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If you’re applying for a loan and are wondering what documents you would need, this is one of the most frequently asked questions about loans. This ultimate guide has got you covered, as we look at everything you need to know, like proof of identity, 3 months’ worth of salary slips, and a letter of employment.
Answering One of the Most Frequently Asked Questions About Loans – What Documents Will You Need When Borrowing?
- Salary Slips
You will need to provide the bank or credit union with 3 months’ worth of salary slips. This will tell them how much your income is, and whether you have any commitments you did not state.
If you are borrowing from a bank that you already have an account with, then you might not need the salary slips. They would already have all of your details. But whether you will have to do this depends on the bank you are a part of and where you live.
You usually are asked for 3 months’ worth of salary slips. However, this can sometimes be longer depending on your circumstances, if you are a freelancer – they would want to check whether you consistently had income coming in.
You can also add a baby bonus tax into your monthly slips, and apply for a baby bonus loan.
- Letter of Employment
Along with the salary slips, you will also need to provide a letter of employment. It will need to be signed by your manager (or any other superior) to show that you in fact have a stable job and have been a part of the company for a while.
The employment letter will need to include your job role, and if you are a permanent staff member or if you are just on a contract basis.
If you are a full-time member of one company and a part-time member of another, it is recommended that you include a letter of employment from the part-time job as well.
- Proof of Identity
Of course, you need to prove to the bank that you are who you say you are. You can do this by providing your national ID or passport, and any proof of address.
To prove your address, any bill with your name would work fine.
- Credit History
There is no way a bank would lend to you if you have bad credit. You will need to improve your credit score by paying all the payments that are due off.
One of the frequently asked questions about loans is the credit score you will need. The answer to this depends on where you live. But if it’s not that great but still not bad, your loan application might be accepted. Just remember that you would have to pay a higher interest rate.
Final Thoughts
There are quite a few documents that you will need when applying for a personal loan. I have outlined what they are, as this is one of the frequently asked questions about loans.
Hopefully, you found all of the points that were run through useful.
