Have you ever been in a situation where you wanted to purchase something, but you didn’t have enough money? You can always borrow money from relatives or friends In such instances. However, there is no guarantee that they will lend you money.
Loans come in handy in such situations. This guide will walk you through the importance of loans and the conditions you need to meet to obtain loans and sort out any financial emergencies that come your way.
How do personal loans work?
Your loan application will start once you have submitted your loan application to your most preferred lender.
If your loan request is approved, the lender will wire the money directly to your bank account.
Depending on your financier, it takes between 24 hours and a few weeks to transfer the funds and monthly loan repayments start as soon as the loan is disbursed.
The majority of personal loans have a defined interest rate. This means that the monthly payments remain constant over the entire time.
Please note that personal loans are usually unsecured, meaning you’ll obtain your loan, even without collateral.
What are the conditions of obtaining one?
1. Credit score and history
Your credit score is among the essential factors a loan company must consider when assessing your loan request.
Credit scores fall within the range of 300-850, depending on factors such as the time frame of the credit history, payment history, and amount of uncleared loans.
To qualify for a loan, most loan companies require an applicant to have an average credit score of 600. However, you’ll still find some lenders giving out loans to applicants who don’t have a credit history.
Loan companies require you to have a steady income to ascertain that you can repay the loan. However, the income requirements will vary from lender to lender.
Proof of income can be in the form of pay stubs, monthly bank statements, signed letters from employers, and current tax returns.
If you are self-employed, proof of income may include bank deposits or tax returns.
3. Debt-to-income ratio
Debt-to-income (DTI) ratio is expressed as a percentage, which denotes the chunk of your monthly income that goes into servicing any debts you have.
Loan companies use the debt-to-income ratio to foretell if their potential customer can service new and existing debts.
That said, an ideal DTI should fall below 36%. However, some lenders can give you a loan even with a DTI as high as 50%.
4. Origination fee
Even though you don’t need to qualify for a loan, some loan companies mandate that applicants pay origination fees. These fees are meant to cover the cost of doing credit checks, closing, and application processing.
These charges are typically between 1-8% of the entire loan amount and are usually dependent on factors such as the loan amount and your credit score.
Some loan companies deduct origination charges at closing. Other lenders finance origination fees as part of the loan or deduct them from the loan disbursed at closing.
What documents do I need to qualify for loans?
1. Loan application form
To start the lending process, lenders require prospective borrowers to fill and submit this formal document.
The particular requirements may vary since every lender has their application. Generally, you’ll have to provide basic personal details, the amount you want to borrow, and the loan purpose.
2. Proof of identity
Many lenders need applicants to submit at least two government-issued identification forms to prove their United States citizenship and their age which must be 18 years and above.
That said, the valid government-issued identification forms include:
- Birth certificate
- Military ID
- Driver’s license
- Other state-issued ID
- Certificate of citizenship
3. Employer and income verification
As a borrower, you have to prove to the lender that you can pay back your new loan and current debts.
Lenders customarily require potential borrowers to demonstrate their current earnings and employment history as part of the application steps.
Some of the income verification forms for traditional employment are:
- Bank statements
- W-2s and 1099s
- Employer contact information
Self-employed prospective borrowers must rely on income tax returns, bank statements, and 1099 forms.
4. Proof of address
Most lenders want to know your living situation besides confirming your employment.
You may have to provide proof of your address, like your rental agreements or copy of your lease, a recent utility bill, proof of home or voter registration card, auto or renters’ insurance that lists your address.
How to apply for loans via Viva Payday Loans
Step 1: Visit Viva Payday loans
The initial step is to go to the Viva Payday Loans site. In the upper right corner of the page, press the Apply Now button to start the application.
Step 2: Complete the application form
You’ll have to fill an online form as part of the application process—give details like income statistics, monthly costs, and your name.
Step 3: Receive confirmation (or rejection)
Upon completing and submitting the form, wait for feedback which takes only two minutes. You’ll also get an email notification if your request is declined.
Step 4: Receive your loan
You have to sign a loan agreement if your request is granted. Ensure you thoroughly go through the contract’s terms and conditions before signing. The lender will transfer the funds into your account within 24 hours.
Loan conditions aren’t cumbersome
Personal loans are an excellent alternative since you can use them to sort out nearly any financial emergency. However, keep in mind that just because you can use the loan for virtually anything doesn’t imply that you should borrow.