Getting a loan with bad credit is already complicated as it is. Financial institutes and investors are hesitant when it comes to giving loans to people with bad credit. The reason for this is the risk of not getting their money back on time or at all from an irresponsible spender. However, many companies and banks still provide financing options for people with bad credit.
When applying for a bad credit loan, you will likely come across a list of necessary documents that you will need to get your financing processing going. What are these documents, and which ones are a must-have while taking out a bad credit loan? Let’s find out.
Documents Required to Get a Bad Credit Loan
Here is a list of the essential documents you will need to carry to apply for a bad credit loan:
ID documents are the most important documents required when applying for a loan. No lender will give you a loan without confirming your identity, whether you’re a legal resident of the state/country, above 18, and a permanent resident of the state. To confirm these, the lender will require at least two forms of ID. These could be anything from your driver’s license, passport, state-issued ID, or birth certificate.
2. Proof of Address
Proof of address is required so that the lender can remain in contact with you and correspond through the mail. All your loan documents, late notices, reminders, monthly statements, and other forms of correspondence will be mailed to your address. You can use your utility bills, house documents, or state-issued ID to confirm your address.
3. Proof of Income
Proof of income is also a vital part of your loan application. A lender would like to confirm that you have a steady stream of income to be able to pay back your bad credit loan. If you’re working a full-time job, you can show your pay stubs, monthly statements, and tax returns.
If you’re not a full-time employee, your lender can ask for further documents such as your business’ proof of income and some evidence of a transaction.
In case you’re unemployed, then social programs such as Social Security income can be shown as proof of income.
4. Other Financial Documents
Lenders can have different requirements regarding your financial documents. Some might want a list of all your assets, including your home, car, and other properties. They may require your financial statements to review your history of paying on these assets.
They may also require your bank statements to check your savings, spending, and other patterns.
These are all the required documents you will need while pursuing a personal loan with bad credit. Depending on your credit score and history, your lender might want some additional documents which should be discussed prior to your application.