Understand requirements and how they affect approval
Lenders typically consider several factors when evaluating your loan application, including:
Creditworthiness
Your creditworthiness is a key factor in determining your eligibility for a personal loan. Stronger credit can generally lead to a lower interest rate.
You’re allowed to request one free credit report from each of the major credit bureaus every 12 months. Consider regularly checking your credit report so you know where you stand and can address any issues that might hurt your chances of approval.
Debt-to-income ratio
Lenders prefer borrowers with a lower debt-to-income (DTI) ratio – the percentage of your gross monthly income (before taxes) that goes toward debt payments. A lower DTI can indicate to lenders that you have a good balance between debt and income and can manage your loan payments responsibly.
Age
Personal loans typically come with age requirements. For example, Citi’s personal loans require an applicant to be 18 years of age and older.
Income
Lenders also consider your income and employment status. Stable and sufficient income may reassure lenders you could repay the loan. They may also have minimum income requirements, and, if you’re self-employed, you might need to provide additional documentation to verify your income.
Fill out the application
Filling out a personal loan application is generally a straightforward process, and many lenders (including Citi) offer online applications. Here’s what you typically need:
- Proof of identity: Government-issued ID like a driver's license or passport.
- Proof of address: Utility bills, lease agreements or other documents showing your current address.
- Proof of income and employment status: Recent pay stubs, tax returns and/or bank statements.
What happens if you're approved
It depends on the lender, for example, when you fill out an application for a Citi personal loan, you’ll receive a response in under 60 seconds. If your application is approved, you typically receive the loan funds in a lump sum via direct deposit or a check.
Then, the repayment process begins – you’ll make monthly payments according to the loan terms. Because personal loans typically have a fixed rate, the monthly payment will usually be the same for the life of the loan. It's important to make your payments on time to avoid penalties and potential damage to your creditworthiness.
Citi offers personal loans to both existing Citi customers and new Citi customers that meet specific eligibility criteria, including an established credit and income history along with additional factors determined by Citi. If you think you could benefit from a Citi Personal Loan, apply online today.
This article is for general educational purposes. It is not intended to provide financial or tax advice. It also is not intended to describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products. Please consult your tax advisor with any tax questions. Citi is not a tax advisor.
