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What Documents are Needed for a Good Personal Loan?

What Documents are Needed for a Good Personal Loan?

There are tons of personal loans and personal loan lenders out there. If an individual is looking into this kind of lending, they may be curious about what documents they need to get a good personal loan. How good a personal loan is will depend on a few factors, including the most obvious—the interest rate.

There are a few documents that will be needed to get a good personal loan, and here is an explanation of those, along with the different factors that make a personal loan good.

What Factors Make a Personal Loan Good?

The lending process with personal loans can be fairly simple to understand. Since personal loans are so popular in the lending industry, there are a ton of resources for borrowers out there to learn about their general characteristics.

Some find that the hardest part of figuring out personal loans is trying to figure out what makes one better than the other, or what makes a personal loan good. Here are some factors to look out for with personal loans to obtain a suitable one:

The Interest Rate of the Personal Loan

The interest rate of any loan will essentially be the cost to take out that loan. For personal loans, the average interest rates range from 5% to 36% of the loan. To get a good personal loan, it is important to make sure the interest rates are within the average range or even lower.

The Length of the Loan

Repayment plans can vary quite a bit, the average amount of time that most personal loans last is about one to five years. The longer the loan, the more time the borrower has to pay it off, but that will usually also mean more interest to pay.

With this aspect of the loan, individualization is key. Longer loan terms may make the loan better for some, while for others a better loan would mean quicker repayment.

The Value

Another important part of the lending industry for borrowers, is making sure they get the full amount that they came in looking for. When looking for a good personal loan, it is important to know exactly how much money is needed and then find a lender who can match that amount.

The Repayment Plan

The repayment plan of a loan will include the minimum monthly payment, when the payment is due, and all the details of what happens if a payment cannot be made or is late.

This is another factor where individualization becomes key. For example, someone who misses payments often may want a repayment plan that has minimal (or no)  late fees, and a flexible loan lender.

What General Documents Are Needed?

There are a few documents that will be necessary during the application process. Here are a few identifying documents lenders will ask to see:

  • A government-issued photo ID (driver’s license, passport, etc.)
  • Documents proving residence (recent mail, leasing contracts, etc.)
  • Documents showing proof of income (bank statements, letters of income, etc.)

What Documents/Information will Determine a Good Personal Loan?

Once a lender has all of these documents in order, they will go ahead and perform a credit check—this could also mean requesting a credit report. With this documentation, lenders can then figure out the details of the loan. In the lending industry, the better a person’s credit, the better loan they will be able to get.

Before going to a lender, it may be helpful for a borrower to review their credit score/credit reports. Doing so will give borrowers an idea of what loan terms to expect from lenders. Lenders also offer pre-approvals and loan estimates.

Where Can a Good Personal Loan Be Found?

Arguably, the best place to find a good personal loan is a loan financial referral service. Also known as indirect lenders, like Max Cash®. These referral companies are not loan lenders themselves but work as a connection service for several loan lenders.

By using an indirect lender, the process of comparing to get the best personal loan (for an individual), becomes much easier and quicker. Additionally, having access to a variety of several kinds of lenders means competitive interest rates and a higher chance of eligibility.

Find out if you can qualify for a loan option today! 5 Max Cash is here to guide you through the process.

By Blake Halmerssen

Blake is a seasoned financial analyst. As the head financial writer for the Max Cash blog, he is committed to providing readers with financial literacy and advice.