Personal loan process steps
If you’ve done your research on debt consolidation, you’ve probably thought about how to get a personal loan at some point. But do you know what steps to take to complete the process?
When you apply for a loan, a lender will assess your ability to pay it back in full. Whether or not your personal loan application is approved may be determined by several factors. For example, a history of practicing safe and responsible financial habits, like paying bills on time, may be rewarded during the application process.
Nonetheless, don’t take your loan approval for granted and begin an application unprepared. As with most financial commitments, your personal loan process steps should start with a plan. We’re here to help you prepare. We also offer assistance with the process itself. Here are some recommendations to help you along the way.
5 steps to take before you apply for a loan
1. Decide the purpose of your loan. Consider if you want to consolidate your debts to improve your financial health, pay for a home improvement project, get help with unexpected expenses or finance that dream vacation you’ve been wanting to take. How you plan to use your loan will help determine how much you need to borrow to accomplish your goals.
2. Do the math. Estimate the total expenses you need to cover before you take out the loan. If you plan to use your loan for consolidating debt, make a list of the debts you want to combine. Determine how much you can comfortably afford to pay each month on a personal loan. You should also think about when you want to pay off your loan.
Pro tip: Our personal loan calculator can help you with these projections.
3. Assess your eligibility. Generally, for a Discover personal loan, you need to be 18 or older and a U.S. citizen, have a household income of $25,000 or more and meet other credit and income qualifications. Eligibility requirements may vary, so be sure to understand what each lender you research may require.
4. Check your credit score. It’s important to know your credit score because it will impact the amount of money you can borrow as well as the rates you receive. You can use our free Credit Scorecard to check your score with no negative impact on your credit. Other sources for finding your credit score include a credit card statement, talking to a credit counselor, using a credit score service or paying a credit reporting company directly.
5. Do your research. You should feel assured that you’re working with reputable people and institutions, so do your homework before choosing where to borrow money. Search the Better Business Bureau for accredited lenders. Make a list of lending candidates and then look for online customer reviews about the company. The more assurances you can get, the better. Also, do your homework and make sure you understand the terms of the loan you’re planning to get. Knowing the nuts and bolts of borrowing will help you find a loan and lender that work best for you.
What do I need to apply for a personal loan?
Once you’ve chosen a lender, it helps to organize all the documentation you’ll need to apply. Start with the basics, including proof of address, date of birth and Social Security number. Use the checklist below for other information you may need to have on hand:
- Household income information. You may need to have pay stubs or bank statements to help verify your income with the lender.
- Bank account number and routing number. For direct deposit into your checking or savings account.
- Balances and account numbers for creditors. To use for debt consolidation if you want the lender to pay debts directly.
- Your contact information. So you can be reached quickly to answer any questions.
- Personal identification. Some lenders may require your state-issued driver’s license or identification card ready and easily accessible.
- Tax information. Some lenders require this as well. To be on the safe side, have a paper and digital copy of your 1040 form that you submitted for your previous year’s tax return.
- Employment history. Just in case, you may want to have contact information for your employer on hand as well as your places of employment from the past five years or so.
Gathering all of the required documents beforehand will help simplify the process and reduce stress on you during the application. Take your time, and make sure all of the required fields are filled out accurately. If you apply for a personal loan online, the application process is usually more efficient than working with a local bank or credit union. A lender like Discover also has loan specialists available to call if you have any questions or prefer to apply by phone.
Are there any other steps?
The online loan process is an efficient one that could move quickly once you’ve supplied all of the details. If your loan application is approved, take a close look at the terms of the loan before accepting. This is where your loan terms research will pay off. Ask a trusted friend or professional to give it a look as well. If you’re comfortable with the proposed terms, accept them and be on your way.
That’s it! At Discover Personal Loans, we’re happy to help guide you through the loan application steps to make it as easy as possible. Give us a call at 1-866-248-1255 to talk to a loan specialist who can help you through each step, or get an online loan application started today.
You can even preview your rate before you apply without harming your credit score. Get Started Now