To take out a loan you need four things: a government-issued photo ID and Social Security number, proof that you earn enough to repay, bank statements showing where your money sits, and a credit history the lender is willing to accept. Mortgages add a down payment, an appraisal, title work, and homeowners insurance; auto loans add proof of insurance and a lien on the car; personal loans from online lenders sometimes need little more than an ID, a bank login, and a credit pull. What follows is what each category actually looks like when a lender asks for it.
Identification and Social Security Number
Every lender asks for a government-issued photo ID — a driver’s license, state ID card, or U.S. passport. The USA PATRIOT Act requires financial institutions to verify the identity of anyone opening an account or taking on a new credit obligation and to keep records of the identifying information they collect.1FinCEN. USA PATRIOT Act
You also provide your Social Security number so the lender can pull your credit report and handle tax reporting on interest you pay. On a mortgage, your SSN is one of six pieces of information that triggers the lender’s legal obligation to send you a Loan Estimate.2Consumer Financial Protection Bureau. What Information Do I Have to Provide a Lender in Order to Receive a Loan Estimate? A recent utility bill, lease, or similar document is usually requested to confirm your current address.
Non-citizens need additional proof of residency status. Lawful permanent residents qualify for most loan products with evidence of permanent residency from U.S. Citizenship and Immigration Services; a Social Security card alone is not enough to prove immigration or work status. As of May 2025, FHA-insured loans are no longer available to non-permanent resident aliens, though permanent residents remain eligible on the same terms as U.S. citizens.3U.S. Department of Housing and Urban Development. Revisions to Residency Requirements – Title I Letter 490
One thing not to do: lie on the application. Providing false information on a loan application is federal bank fraud, with penalties up to 30 years in prison and fines up to $1 million.4Office of the Law Revision Counsel. 18 USC 1344 – Bank Fraud Lenders cross-check documents against each other and against third-party databases, so inflated income or hidden debts are more likely to sink an application than save it.
Proof of Income and Employment
Lenders need to see steady income large enough to cover a new payment on top of your existing obligations. If you’re a salaried or hourly employee, that generally means:
- At least 30 consecutive days of pay stubs showing year-to-date earnings.
- W-2 forms from the previous two tax years.
These requirements come straight from federal mortgage lending guidelines, and most other lenders follow a similar framework.5U.S. Department of Housing and Urban Development. Mortgagee Letter 2019-01
Self-employed borrowers hand over more paperwork: two years of complete federal tax returns plus any 1099 forms documenting the income. Lenders average your income across those two years, so one strong year won’t carry the weight of two consistent ones.5U.S. Department of Housing and Urban Development. Mortgagee Letter 2019-01
A two-year employment history is the standard baseline, with some flexibility if you’ve changed jobs recently within the same field or can show equivalent experience.5U.S. Department of Housing and Urban Development. Mortgagee Letter 2019-01 Lenders usually verify current employment by calling your employer’s HR department directly, so make sure the contact information you provide is current.
Bank Statements and Assets
Lenders need to see where your money sits and where it came from. For a home purchase, Fannie Mae’s guidelines call for two consecutive monthly bank statements — 60 days of activity — covering checking, savings, and money market accounts.6Fannie Mae. Requirements for Certain Assets in DU Refinances typically require one month. Personal loan lenders may ask for fewer months or accept a digital bank login instead.
Underwriters look for two things in those statements. First, enough liquid reserves to cover your down payment and closing costs, or on a personal loan a few months of cushion. Second, no large unexplained deposits that could signal undisclosed debt or borrowed money dressed up as savings. If you sold a car, received an insurance payout, or had any other unusual influx during the statement period, be ready to document the source with a paper trail.
Investment accounts, 401(k) balances, and brokerage statements aren’t usually required but help a borderline application by showing reserves beyond your checking account.
Gift Funds for a Down Payment
If a family member is helping with your down payment, you need a signed gift letter from the donor confirming the money is a gift and not a loan.7Fannie Mae. Gifts of Equity Depending on the loan type and how the funds move, the donor may also need to provide bank statements documenting where the money came from. On conventional loans, if the donor wires funds directly to the escrow agent, donor bank statements are sometimes waived. FHA and VA loans generally require them regardless of how the transfer happens.
Credit Score and Debt-to-Income Ratio
Your credit score and existing debt load are the two numbers that drive the decision. You don’t submit either one the way you submit pay stubs — the lender pulls your credit report and calculates your debt ratio from the documents you’ve already provided.
Credit scores run from 300 to 850, and higher scores unlock lower interest rates. Most conventional mortgages require at least a 620. FHA loans go lower: a 580 qualifies you for a 3.5% down payment, and scores between 500 and 579 require 10% down. Scores above 740 generally get the best rates across the board. Personal loans run a wider range; some online lenders approve scores in the 500s, though at a steep interest rate.
