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?
When you apply for a loan, a lender is assessing your ability to pay it back in full. Whether or not your personal loan application is approved may be determined by several factors. If you’ve practiced safe and responsible financial habits in the past, like paying bills on time, those practices are likely to 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, you should start with a plan.
Personal Loan Application Checklist
- Choose your loan type. The purpose of your loan, whether it’s consolidating debt or paying for a home improvement project, will determine how much you need to borrow to accomplish your goal.
If you are consolidating debt, it’s important to make a list of the total debt you want to combine.
- Decide how much you can comfortably afford to pay each month on a personal loan.
- Decide when you want to pay off your loan. A personal loan calculator can help you evaluate loan terms.
- Estimate whether you are eligible for a loan. Generally, you need to be 18 or older and a U.S. citizen or more and meet other credit and income qualifications.
- Find out if you need to pay an origination fee or a prepayment penalty. Discover doesn’t charge either one.
Now that your plan is in place, you’re ready to apply for a personal loan. Here are our five tips that help in the process.
- Check Your Credit Score
There are a few ways to check your credit score. You can find your credit score by checking a credit card statement, talking to a credit counselor, using a credit score service or paying a credit reporting company directly. You can also use Discover’s Free Credit Scorecard, with no impact to your credit score.
Don’t worry if you receive slightly different scores from different agencies. This is common. Your credit score is determined by looking at your credit report. If one consumer reporting agency has different information from another reporting agency, they will have different credit scores for you. So take a close look at your credit report to make sure your information is accurate and up-to-date before applying.
- Look for the Right Lender
Choosing the right lender for your situation and needs might be one of the most overlooked aspects of getting a personal loan. When it comes to your personal finances, you should feel confident that the people you’re working with are reputable. So do the research. First, read the lender’s online reviews. Reviews can clue you in on potential issues or help a reputable lender stand out from the crowd. Before you move forward with a personal loan, ensure you’re comfortable that the lender you’re working with is reliable.
- Gather Personal Information
Before you apply for a personal loan, you will need to gather a few documents verifying your personal information. Start with the basics, including proof of address, date of birth and Social Security number. After those are secured, use this checklist for other information you may need to apply:
- Household income information – you may need to have pay stubs or bank statements if income verification is required.
- Bank account number and routing number if your funds will be directly deposited into your checking or savings account.
- Balances and account numbers for creditors if you want the lender to pay debts directly.
- Your contact information so you can be reached quickly to answer any questions.
- Personal identification – you should have 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 these documents readily available. too.
- Employment history – just in case, you may want to have contact information for your employer on hand.
- Fill Out Application
If you have gathered all of the required documents, applying for a personal loan should be relatively stress-free. 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.
- Review Terms and Accept
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. Ask a trusted friend or professional to give it a look as well. If you’re comfortable with the proposed terms, accept 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 talk you through each step, or get an online loan application started today.
Check out Discover’s online application to get started now. You can even preview your rate before you apply, with no impact on your credit score. Not a bit!