Are You Eligible For A Personal Loan, And What Information Needs To Be Provided?

Personal loans are a great financial tool to provide your household budget with a bit of extra liquidity for a wide variety of purposes. Whether you are considering home renovations, have unexpected medical expenses or need to restructure your debt through debt consolidation, personal loans can be a prudent option to take.

If you are about to consider a Latitude personal loan or a personal loan through any lender, there are some things to keep in mind before heading out to shop around for the best rate. Having a better sense of how lenders think and what criteria they use to determine your eligibility will provide you with more realistic expectations.

Let’s look at some of the factors that go into determining whether you are eligible for a personal loan, and what information you will need to provide.

Factors To Consider

Lenders look at many different details regarding your financial situation in order to make an informed decision about whether to lend to you. These often include:

• Income: Lenders naturally want to ensure that you will be able to pay off the loan within the specified time period. It is difficult for most people to do this if they do not have regular and sufficient income. Some loan providers will lend more freely as long as you have some form of income, though larger loans typically require proof of a minimum monthly amount of income.
• Credit Score: One of the most important metrics that lenders use to determine your reliability as a borrower is your credit score. If you have never accessed your credit score before, then be sure to contact your national credit bureau to learn more about it. If you have been diligent in repaying your debts and your outstanding bills in the past, then you will likely have a positive credit score that can be used to secure better rates on personal loans. However, those with a poor credit score will find that they will have more difficulty in securing a reasonable rate. In these cases, it may be beneficial to take some time to improve your score before shopping around for loans.
• Employment: While income is assessed as a factor of your reliability, some lenders also insist that the individuals they lend to are regularly employed. For example, those who are self-employed or who only work part-time may have more limited options in the credit market than those who have a full-time position.
• Assets: Beyond the above factors, lenders also look at any assets you own to determine the riskiness of lending to you. Assets such as your home are weighed against any other outstanding debts you might have, such as credit card or other household debt.

Information To Provide

Naturally, you will need to have proof of all of the above factors in order to show your lender that you are eligible for a personal loan. You will also need to provide some form of identification, usually a driver’s license or a passport. Your income can usually be verified by providing your prospective lender with copies of your tax return or a payroll statement. Depending on the lender, you may also need to provide copies of your credit card statements and your mortgage, or rental contract.

Navigate Personal Loans With Ease

Once you have collected the documents outlined above, you will be ready to explore the options for personal loans. Be sure to contact at least a few different lenders in order to get a sense of what the overall market is like for consumer credit. This way, you will be better able to know what a good rate is and what the best possible loan will be for you.