When reviewing your loan application, lenders check a range of factors to make sure you aren’t too risky of a borrower, and a major part of the assessment is your employment. Most lenders require that you be employed, meet a minimum income requirement and have been employed for a certain amount of time.
If you have just started a new job but find yourself in need of a loan, you still have some financing options available to you. Read our guide below to find out more.
What are the minimum employment requirements set by lenders?
Every lender has its own minimum income requirement. The table below contains some of our top options, but when you’re looking for a personal loan, don’t be afraid to spend time doing research so you can find the best loan for your needs.
How can I get approved for a personal loan as a new employee?
If you’ve just started or are about to start a new job, try to keep these factors in mind when filling out your loan application.
Apply for a lower amount. Lenders may be more hesitant to approve you if you haven’t been at your job long. Calculate how much you need and borrow the minimum amount.
Offer security. A secured loan is less risky for a lender and you may be more likely to be approved. Keep in mind you may lose your collateral if you can’t make your repayments.
Wait to apply. Even a few months of work could give you a better chance of being approved. Wait until your probationary period is up — usually three to six months — to show you have a steady source of income.
Meet the other minimum requirements. Lenders have a range of basic eligibility requirements you need to meet that extend beyond employment.
Let your employer know. Lenders may want to confirm your employment with your current employer, so giving them a heads-up before this happens can help speed up the process.
Provide as much supporting documentation as possible. If you have any assets or savings, you should provide that information with your application as this increases the lender’s trust that you can repay your loan.
Talk directly with the lender. Contacting your lender before you apply can help you understand the specific criteria you’ll need to meet if you want to have a good chance at approval.
What else do lenders consider?
Lenders look at a variety of factors, which can include any of the following:
Your age. Lenders don’t base credit decisions on your age, but you usually need to be at least 18 years old, or the age of majority in your province or territory, in order to be eligible to apply.
Employment type. You may need to be employed full-time and you may need to earn a certain amount of income to be eligible. Some lenders don’t accept part-time or freelance work as sufficient employment.
Debt-to-income ratio. Lenders like to see that you have a steady stream of cash coming in. A general rule of thumb is that your debt should take up no more than 43% of your income, although lower is better.
Credit history. Banks and credit unions will normally require that you have good credit. However, there are bad credit personal loans available.
Residence. You will usually need to be a Canadian citizen or a permanent resident to be eligible, as well as a valid Canadian address.
Once you’ve compared your loan options, head to the lender’s website to apply for the loan via a secure application page. Before you apply, make sure you meet the eligibility requirements and have the necessary documents on hand to streamline the application process.
You will usually need to provide the following:
Your personal details. This includes your full name, date of birth, address, email address, phone number and Social Insurance Number (SIN).
Your employment details. You may need to provide your employer’s name and contact information.
Your income details. You may need to submit pay stubs or bank statements to provide proof of your income.
Your banking details. You will need to provide the name of your bank, the branch address and transit number and your own personal bank account number.
Getting a personal loan is tough, and the process is only made more difficult when you need a loan but have only just started a new job. While not all lenders accept those who have been employed for less than six months, there are plenty of online lenders out there that can finance your loan.
You should first identify the reason why you think you’ve been denied for the personal loan. Check your credit report, research other lenders and then apply for another personal loan when you think you’ll be approved.
Try not to apply for too many loan products in the same time frame as this can negatively affect your credit score and raise red flags with lenders if they see you’ve been applying for too many loans.
With a short term loan, also known as a payday loan, you will face excruciatingly high interest rates and short repayment terms.
Having an asset as security could lower the interest rate you’re offered because the lender is taking on less risk. Keep in mind if you fail to repay the loan your asset will no longer be your property.
Kyle Morgan is a producer for finder.com who has worked for the USA Today network and Relix magazine, among other publications. He can be found writing about everything from the latest car loan stats to tips on saving money when traveling overseas. He lives in Asbury Park, where he loves exploring new places and sipping on hoppy beer. Oh, and he doesn't discriminate against buffalo wings — grilled or fried are just fine.
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