When you need a loan, it helps to know what lenders look for to approve borrowers. Personal loan requirements typically hinge on a combination of credit scores, income, and debt, though the exact numbers you’ll need to have vary by lender. We’ll walk you through what’s required for a personal loan to give you the best chances of approval.
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Personal loan requirements
Personal loan eligibility isn’t about just one thing; lenders look at the bigger financial picture to decide whether you’re a good candidate for a loan. So what do you need to get a personal loan? Our handy checklist breaks it down.
1. Valid ID
Lenders need to verify that you are who you say are, so you’ll need a valid form of identification. That might include a:
- Driver’s license or permit
- State-issued ID
- Military ID
- Student ID
- Passport
- Birth certificate
- Green card (for permanent residents)
Some forms of ID require a Social Security number, though certain states allow residents to get a driver’s license or ID using an Individual Taxpayer Identification Number (ITIN) instead.
Can you get a personal loan without a Social Security number?
Yes you can. You’ll just need to find the right lender. Credible is an online lending marketplace that features lenders who offer loans to borrowers with an ITIN. You may also look into peer-to-peer lending platforms or local credit unions for loan options.
2. Minimum credit score
Credit scores reflect how you manage debt. There is no universal minimum credit score to get a personal loan. Upstart, for example, has no minimum score, while LightStream prefers a score of 660 or better.
These resources let you check your scores for free before you apply to see how well you align with a lender’s expectations.
Can you get a personal loan with no credit check or bad credit?
Yes; some lenders advertise no-credit-check or guaranteed-approval loans for people with limited credit, bad credit, or no credit.
These loans may use alternative information, such as your work history or income, to approve you if you don’t have a credit score or have poor credit. However, they can be expensive because they pose a greater risk to the lender. To compensate, the lender may charge you a higher rate.
3. Verifiable income
There’s no universal minimum income you need for a personal loan. Higher income can work in your favor; Best Egg, for example, prefers borrowers who make $100,000 or more.
Regardless of the minimum amount of income a lender expects, you’ll need to provide proof of it for a personal loan. Documents you can use to verify income include:
- Bank statements
- Pay stubs
- W-2s
- Tax returns
- Profit and loss statements and cash-flow statements (if self-employed)
Can you get a personal loan with irregular income?
Yes, it’s possible to get a personal loan even if your income fluctuates month to month due to changing work schedules, self-employment, or seasonal employment. You may just need to provide proof of income over a longer period, e.g., six to 12 months, rather than one to three months.
4. Debt-to-income ratio (DTI)
Debt-to-income ratio (DTI) measures the percentage of your gross pay that goes to debt repayment each month. Lenders look at DTI to gauge your ability to comfortably repay a new loan, on top of your existing debt.
You can use this formula (or a DTI calculator) to find your number:
Monthly Debt Payments / Gross Monthly Income x 100 = DTI
For example, if you pay $1,500 per month toward debt and your gross pay is $5,000, your DTI is 30%. Generally, lenders prefer a DTI of 36% or less if you plan to apply for a personal loan.
To calculate DTI, you’ll need to know how much you pay to debt each month and how much money you bring in. You can use your credit card statements and pay stubs (or other income verification documents if self-employed) to find those numbers.
DTI doesn’t affect your credit score because income isn’t part of the scoring formula. However, DTI plays a major role in loan approval decisions. For larger loans, a high DTI can lead to a denial or less favorable terms, even if your credit score is strong.
Many lenders follow guidelines such as the 28/36 rule, which limit housing costs to 28% of income and total debt to 36%, though some allow higher limits. A strong credit score gets you in the door, but a manageable DTI often determines final approval and loan amount.
Can you get a personal loan if you already have debt?
Yes, lenders won’t deny you simply because you owe money to another creditor. However, a DTI that’s too high could disqualify you for a loan if the lender considers it too risky.
5. Proof of employment
Along with income, lenders consider your employment history. Generally, a lender wants to ensure that your job is stable and is likely to stay that way while while you’re repaying your loan.
