You can get a personal loan for almost anything, such as consolidating debt, improving your home or making a large purchase. The short list of things you cannot use a personal loan for includes illegal activities, gambling, investments and, sometimes, post-secondary education expenses.
No, you do not have to prove what you use a personal loan for, and personal loans can be used for just about anything. The lender’s responsibility is to ensure that you can pay the loan back, so you will have to provide information such as proof of income, your employment status and your monthly expenses. Lenders may ask for the purpose of your loan, but this is to help them assess what type of loan you’re eligible for, along with the loan amount and the terms of the loan, and you won’t have to actually prove what you end up using the money for.… read full answer
It is never a good idea to lie about what you use a loan for. Lying about the purpose of your loan can have legal consequences and affect your approval odds for any future loans. On top of that, there’s really no need to lie because personal loans can be used for just about anything that is legal.
If you think a personal loan is right for you, you can compare lenders on WalletHub to decide which personal loan offer best fits your needs. Then, you can pre-qualify with multiple lenders at once using our free pre-qualification tool.
Debt consolidation: Debt consolidation is one of the most common reasons why people get personal loans. Paying off a single loan with a lower APR is easier to manage than multiple balances with different APRs.
Home improvements: If you don’t have the money upfront, a personal loan is a great way to manage the expense of a renovation or other home improvements.
Medical costs: Medical emergencies and hospital bills can be quite expensive. Personal loans with quick approval and funding are an option for people faced with unexpected medical expenses.
Emergency expenses: Emergency expenses can be anything that pops up unexpectedly, from car troubles to an emergency surgery for your pet. Borrowers may be able to get a personal loan as soon as the same day they apply to cover emergency expenses.
Large purchases: Large purchases can put a dent in your finances when paid up front, or you simply may not have enough to pay up front. Personal loans enable you to pay off pretty much any significant expense over time.
Weddings: Weddings can be expensive, and taking out a personal loan is one way to cover all the costs. But be careful to weigh all the pros and cons of getting a loan for a wedding because starting a marriage in debt might not be the best idea.
Vacations: Vacations are a luxury, so it is not wise to pay for a vacation with money you don’t have saved. However, it is an option and a lot of people do it.
You can be disqualified from getting a personal loan if you do not meet the lender’s credit score requirement. Not having enough income to afford the loan, having too much existing debt, not being at least 18 years old and not living in the U.S. can also disqualify you from getting a personal loan. You can find more details below.… read full answer
Here’s What Disqualifies You from Getting a Personal Loan:
You don’t meet the lender’s credit score requirement
You’ll typically need a credit score of 580+ to qualify for a personal loan from a reputable lender. To get a loan with a low APR and no origination fee, though, you’ll need to have a higher credit score.
You don’t have enough income to afford the loan
You’ll need to have an annual income of at least $10,500 to get a personal loan, in most cases. To confirm you have enough income, the lender may request documents such as W-2 forms, bank statements or pay stubs.
You have too much debt already
Having a lot of debt makes you look risky to lend to, which will deter lenders and decrease your chances of getting approved for a personal loan.
You have missing or incorrect information on your application
Missing or incorrect information on a personal loan application can keep you from getting approved. You need to go through your application thoroughly to make sure all of your information is correct before you submit it.
You want to use the money for something the lender prohibits
Some lenders prohibit you from using a personal loan for certain things. Examples of prohibited uses include illegal activities, buying stocks or bonds and, sometimes, secondary education expenses.
You are not at least 18 years old
Legally, a lender cannot approve a minor for a loan. You will need to be at least 18 years old, or the legal age to accept a loan in your state, to qualify.
You don’t live in the U.S.
Many lenders will require U.S. citizenship or permanent residency to grant you a loan. You also may need to have a Social Security number or an Individual Taxpayer Identification number to apply. Some lenders may let you apply with a visa or passport, though.
You can read more about the general requirements to get a personal loan here on WalletHub. If you think you can meet the requirements to get a personal loan, you can estimate your approval odds using our free pre-qualification tool. Keep in mind that even if you pre-qualify for a personal loan, you may not get approved.
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