Three Documents You Need To Take When Applying For A Consumer Loan

When applying for a consumer loan for personal use, you want to make sure you have everything with you that the bank needs to process your application. Before going to the institution to apply, gather together the following three documents you will need when applying for the loan. 

Documents Showing Proof of Income

Since the bank will want to make sure you have enough money coming in to make your loan payments, take any documents with you that show proof of your income. These documents include tax forms and your most recent check stubs.

When collecting your tax forms, bring in the previous year's W-2 statement. If you have worked at the same place for several years, you may want to bring in the past two or three years' forms. Having several years' worth at the same place of employment shows you have a stable income.

Along with the W-2 forms, also take the last few months' check stubs. These prove that you are still at the same employer.

Bank Statements for Your Checking and Savings Accounts

Along with proof of income, take copies of your previous year's bank statements for any checking or savings accounts that you have. These statements can give the bank an overall view of your income and spending habits.

For example, if you always put back money into your savings account or have a decent balance in your checking account, this can show you handle your money responsibly. It also shows that your expenditures each month do not exceed your income.

However, if it looks as though you spend the money faster than you can make it, the bank may see this as a sign that your bills are close to exceeding your income. This may cause concern about your ability to repay the loan, especially if you already have bills like those discussed in the next section.

Copies of Any Outstanding Loans or Credit Cards

If you have any outstanding loans with another financial institution or credit cards, take copies of those with you. Depending on how much you owe other banks, these could impact the decision on your application.

Having another loan or credit cards does not necessarily impact your chances of receiving the loan. If the statements show you have low balances or are diligent about making payments, these could show your ability to pay back the loan in a good light.

Ensuring you have the above information with you can help avoid delays when applying for your loan. However, you may want to call the bank from which you are requesting the consumer loan to see if there is any additional information they require for your application.

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