Step 4: Gather the Documents Lenders Ask For

The checklist

Most personal loan applications ask for documents in four groups. Not every lender wants every item: some confirm income by linking to your bank account, and some check identity against credit bureau records. Gather the whole set anyway, as files you can upload, so a request for one more paper does not stall the loan.

What lenders verify and why

Two separate checks happen. The first is identity. Under the Customer Identification Program rule, a bank must obtain, at a minimum, your name, date of birth, address and an identification number before it opens an account for you. For a U.S. person, that number is a taxpayer identification number, such as a Social Security number. A non-U.S. person may give one or more of these: a taxpayer identification number, such as an ITIN, a passport number and country, an alien identification card number, or the number of another government-issued document showing nationality or residence and bearing a photograph or similar safeguard.

The bank then has to confirm the information. It may look at documents, such as an unexpired government-issued photo ID like a driver's license or passport, or use other methods: comparing what you gave with credit bureau or public records, contacting you, or checking references with other financial institutions. That is why a lender may approve you without asking for a scan of your license, or ask for it only when a record does not match.

The second check is your ability to repay. Here the lender reads your income documents next to the debts on your credit report. If your income is irregular, expect the lender to look at a longer stretch of tax returns or statements. The CIP rule covers banks; credit unions and non-bank lenders run their own identity checks, and they tend to ask for the same core items.

How to send documents safely

A loan file holds everything a thief needs: your ID, your Social Security number and your bank details. Ordinary email is a poor way to move it. Messages sit in inboxes on both ends, can be forwarded, and can go to a lookalike address without your noticing.

• Upload through the lender's own portal, reached by typing the address you already verified, not through a link in a message.
• Do not answer a call, email or text that asks for your personal information. Contact the lender yourself at a number or address you looked up.
• Ask why a number is needed before you give your Social Security number, and how it will be protected.
• Black out what is not needed, such as account numbers on a statement used only to prove your address, if the lender agrees.
• Never send originals. Send copies or scans and keep the originals somewhere safe.

How long this step takes and what slows it down

If your papers are already scanned, an online application moves quickly. What adds days is a request for one more document after you apply. The usual causes are easy to head off.

• A name mismatch: a maiden name on the ID and a married name on the application, or a missing middle initial.
• An old address on your ID or credit file that differs from the one you entered.
• An expired ID. Renew it before you apply if it runs out soon.
• Income the lender cannot see: cash income or a new job without a pay stub yet; see starting a new job.
• A frozen credit file that blocks the identity check; lift the freeze first.

Keep copies of everything

Make a folder, paper or digital, for this loan. Banks must keep your identifying information for five years after the account is closed; keeping your own record at least that long is a sensible match.

1. 1 Save each document you sent, with the date and the channel you used.
2. 2 Save the offer and the Truth in Lending disclosure, and later the signed agreement, as covered in signing and funding.
3. 3 Save messages about fees, rates or conditions, in case you need to file a complaint.
4. 4 Shred paper copies you no longer need, or black out the account numbers first.

Questions people ask