Loans can be a burden especially if you take out the repayments from your monthly income. That is why for some, getting a loan is never an option. However, for major expenses that can improve one’s way of life and well-being, a personal loan or a salary loan can be a smart tool (with proper planning, of course).
But with a rigorous application process, you are not always sure you would get an approval especially if you do not have a solid proof that you have the capacity to pay.
If you are planning to apply, here are some tips to pass that credit check and easily get a loan approval:
Have a good credit history
You credit history will be the solid proof of your repayment behavior and ethics. An outstanding credit history will give you nothing but glory even if you think you are not getting a loan now or you think you would not need it in the future. Any unpaid loans, bounced checks, credit card delinquency, dishonest loan purpose among others, are red flags that could wrench your application process.
Maintain a savings account
If you cannot stand credit but really needs money for whatever reasons, set up your savings account. Make it a point that you contribute regularly into it. When you do that, you are demonstrating that you are likely able to manage your loan repayments.
Supply only factual information
Banks will continuously verify all information you have provided in your application sheet. During the application process, banks and other lending companies will call you to verify all your personal data.
If they cannot reach you in the first phase, no loan process will take place. Other information such as your finances, mortgages, and employment should not be taken for granted because any inconsistencies in your details and documents can result in a delay of your application or outright decline.
Aim for a realistic loan principal
Apply for an amount that is realistic according to your cash flow. After all, your bank will check your current standing from all the documents you are going to send them. The bank could grant you the loan but possibly lower than what you desired if they think you cannot repay it. An outright decline is also possible.
Do not apply for too many loans all at once because your credit report would contain all current inquiries, and banks might picture out that you really are into a financial trap. That may put you as a higher credit risk, more than your bank is willing to take, which means lesser possibility of an approval.
Compare interest rates and loan terms
Before applying for a personal loan or line of credit, make sure that you compare the market and aim to get the best deals with the easiest payment terms. Do not let the loan be a burden to your cash flow.
Have you been granted with a personal loan before? What other tips can you offer other loan applicants?
MoneyMax.ph is an online platform for comparing financial and telecom products and services. It aims to give the power of smart purchase decisions back to Filipino consumers by providing everything they need to become financially savvy.