Many of us have already been hoping for better financial relief after getting affected by this pandemic. You may rely on a personal loan as your quick solution for solving your financial problems. However, there are some steps and requirements that you need to do before you can get your loan application approved by the banks and other lending institutions.
You may take some time and effort for getting your loan approved easily. In this article, we will share with you some recommended tips on how you can increase your chance of approval for your personal loan application.
Know your debt-to-income ratio
This is the first thing that you have to know before you start applying for any loan application. You should be realistic about the total amount you can borrow. You can use the debt-to-income ratio for finding the right loan amount for your finance. The total monthly debt payment should be around 30 – 35% of your total monthly income.
Know different types of loans that are available on the market
There are several types of loans that you can take on the market now. A secured loan is one of the most popular personal loans on the market today. This loan requires you to submit an asset as collateral, for example, property or vehicle. Another type of loan is the unsecured loan: digido.ph/articles/cash-loan-no-collateral You don’t have to put up your asset as collateral when you want to get this loan. The amount that you can borrow with the unsecured loan will be lower than the secured loan.
Sean Martin D. Plantado, head of customer service at Digido.ph, notes that many borrowers are indifferent to online loan processing, believing that if the organization is not a bank, there is no need to pay back. This is not true! A borrower who fails to repay will be fined. If the fine is not paid, the debtor will be summoned to court. But it’s also good for the customer because the law protects him too.
Check all details from the personal loan
Different banks and lenders may have different details and terms for their customers. It is recommended for you do some research first before you take any of your favorite loans. You can consider some important factors, such as loan amount, interest rate, ease of application, repayment period, lender’s reputation, etc. You need to ensure that all of these factors are suitable for your financial standing.
Compare some available lenders
You need to know that you can find a lot of types of banks and lenders that are available in the Philippines. You can contact some of these lenders by calling their customer service hotlines or via email. You can ask about their personal loan application procedures, additional fees, terms, time frame, repayment schemes, etc. Doing all of these procedures may take a lot of your time, but they can help you find the right personal loan for your needs.
Get all required documents ready
Before you start the personal loan application, you need to prepare all the documentation that you need. Different institutions may have different requirements. Therefore, you can contact them for getting the checklist of the items that you are going to submit. In general, you may be required to submit the personal loan application form, proof of income, photocopy of your legal ID, etc.
Improve your credit history
Most financial institutions will look at your credit history before they decide to approve your loan application or not. If you always pay your credit card balance or other loans on time every month, it will show that you can make on-time payments on your loan too. It will show that you have the discipline to pay off all of your loans. It will increase your chance of getting your loan approved.
Submit your proof of income
If you want to increase your chance of getting your loan application approved, you need to submit proof of income. As an employer, you will have a better chance to get your loan application approved compared to freelancers. If you are self-employed, you may also want to submit some additional documents, such as a copy of the income tax return or ITR, audited financial statements, necessary licenses, DTI business permit, SEC registration, etc.
Find a willing co-borrower or guarantor
This is another strategy that you can use, especially if you want to increase your chance of getting your loan application approved. A guarantor should sign the loan application with you voluntarily. This person also needs to prepare the same documents required by the lenders. The guarantor also needs to have a good credit history.