How to Apply for a Personal Loan

A personal loan allows you to pay for just about anything. That includes unexpected emergencies, debt consolidation, a dream vacation, or a business startup. 

At Greater Texas Credit Union, we make sure you get the most favorable loan terms – including low fees and low interest! Read below for more tips on what to expect when you apply for a personal loan.

Know Your Credit History

Your credit score and history are key factors in determining your eligibility for a personal loan. Generally, the higher the credit score, the more likely you are to receive the most favorable interest rate. The average score falls into the following categories:

  • 690-719: Good credit
  • 630-689: Fair or Average credit

If you’re looking to rebuild your credit or don’t have much history at all, take steps to build your credit before you apply. On-time payments and the amount of credit you use relative to credit limits have the biggest impact on your score. 

Don’t forget to fix any errors that might be dragging down your score. You can request your free credit report and dispute wrongly reported missed payments or any other inaccuracies it may contain. 

Personal Loan Types

At Greater Texas Credit Union, we offer unsecured loans (loans without collateral) at great rates to our members. Some of our benefits include no origination fees or prepayment penalties so you won’t have to worry if you pay your loan off early. If you’re sticking to a tight budget, our fixed rates, terms, and monthly payments can keep you on track because you’ll already know the amount with no surprises!

We encourage the borrowers who want the most flexibility in spending to apply for this type of personal loan. We guarantee amounts up to $10,000 based on your personal financial history and interest rates as low as 7.49% annual percentage rate (APR)*.

In addition to the above, Greater Texas Credit Union also offers additional loans that may serve your needs.

What to Expect When Applying for a Personal Loan

To apply for a personal loan, you will need to provide basic personal information as well as proof of employment and income. Employment and income information are used to prove you have stable funds to make your loan payments.

Expect to be asked for documentation such as your most recent year-to-date pay stub, previous W-2s, personal tax returns, and/or a current personal financial statement.

Fill out our online application or apply at your local branch. Our team reviews applications in-house and will reach out to you once we have completed the approval decision. We can finalize your loan documents via secure email or in person.

Cover Your Current Debt

Your debt-to-income ratio (DTI) is a ratio that compares your gross monthly income to the monthly payments you make toward your outstanding debt. This percentage is just as important as your job stability and credit history as it paints a picture of how well you’ll be able to keep up with monthly payments on any new debt. 

Since your DTI ratio doesn't include monthly expenses – such as food, utilities, gas, and entertainment –  a great tip to remember is budgeting beyond what your DTI labels as “affordable” for you. Aiming below the 36% back-end target is ideal. This is especially important since DTIs count your income before taxes, not what you take home each month.

Gather Documents Ahead of Time

Although each lender typically asks for slightly different documents and may be able to verify your financial information in other ways, be prepared to present the following when applying for your personal loan.

Valid ID

You’ll want to prove you are who you say you are. Loan application fraud is more common than most think, which is why identity verification is taken seriously. 

Your proof of identity can also show that you meet the basic requirements for personal loan eligibility, such as being a United States citizen, a permanent resident, or a long-term U.S. visa holder (depending on lender requirements), and that you’re at least 18 years or older.

Proof of Income

You’ll get the most favorable lending terms by proving steady income. This helps us to know you’ll be able to make your monthly personal loan payments on time. If you’re employed by someone else, prepare to bring your pay stubs or W-2 tax forms to the application process.

If you own your own business, documents such as your 1099 tax forms, income tax returns, or bank statements with your income deposits can provide proof of income. Don’t forget to include documentation of any extra income you earn on the side since it could be enough to bring your income up to the required minimum amount. 

You’ll want to check with your lender on the specific documents required to ensure you are ready to apply.

Adding a Co-Borrower

If you don’t qualify alone, you may want to add a co-borrower. Your co-borrower agrees to pay the loan if you aren’t able to at any point in the life of the loan. Both you and your co-borrower’s name on the loan could improve your chances of qualifying for a personal loan, as this is viewed as an extra layer of repayment security.

But remember the reverse of this too – both names on the loan also mean the credit history of you and your co-borrower are taken into account for approval. Your co-borrower might see a decrease in their credit score if you ever miss a payment.

Apply for a Personal Loan With Greater Texas Credit Union

If you’re still on the fence about whether a personal loan is right for you, we invite you to learn more about personal lending options with Greater Texas Credit Union. We offer our members flexible loans at highly competitive rates. Click below to learn more! 

See Our Personal Loans

*APR = Annual Percentage Rate. Rates range from as low as 7.49% APR up to 18% maximum APR. All loans subject to credit approval. Rate and term to be determined based on creditworthiness. The rate will not increase while the loan is active. Refinancing of existing credit union loans do not qualify. Cannot be combined with any other offer. Credit Union Membership required with a $5 minimum deposit. Some restrictions may apply. Rates and terms are subject to change.