Navigating the US personal loan system can be intimidating – credit scores, payback plans, and interest rates, all these seem overwhelming.

When you are a non-US citizen, this is significantly more complicated. If you have got the visa, are you qualified to obtain loans in the United States? What credit details must you provide? How much money do you need? Do you require the signature of a citizen? While asking for a loan, you are definitely wondering about all of these things.

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The following are 5 common requirements that most financial institutions may look at while evaluating your loan applications.

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  Credit history and score 

When a lender evaluates a loan application, the most crucial component is your credit score. Credit scores between 300 and 850 are decided by the factors:

• Payment history
• Outstanding debt amount 
• Credit history period

Many lenders demand to have a certain minimum credit score of roughly 600 to be considered, however, some lenders may lend to applicants regardless of their credit history.

• Income

Borrowers must meet certain income conditions to ensure that they can repay any new loan. Lenders have different minimum income criteria.

Monthly bank statements, recent tax returns, pay stubs, and also a letter from employers are examples of acceptable proof of income. Self-employed candidates can supply bank deposits or tax returns.

• Debt-to-income ratio

The DTI (debt-to-income ratio) is a number that shows the percentage of the gross monthly income of borrowers that goes toward debt service each month. Lenders may use DTI to estimate a potential borrower’s ability to pay off new and existing debt. As a result, a DTI of below 36% is preferable, while some lenders may approve any highly qualified applicant who has a ratio of up to 50%.

• Collateral

For a certain secured personal loan, you will have to put up valuable items as collateral. Collateral is often tied to the purpose of your loan in the case of home or vehicle loans. 

Other valuable assets, such as investment accounts, real estate, cash accounts, and other collectibles such as precious metals can be used to get secured personal loans.

• Origination fee

Many lenders demand borrowers pay origination fees for a personal loan to cover the processing costs of applications, doing credit checks and also closing, even if it is not part of your qualification process. 

Depending on parameters e.g. the loan size and credit score, these costs often range from 1 to 8% of the entire loan amount. A few lenders take cash at closing for origination costs, while a few others finance them or deduct them from the final loan amount delivered at closing.