To get a personal loan, you need a government-issued ID, proof of income, a Social Security number, and a credit score that meets the lender’s minimum threshold. Beyond those basics, lenders evaluate your debt-to-income ratio and employment status to decide how much they’ll offer you and at what interest rate. Here’s a closer look at each requirement so you can gather everything before you apply.
Credit Score Minimums
Your credit score is the single biggest factor in whether you get approved and what rate you’re offered. There’s no universal minimum, but the thresholds break down roughly like this: traditional banks and credit unions tend to want scores in the mid-600s or higher, while many online lenders approve borrowers with scores as low as 580. A few lenders, like Upstart, consider applicants with scores as low as 300 or with very limited credit history, though you’ll pay significantly higher interest at that level.
Most personal loan applicants who get approved fall in the 600 to 700 range. If your score is above 670, you’ll generally qualify for the lowest rates and largest loan amounts. Below 580, your options narrow considerably, though secured personal loans (more on those below) can help you get approved when your score alone wouldn’t cut it.
Income and Employment Verification
Lenders need to confirm you earn enough to repay what you’re borrowing. The specific income floor varies by lender. Some set a clear threshold, with certain lenders requiring annual income of at least $35,000. Others don’t publish a minimum but will factor your income into their approval decision alongside your credit profile and existing debts.
You’ll typically need to provide:
- Recent pay stubs covering at least the last 30 days
- W-2 forms from the last two years
- Federal tax returns (signed) from the last two years
- Documentation of other income such as freelance earnings, rental income, Social Security benefits, or alimony
If you’re self-employed, expect lenders to scrutinize your tax returns more closely since you don’t have an employer verifying your earnings. Bank statements showing consistent deposits over several months can strengthen your application in that situation.
Debt-to-Income Ratio
Your debt-to-income ratio, or DTI, measures how much of your monthly gross income goes toward debt payments. To calculate it, add up all your monthly obligations (rent or mortgage, car payment, student loans, credit card minimums, and the proposed new loan payment) and divide by your gross monthly income.
Most personal loan lenders prefer a DTI below 36%, and many will approve borrowers up to about 43% to 50% depending on the lender and the strength of the rest of your application. A lower DTI signals that you have room in your budget to take on a new payment, which makes you less risky. If your DTI is too high, you may still get approved but for a smaller loan amount or a higher rate. Paying down existing balances before applying is one of the fastest ways to improve this number.
Documents You’ll Need
Having your paperwork ready before you start the application speeds everything up. Most lenders ask for the same core set:
- Government-issued ID: a driver’s license, state ID, or passport
- Social Security number: used to pull your credit report
- Proof of address: a utility bill, lease agreement, or bank statement showing your current address
- Bank statements: typically the two most recent, showing your account balances and cash flow
- Income documentation: pay stubs, W-2s, and tax returns as described above
Some lenders also ask for your employer’s name, address, and phone number so they can verify employment. If you’ve recently changed your legal name, bring documentation of that change as well.
Secured vs. Unsecured Loans
Most personal loans are unsecured, meaning you don’t put up any asset to back them. Approval is based entirely on your income, credit history, and DTI. Because the lender has no collateral to fall back on if you stop paying, unsecured loans carry higher interest rates and stricter credit requirements.
Secured personal loans let you pledge an asset, such as a savings account, certificate of deposit, or vehicle, as collateral. If you default, the lender can seize that asset. The tradeoff is easier approval: secured loans are often available to borrowers who are just starting to build credit or who have lower scores. Interest rates tend to be lower, too, since the lender’s risk is reduced. If your credit isn’t strong enough for an unsecured loan, a secured option may be the better path.
Where You Apply Matters
The type of lender you choose affects both what you need and how quickly you can get funded.
Banks and credit unions typically have stricter eligibility criteria. They may require higher credit scores and longer credit histories, and the application process often involves an in-person visit. The upside is that they tend to offer lower interest rates, and existing customers sometimes get rate discounts or fee waivers.
Online lenders generally have a faster, fully digital process. Some can approve your application within minutes and deposit funds the same day. They also tend to be more lenient on credit requirements, making them a better fit if your score is below 650 or your credit history is thin. The convenience comes with a tradeoff: online lenders are more likely to sell your loan to another servicer after origination, and rates can run higher for borrowers at the lower end of the credit spectrum.
Many lenders, both online and traditional, offer prequalification with a soft credit check that won’t affect your score. This lets you see estimated rates and loan amounts before committing to a full application, so you can shop around without any downside.
How Much You Can Borrow
Personal loan amounts typically range from $1,000 to $50,000, though some lenders go as high as $100,000 for well-qualified borrowers. The amount you’re approved for depends on the combination of your credit score, income, and DTI. A borrower with a 750 credit score and low existing debt will qualify for far more than someone with a 600 score carrying heavy monthly obligations.
Lenders also consider the loan’s purpose. Debt consolidation, home improvement, and medical expenses are common reasons that lenders view favorably. Some lenders restrict how funds can be used, so check before applying if you have a specific purpose in mind. Repayment terms usually range from two to seven years, and choosing a shorter term means higher monthly payments but less interest paid overall.