Debt-to-income ratio compares your total monthly debt payments, including the proposed new one, against your gross monthly income. Under the qualified mortgage rules, the general ceiling is 43%.8Bureau of Consumer Financial Protection. Qualified Mortgage Definition Under the Truth in Lending Act (Regulation Z): General QM Loan Definition Some programs stretch to 50%, but borrowers in that range pay noticeably higher rates. Federal Reserve research found a premium of roughly 27 basis points for borrowers between 44% and 49% compared to those at or below 43%.9Federal Reserve System. The Effects of the Ability-to-Repay / Qualified Mortgage Rule on Mortgage Lending
When you formally apply, the lender pulls a hard inquiry, which can temporarily lower your score.10Consumer Financial Protection Bureau. What Is a Credit Inquiry? If you’re comparing offers, submit your applications within a 14- to 45-day window. Most credit scoring models treat clustered mortgage or auto loan inquiries as a single inquiry, so shopping around doesn’t crater your score as long as you do it inside that window.
If your credit or income falls short, a co-signer with stronger finances can improve approval odds. The co-signer provides their own ID, proof of income, and consent to a credit check, and lenders evaluate their finances as thoroughly as yours because they’ll be equally responsible for the debt if you stop paying.
Down Payment and Collateral for Secured Loans
Personal loans and most credit cards are unsecured — no collateral, no down payment. Mortgages and auto loans are secured, which adds documentation and cost.
On a mortgage, a licensed appraiser determines the property’s fair market value, and the lender uses that to calculate your loan-to-value ratio. Down payment minimums vary: conventional loans start at 3% for qualifying first-time buyers, FHA loans require 3.5% with a credit score of 580 or above, and VA loans for eligible veterans often require nothing down. If the property appraises below the purchase price, you’ll need to cover the gap in cash, renegotiate, or walk away. A title search confirms the seller actually owns the property free of liens, judgments, or other claims. You’ll also need proof of homeowners insurance before closing, with coverage at least equal to the replacement cost of the home or the unpaid loan balance.
On an auto loan, the lender holds a lien on the car’s title until the loan is paid off. You’ll need proof of auto insurance meeting the lender’s minimum coverage before you drive the vehicle off the lot. The car itself serves as the appraisal; lenders use standard valuation guides to confirm it’s worth enough to back the loan.
Fees You’ll Pay Along the Way
Several fees hit before or at closing, and some stay nonrefundable even if your application is denied.
- Application fee, covering the credit report pull and initial processing. Usually nonrefundable, though some lenders waive it.
- Origination fee, the lender’s charge for underwriting and funding. On mortgages this typically runs 0.5% to 1% of the loan amount; on personal loans it often runs 1% to 10% depending on the lender and your credit profile.
- Appraisal fee on most mortgage loans. Costs vary by location and property type.
- Title search and title insurance, which confirm clear ownership and protect against title defects. Costs vary by location.
For mortgages, total closing costs — the items above plus prepaid taxes, homeowners insurance, and recording fees — typically run 2% to 5% of the purchase price. The Loan Estimate your lender must deliver within three business days of your application is your first reliable guide to actual costs, and the Closing Disclosure you receive before signing locks those numbers down.11Consumer Financial Protection Bureau. TILA-RESPA Integrated Disclosure FAQs
Your Rights as a Borrower
Federal law gives you protections worth knowing before you sign. The Truth in Lending Act requires lenders to clearly disclose the total cost of your loan, including the annual percentage rate, all finance charges, and the total you’ll pay over the life of the loan.12eCFR. 12 CFR Part 1026 – Truth in Lending (Regulation Z) Those disclosures exist so you can compare offers on equal footing. Vague fees or charges buried in fine print are a warning sign.
On mortgage loans, two timing rules protect you. The lender must deliver a Loan Estimate within three business days of receiving your application, and you must receive a Closing Disclosure at least three business days before closing.11Consumer Financial Protection Bureau. TILA-RESPA Integrated Disclosure FAQs Compare the two line by line.
If your application is denied, the lender must send a written notice with specific reasons. Vague language like “you didn’t meet our internal standards” is not enough; the law requires concrete explanations, and the lender must identify the principal reasons for the denial, up to four.13Consumer Financial Protection Bureau. Regulation B – 1002.9 Notifications You also have the right to a free copy of the credit report used in the decision.
If you spot errors on your credit report — an account that isn’t yours, a wrong balance, a late payment you made on time — you can dispute the inaccuracy directly with the credit reporting agency, which must investigate within 30 days.14Office of the Law Revision Counsel. 15 USC 1681i – Procedure in Case of Disputed Accuracy Cleaning up errors before you apply can meaningfully improve both your approval odds and the rate you’re offered.