A personal loan (also called an unsecured ) offers you a way to use your own financial history or income as the basis for cash. This would be a that is not meant for your business, but rather for personal financial needs. Some people use these to pay off upcoming bills, while others use them to finance vacations. Whatever your need, you should know whether you would be eligible for such a loan.
Basic Eligibility Requirements
The law requires certain things of you when you go to apply for a loan. The lender may have a separate set of requirements as well, so you’ll need to look at those too. Let’s start with the legal requirements for a personal loan, though.
You will need to be 18 years old at least and have a valid form of national ID. These basic requirements limit anyone who is considered a minor or not a citizen from borrowing money. This protects the lender against risks and ensures that the person who borrows money at least has some chance of paying the money back on time and understanding what they are getting into.
Now, the lenders will each have their own set of requirements, but they all function on the same basic principles. They are going to start by looking at your income. They want to know that you have a steady income and that you will be able to put some of that toward repaying your loan, when the time comes. If you can’t prove you have a job, then you aren’t likely to get a loan.
You can usually present a pay stub as proof of employment. Some lenders may want further proof beyond that, but most of them will be satisfied with a single pay stub.
The lender may also perform a credit check. This means they will look at your credit history report and determine eligibility based on that. If they perform this action, then your credit history will directly affect not only whether or not you are approved for a loan, but also how much the loan will be for. Thankfully, for those who have poor credit, there are plenty of lenders out there who don’t use credit
checks at all. These are called fast cash or payday lenders, most of the time, and they will base the loan approval on your income rather than your credit history.
The lender may also ask about your bills. Your income may be enough to qualify you for a loan, but if you factor in your bills you pay every month, that may not leave you with much left to put toward the loan. The lender may want to know that, and if they don’t think you have enough money left over each month to make your loan payments, they may offer you a smaller loan or deny your application altogether.
You should be aware of all these requirements before you go to apply for a loan and be prepared to meet those requirements during your application process. If you can manage to meet the basic requirements, you should be able to get at least some kind of personal loan.