What Do You Need to Get a Personal Loan?

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When a financial difficulty arises, getting a personal loan can be a way to ease the stress. Personal loans can be obtained from a bank, credit card company that provides personal loans, lending club or peer-to-peer network, or even from family and friends. In each case, certain information will be required from the applicant in order to apply for the loan. Getting all of your paperwork in order before applying will make the process a little easier.

Good Credit

In almost every case, you will need good credit to get a personal loan. Whether you choose to go through a bank or a peer-to-peer lending network, having good credit is the only way a lender can determine whether or not you will pay back the loan. Those with poor credit histories have not proven that they can or are willing to pay money back on time, or at all.


Collateral is often required in order to secure a personal loan. Collateral is something you own that has value that, essentially, a lender can take and sell if you can't pay back the loan. Certificates of deposit, real estate, savings accounts, stocks, jewelry and other items are often used to secure a cash loan.

In the case of someone looking to improve or clear up credit issues, often a bank will allow the applicant to put money in a savings account and then give a loan for an amount equal to or less than the amount in the savings account. The bank then automatically deducts payments, and the loan is listed as being paid on time on a credit report.

Proof of Income

When applying for a loan, whether secured or unsecured, the lender will need to see how much money you make. This helps the lender determine if the amount you requested for the loan is a reasonable amount to expect you to be able to pay back each month. You will need to provide your lender with several paycheck stubs, and possibly an income tax return. In some cases, the lender may call your Human Resources Department at your job to verify you work there. If you are self-employed, you may have to supply proof of your income.

Additional Information

You will also need to provide your lender with proof of your residence and proof of your age. No one under the age of 18 will be allowed to borrow money, except from family and friends. You will likely also need to provide your bank account information.