you can use to verify your income to a potential lender:

  • Paystubs

  • Tax returns

  • W-2s and 1099s

  • Bank statements

If you’re self-employed, you may be able to verify your income with the following instead:

  • Bank statement

  • 1099s

  • Income tax returns

At Telcoe Federal Credit Union, you have a few options for sending your documents and verification. You can easily email your paystubs or proof of income. Also, you have the choice to fax your documents once you apply or even stop by one of our locations. These choices can often make the application process easier!


Loan Application

Each lender has its own application process. This means that the loan application may look different for each lender.


For example, if you’re borrowing from an online lender, the application process is likely to be all online. If you’re borrowing from a traditional bank, the application will likely be done in person.


This initial application consists of basic information. These will be your personal details, such as your name, home address, phone number, date of birth, and Social Security number. You can also expect to state your requested loan amount and its purpose.


At Telcoe, you can apply for a loan application by calling or stopping by any branch for questions on what to expect.


Apply for a Loan the Smart Way!

What do you need to apply for a personal loan? Detail about your financial situation and a willingness to determine which lender and arrangement are best for you. At Telcoe Federal Credit Union, we can help you figure out a plan for your personal loan while keeping your best interests first.


We recommend that you take a look at our personal loans to get an idea of what’s best suited for you. We even offer options to help you raise your credit score if needed with our Credit Builder Loan.


See Our Personal Loans