Not everyone who applies for a personal loan gets approved. Naturally, lenders want to maximize their chances of getting their money back, and as such, they need to be quite selective with the people to whom they extend credit. Banks and other lending organizations in the Philippines, just like everywhere else, make it a point to thoroughly assess a borrower’s creditworthiness or their likelihood of repaying their debts in full. Only after passing this stringent evaluation can a person expect to get approval for their loan application.
Are you planning to apply for a housing loan Philippines product from a local bank? Or perhaps you’ve always wanted to own a car and are finally ready to get started by applying for a car loan. You may even be thinking of investing in yourself and be in need of extra funds to finance the courses and seminars that you want to take. Whatever your motivation may be, here are some of the things you can do to give yourself a good chance of gaining approval for your loan application.
Determine how much money you need to reach your goal.
Before applying for a loan, you need to determine exactly how much you need. No matter if you’re taking out a loan to buy a house, shop for a car, or put your career plans into motion, you need to ask your lender for a reasonable loan amount. It has to be enough for your purpose, and it should be an amount that you are capable of paying in the long run. Let’s say you’re planning to buy a condo unit. How much money have you saved for the down payment, and how much more do you need to complete the transaction? Also, will the unit require renovations once the purchase has been completed, and if so, can you manage this expense using your own money? These are just some of the items you need to think about when coming up with a figure for your loan.
Understand how paying your loan will impact your finances.
It’s also important to understand how taking out a loan and paying it back will affect your long-term finances. It’s a consideration that will affect your loan application, as your prospective lender will want to see how likely you are to completely pay back what you owe. Given your target loan amount, how much do you need to set aside from your income to meet your monthly payments? Also, how much time will you need to completely pay off your loan? In case of emergencies, do you have an emergency fund that you can dip into, or will you need to compromise your monthly loan repayments to meet unexpected but urgent expenses? Remember, you’ll need to show banks that you’re an easy customer who will not make it difficult for them to get their money back.
Review your credit history and take steps to improve your credit score.
Banks and other lending organizations are keen on seeing if you have a history of paying off your loans and other financial responsibilities in the past. This can serve as solid proof that you are indeed a good borrower who is worthy of being entrusted with a loan. You can improve your creditworthiness by using your credit cards to cover your utilities and grocery expenses, for example, and then ensuring that these are paid before the deadline. It’s also an option to apply for a smaller loan and pay it diligently to showcase your sense of responsibility as a borrower. Take note, though, that your level of creditworthiness can be raised or lowered by your actions. If you’ve experienced bankruptcy or repossession, for example, then these can make it harder for you to get loan approval.
Talk to potential lenders and ask about their loan application process.
Finally, it’s important to find a lender who has loan programs that will help you achieve your goals. After determining what you need, it’s time to see what the market offers. Check out banks that offer personal loans, including the financial institution that you have built a relationship with. Talk to them about the loans that best match your needs, the details of each program, and their respective requirements and estimated approval times. Then, compare your options and check your previous computations to see if the numbers match your ability to pay. After completing the requirements, submit your application to your preferred lending institution.
While you may feel a little nervous, don’t lose sleep over your application. Since you’ve done all you can to present yourself as a creditworthy borrower, you should have an easier time getting approval for your loan application. The ball is now in the lender’s court, and it’s up to your financial service provider whether or not your loan will be approved and when.
In case you’re having doubts about whether your application will make the cut or if the process is taking longer than usual, don’t hesitate to bring up your concerns with the bank. Following up every now and then can help you set your expectations and enable you to decide as soon as possible if you need to check out other lending bodies and financial institutions.
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