Some of the documents you may be asked for to prove employment include:
- Pay stubs
- Tax returns
- W-2s or 1099s
- Verification letters from employers (or clients, if you’re self-employed)
- Profit and loss statements and cash flow statements (if self-employed)
What if your income doesn’t come from employment?
For example, what if your only income is from domestic support payments or government benefits, like unemployment compensation or Social Security? Can you get a personal loan without a job?
Yes, though your lender will likely ask for a more detailed breakdown of your income to make sure you can pay. If you’re worried about approval, you could look into getting a cosigner or applying for a secured loan.
6. Collateral (for secured loans)
Secured loans are tied to collateral, which is something of value that you own. For example, you may be able to get a personal loan using your car or a bank account as collateral. If you don’t repay the loan, the lender gets to keep your collateral.
How hard is it to get a secured personal loan?
It may be easier to qualify for than an unsecured loan. Your collateral reduces the lender’s risk; it could also help you snag a lower interest rate.
How to apply for a personal loan
Ready to apply? Here’s a quick step-by-step rundown of how to take out a personal loan.
- Organize your documents
- Check your FICO score
- Compare lenders and get at least three rate quotes
- Determine what collateral to offer, if applicable
- Choose a lender and apply
How long does it take to get a personal loan?
Some lenders may offer instant or near-instant approval. If approved, you may be able to get loan funding the same day or the next business day.
“If you’re not quite qualified for a personal loan, start by reviewing your credit report to ensure all information is accurate and address any errors. Next, focus on reducing your DTI by paying down small balances or increasing verifiable income, if possible. These steps can improve your approval odds. You might also consider applying for a secured loan if you have collateral, or adding a qualified cosigner with higher income and credit to strengthen your application.
If you’re denied for a personal loan
Being denied for a personal loan is never pleasant. If that happens to you, here’s what you can do next.
- Ask for an explanation of the denial
- Verify that the reason for denial is accurate
- Request reconsideration
- Wait to reapply (if you don’t have an urgent need)
- Explore loan alternatives (if you need money now)
What are personal loan alternatives?
You might ask friends and family for a loan, use a credit card to cover your needs, or sell things you don’t need to raise extra cash.
How to improve approval odds
Improving your personal loan approval odds means making yourself as attractive as possible to lenders. Here are some of the most proactive ways to do that.
- Aim for a credit score of 640 or better by paying bills on time and keeping debt levels low
- Reduce your DTI to 36% or below
- Increase your income if possible by taking on more hours, getting a part-time job, or starting a side hustle
- Consider a cosigner or co-borrower to strengthen your application
Understanding personal loan requirements can make it easier to navigate the lender search and application process.
Here are several of our picks for the best personal loans:
Learn more about the best personal loans and what you’ll need to qualify for each one.
Article sources
At LendEDU, our writers and editors rely on primary sources, such as government data and websites, industry reports and whitepapers, and interviews with experts and company representatives. We also reference reputable company websites and research from established publishers. This approach allows us to produce content that is accurate, unbiased, and supported by reliable evidence. Read more about our editorial standards.
- American Immigration Council, The Facts About the Individual Taxpayer Identification Number (ITIN)
- myFICO, Your FICO Score, From FICO
- Experian, Free Credit Score
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About our contributors
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Written by Rebecca Lake, CEPF®Rebecca Lake is a certified educator in personal finance (CEPF®) and freelance writer specializing in finance.
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Edited by Kristen Barrett, MATKristen Barrett is a managing editor at LendEDU. She lives in Cincinnati, Ohio, with her wife and their three senior rescue dogs. She has edited and written personal finance content since 2015.
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Reviewed by Eric Kirste, CFP®Eric Kirste, CFP®, CIMA®, AIF®, is a founding principal wealth manager for Savvy Wealth. Eric brings more than two decades of wealth management experience working with clients, families, and their businesses, and serving in different leadership capacities.