Qualifications For a Cash Loan Cash loans come in all sizes and shapes, so it should come as no surprise that some cash loans are easier to secure than others. In general, the smaller the size of the cash loan and the less risk it poses to the lender, the fewer qualifications that you will have to meet. However, there are number of basic requirements such as personal ID confirmation, proof of income, and credit rating check that you must satisfy in almost all cases.
Personal ID
First and perhaps most important, you must be able to demonstrate to the lender that you are who you claim to be by providing personal identification. ID requirements are different from lender to lender. However, your social security number is almost always included because it is used to check your credit rating, while picture ID such as a driver’s license or passport is also useful for confirming your identity.
Evidence of Income
Other than providing personal identification proving that you are who you claim to be, you will also need to demonstrate that you can afford to take on the loan. First, you must be able to demonstrate that you have enough income coming in. Second, you need to demonstrate that taking on the loan will not exceed you ability to satisfy your short-term debt obligations using that income.
If you are an employee at a business or non-profit organization, you can use documents from your employer such as pay-stubs to demonstrate that you have income coming in. In contrast, if you are self-employed, then you will need to provide financial statements for your business. Supplementary documents such as bank statements and recent tax returns are useful and possibly required, particularly if you are self-employed rather than an employee working for an employer.
Furthermore, you might also need to provide documentation for any preexisting debt and debt burden. Providing such documentation gives lenders enough information to decide if you can handle the matter of repaying the loan.
Credit Rating
Depending on the loan and the lender offering the loan, you might also find out that having a good credit rating is vital to securing the loan. Credit rating is a measurement of your creditworthiness, calculated using a combination of factors that include your past payment histories, your current outstanding credit, the nature of those credit, and so on. A good credit rating means that you can be relied upon to repay your debts on time and with minimal risk of default, whereas a bad credit rating means the opposite. In general, any loan other than those that take on all customers will check your credit rating before making a decision on your application.
As for finding out about your current credit rating, you can simply request a copy from one of the credit bureaus. For example, you can get a copy from either Experian, Equifax, or TransUnion. Unless you need immediate access, you can fill out a form to request a free copy of your credit rating report once a year. Keep in mind that if you have no credit, then you have no credit rating.
Written by Ted Kingman, a freelance financial writer. His articles mainly appear on personal finance blogs. Read the SaveMyBacon Blog to learn more about short term loans.