It doesn’t matter what line of work you are in or what your financial situation is, you definitely had the need for a personal loan at least once in your life. If you are in need of one now, but you don’t have too much experience when it comes to this aspect of your financial plan, you’ve come to the right place. There are a few things you need to have in order before you apply for a personal loan. Here’s what those things are.
Credit Score and History
When it comes to personal loans, one of the most important factors lenders have to consider is the applicant’s credit score. In most situations, credit scores range from 300 to 850. The scores are based on things like payment history, amount of outstanding debt and length of credit history. In most cases, lenders are asking the applicants to have a minimum score of around 600 before they apply for a loan. This means you have to see what your score is before you apply. If you have a score that is lower than 600, don’t get discouraged because there are lenders that will lend you money even if you don’t have a credit history. In case you don’t have too much experience with lenders, the comparison service from Matchbanker can provide you with valuable information.
Income
Lenders have to ask for the income information in order to be sure whether the applicant will be able to repay a new loan. Different lenders require different minimum incomes. The thing you should know is that, in most cases, lenders will ask you what your yearly salary is. As proof of your claim, the lender might ask you to provide them with evidence of income. The evidence may include recent tax returns, monthly bank statements, pay stubs, and signed letters from employers.
Collateral
If you’re applying for a secured personal loan, there is a chance that your lender will require you to pledge valuable assets. Those assets are also known as collateral. What does this mean exactly? Well, in case you are not able to pay off your debt, the bank has the right to settle the debt by confiscating your other valuable assets. For example, your other cash accounts, investment accounts, real estate, and valuable collectibles. If you have a stable job, it won’t come to this. However, you should know that the bank will find a way to settle a debt if you can’t afford to pay.
