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Are New Employees Able to Get a Personal Loan?

Are New Employees Able to Get a Personal Loan?
Lauren Ward
Lauren WardUpdated December 13, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
If you’re thinking, I just started my job but need a loan, the good news is that it’s possible to be approved for one. You may even qualify for a personal loan for a new employee if you haven’t actually worked your first day yet, as long as you’re about to start the job. Here’s what you can expect when you’re applying for a personal loan as a new employee, along with tips that could improve your odds of getting approved. 

Typical Personal Loan Approval Odds as a New Employee  

Different lenders may have different eligibility requirements for personal loans. However, length of employment is typically not a standard requirement for a personal loan for a new employee.You likely will need to provide proof of your employment and income. A lender wants to see that you have enough money coming in to make your monthly loan payments. Lenders will also look at your credit history and your debt-to-income ratio (DTI), which is a comparison of your gross monthly income to your monthly debt. Generally, the lower your DTI, the better, because it shows that you are able to take on more debt without stretching yourself too thin.Length of employment could affect the interest rate and loan terms you’re offered. For instance, you might have to pay a higher interest rate on a personal loan as a new employee.   

Risk of Lending a Personal Loan to New Employees 

Some lenders may consider a personal loan for a new employee to be risky. But other lenders might not. If a borrower has a strong credit history and a low DTI, that may help lenders to see them as less of a risk.There are also income-based loans that require you to make a certain amount of money in order to qualify. This is another type of personal loan you might want to explore as an option. In addition, no-income verification personal loans also exist, which could be something to look into if you haven’t yet started earning income in your new job. It’s wise to evaluate all the options in order to find the best one for you.

Do Private Lenders Care if You Are a New Employee?

There may be some lenders who will only work with borrowers who have been in their current job for a certain amount of time. Other lenders might be willing to offer a personal loan to a new employee. But there’s no universal standard. It depends on each lender and their specific requirements. Keep in mind that your current employment is just one factor lenders use to consider your eligibility. They also look at:
  • Income
  • Employment history
  • Debt-to-income ratio
  • Credit score
  • Credit history
  • Loan amount
All of these variables help determine your risk. Although you may have just started your job, if you have a strong credit score and a history of steady employment, some lenders may be willing to offer you a personal loan.  

Can You Use a Job Offer Letter as Proof of Income for a Personal Loan? 

An offer letter from your new employer and proof of your acceptance is often enough to be eligible for personal loan with a new job. Plus, if your new job is going to increase your income, you may even be able to qualify for a better interest rate on a personal loan. As you’re shopping for a loan, comparing personal loan interest rates and loan terms could be helpful in looking for a lender and a loan that’s a good fit for your situation.

Do You Need a Cosigner or Coborrower to Get a Personal Loan as a New Employee? 

While you don’t need a cosigner or coborrower to get a personal loan as a new employee, it could help. A cosigner on a personal loan is someone who agrees to be responsible for the loan and make payments on it should you fail to do so. Even if you have a strong credit score and employment history, a cosigner could not only help you get approved for a personal loan, but they may even help you get a reduced rate. A coborrower such as a spouse or partner who will be equally responsible for the loan payments with you, could also help your chances of being approved. Having a coborrower shows a lender that a second source of income is available to pay the loan each month. In other words, it makes lending to you less risky. And if a coborrower has a good credit score, that could help you qualify for a bigger loan amount or better terms.

Typical Personal Loan Employment Requirements 

Qualifying for personal loans typically depends on your income, debt-to-income ratio, and credit score, as well as the loan amount you’re requesting. Even borrowers with good credit scores may be denied a loan if the lender believes the monthly payment would be difficult for them to manage. And while there are personal loans for the unemployed, it's still important to have some kind of income, like a pension, child support, or alimony, to help get a loan. Lenders want to know that the borrower can pay back the loan amount. 

Personal Loan Income Requirements

Personal loan income requirements vary lender to lender. Some lenders may choose only to work with borrowers who make at least $45,000 a year, while others don’t specify a minimum income amount. You can check the lender’s website, or contact them directly, to find out what their income requirements are. Also key is considering debt to income ratio. Ideally, lenders prefer that a borrower’s DTI be 36% or lower. You can calculate your DTI by adding up your monthly expenses like loan payments, credit card payments, and mortgage or rent payments, and dividing that number by your gross monthly income, which is your pre-tax income. Then convert the final number to a percentage (so, for instance, .37 would be 37%).Overall, your income is important, but so is your DTI.

Tips for Getting Personal Loans as a New Employee

Here are some strategies for boosting your chances of qualifying for a personal loan for new employees:
  1. Check your credit. It’s a good idea to review your credit report to make sure it doesn’t contain any mistakes. You can check it for free at If you see errors, contact the credit bureau to correct them as soon as possible. 
  2. Make sure you meet all the lender’s requirements. If you’re uncertain about what a lender requires for eligibility, contact them to find out the specifics. This will help you understand what they're looking for.
  3. Ask for a lower loan amount. A smaller amount is considered less of a risk and may help increase your chances of being approved
  4. Submit all paperwork and supporting documents. Make sure to give the lender everything they need to avoid delays or having them return your application for corrections.  
  5. Consider having a cosigner or coborrower on the loan. This could make you less risky to a lender because a second person will also be responsible for repaying the loan if you can’t.
  6. Wait a bit before applying, if you can. If you can hold off for a month or two before applying for a personal loan, you may have an easier time getting approved.  

The Takeaway

It is possible to get a personal loan as a new employee. You’ll need to provide proof of employment and income so the lender can see that you can make your loan payments. Certain strategies, such as asking for a lower loan amount and making sure your credit is in good shape, may help increase your chances of being approved.As you’re exploring personal loan options, Lantern by SoFi can make it easier. In our online marketplace, you can compare offers from multiple lenders all in one place. That can help you quickly and conveniently choose a loan that’s best for your needs.Find and compare personal loan options with Lantern.

Frequently Asked Questions

Can you get a personal loan as a new employee?
How long do you have to show employment income to get a personal loan?
How do personal loan private lenders view new employees?

About the Author

Lauren Ward

Lauren Ward

Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
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