
Sign up & start saving!
Get our weekly newsletter for the latest in money news, credit card offers + more ways to save
Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Updated
While not all lenders look at every single one of these factors, many consider at least one of them, especially income.
Your income is one of the most important factors in any loan application — even payday loans. Some states legally require lenders to consider your ability to pay when you take out a loan. Even in those that don’t, it’s standard practice for lenders to ask for proof of income when you apply.
How much you earn actually affects two parts of your application: your monthly pretax income and your debt-to-income ratio. Generally, you must have a high enough income to afford the monthly cost of the loan you apply for. But even if you meet your lender’s minimum income requirements, you could be disqualified if your recurring monthly bills add up to more than 43% of your income.
Some lenders require you to work a certain number of hours to qualify for a loan — typically around 30. Others might only offer funding to borrowers with full-time jobs. Generally, the more hours you work, the more likely you are to get approved for a personal loan.
Being your own boss has many benefits. But it can be difficult to qualify for a personal loan if you’re self-employed. Some lenders flat-out won’t work with self-employed borrowers.
Others like Best Egg have a difficult time evaluating your income, especially if you don’t have pay stubs. If you receive pay in an unconventional manner, it might take a little bit longer for lenders to process your application — especially if they rely on an algorithm. You also might have to submit additional documents, such as recent bank statements and tax returns.
How long you’ve been in the work force is another factor that can affect your application — as well as the types of jobs you’ve had in the past. Some might require you to be at your current job for at least a year or two. Others might only work with applicants who have worked in the same industry for a certain amount of time.
Often, these lenders will ask you to provide information about your work history in the application. For example, Earnest asks you to provide information about your employers over the last four years.
While it’s uncommon for lenders to list certain industries as ineligible for a personal loan, what you do for a living can affect your eligibility. That’s because some occupations have a higher rate of default than others. Investors lost the most money when funding loans to individuals from the following occupations, according to NSR Invest data on Prosper peer-to-peer loans:
Some lenders also count a job on the horizon in your favor when you apply for a loan. Typically, you need to sign the contract and have a start date before you can put it on your application. Others might require you to start within a certain timeframe. For example, SoFi requires you to have a start date within the next 90 days.
You might be able to get a personal loan if you’re unemployed, though it can be hard finding a lender willing to work with you. If you don’t have any form of income, you likely won’t be able to qualify anywhere. However, you could be eligible in some of the following circumstances:
While work and income are two important aspects lenders consider when you apply for a loan, they aren’t the only ones. Here are some other factors that could affect your application:
Surprising factors lenders take into account
Your job might have more of an impact on your personal loan application than you think. From your monthly income to your time in the workforce, what you do to support yourself plays a major role in how lenders view your application. You can learn more about how it all works by reading our guide to personal loans.
Reduce your debt by around 30% after fees — but only if you can stick with the program. Here’s how.
Don’t be fooled by false promises — here are red flags to watch out for and tips to find a legit company.
Wondering how to move your pets with you to Australia? Read through our guide to bringing your furry friends with you down under.
Compare options if you’re self-employed, a freelancer, a partner and more.
Here’s where to get financial help for yourself and your business if you’ve been affected by the storm in February 2021.
Is Mercari the best secondhand app to buy or sell your goods? See Mercari pros and cons, reviews and complaints and general FAQs to decide.
How states compare on employment, earnings, poverty, education, health and wellbeing.
The White House announced new changes to PPP loans, helping the smallest businesses and opening access to people with student loan defaults or nonfraudulent felony convictions.
Book a workation at one of these hotels and get Internet, coffee, private space and more.
President Biden said he supports offering $10,000 in forgiveness for federal loans, plus a few other options. Here’s what to expect.