Are you currently seeking a loan? Whether you’re searching for a short-term loan or a longer term financing option, most loan providers will need to see a selection of documentation in order to approve you for the process.
Rules and regulations surrounding money lending have tightened in recent years, as a weakened economy forces lenders to be more cautious about approving loans. This means that trustworthy lenders now demand stronger evidence that loans can be repaid in order to offer their services to would-be borrowers.
Demonstrating ‘repayability’ doesn’t just require consumers to submit evidence of their income and employment. It may also require them to provide evidence regarding their identity. This too can involve sourcing paperwork and submitting documentation in order to proceed with the loan approval process. If you are seeking a quick loan, it’s a good idea to be aware of the requirements before you begin the process, so you can submit all of the required documents speedily.
Every lender is different, and will have different requirements. The level of documentation required will likely differ depending on the type of loan sought (short term loans may have less stringent checks, for example). To find out precisely what documentation you will need, be sure to speak directly with the provider before proceeding with the process to avoid disappointment.
If a lender requires very little documentation, it is wise to proceed with caution. Borrowers should only take on loans they can reasonably service. Without appropriate checks, you may be offered a loan you cannot shoulder, which could lead to severe financial difficulties in the future.
With that noted, here are some of the key documents you may need to submit while completing a loan application:
- Your ID
Whether it’s your birth certificate, your passport or your driving license, almost all lenders will require proof of identity in order to approve your loan. Proof of identity will also prove your age. This is important as it is illegal for loan providers to lend to individuals under the age of 18.
- Proof of employment
Almost all lenders will require you to be in a role which generates enough income to allow you to meet repayments. Any scrupulous lender will ask you to submit this type of evidence. Documentation which proves employment may include a reference from your employer, a recent payslip or a bank slip. A recent article from Wonga.za offers more information about this requirement.
- A credit report
Those seeking a larger or longer-term loan are likely to be asked to undergo a credit check. This will usually be something your prospective provider undertakes themselves, or you may need to submit a credit report undertaken by a third party such as Experian. These reports give loan companies an overview of your credit history, revealing how much and how frequently you borrow. Such reports will also reveal your repayment history, indicating whether or not you have paid on time in the past. Typically your prospective lender will arrange for these reports to be carried out, but you can check your credit history yourself beforehand with free reports offered by many services.