Personal loan is one of the many loans available to any bank and financial institution that a borrower can apply to. Loan involves borrowing a sum of money that is expected to be paid back with interest. There are also different types of loans depending on the borrower's reasons and needs such as salary or pay-day loans, mortgage loans, auto loans, personal loans, etc. When borrowing money, it is important to know what are the available options for you to assess your capacity to pay.
Personal loan is a loan that is used for any personal expense. Unlike the other types of loans, a personal loan does not have any particular or specific purpose. You can apply and use it for whatever reasons you desire.
Anyone who generates a steady income is qualified to apply for a personal loan as long as they can submit a proof that they have an existent income source. Those who are employed, self-employed, freelancers or even business owners can apply for it.
Approval of personal loans is not that easy. Creditors are more strict and interested in knowing the borrower even more. On top of the borrower’s income, there are also other things that are needed to qualify for a personal loan.
Below are the things you need to know in order for you to get your personal loan application approved.
1. Complete requirements
All banks and financial institutions require some documents that are needed for the application of a personal loan. Aside from the form that you need to fill out, there are also documents that they will demand for you to pass such as IDs, pay slip, etc. Below are the required documents needed depending on the borrower’s occupation:
For employed/ Professionals:
ID or identification card with photo that is issued by the government such as Driver’s license, passport, TIN, PRC, etc.)
Latest pay slip
For Self-employed
ID or identification card with photo that is issued by the government, such as driver’s license, passport, TIN, PRC, etc.)
Audited financial statements
Latest Income Tax Return
DTI Business permit or SEC registration
Remember that incomplete submission of requirements leads to termination of your application. The effort of submitting complete requirements reflect the personality, especially the sense of responsibility the borrower has in paying back his debts.
2. Profile
Creditors will allow borrowers to fill out a form that requires personal information. Loan application is always subject for investigation, so make sure to put only true and real information regarding your profile. It is important for them to know the borrower's address, office address, contact number, etc.
3. Credit History
It is important to have a clean and excellent credit history. If you have a previous loan that you have already fully paid, it can increase the probability of your loan application approval. However, bad credit records can also decrease the probability of getting your loan application approved, and worse it can lead to its termination.
4. Cash flow
When borrowing money, assess your capacity to pay; that is, apply for a loan with the amount that is realistic. Only apply for the amount that you can afford to pay. Always check your cash flow and assess how much you can afford. Remember that resorting to a loan is not always advisable, but with good planning, control and discipline, it is absolutely helpful when you need immediate cash.
Kash Martinez, understands the intrinsic attributes of making excellent content that suits the needs of every business especially when it comes to online financing. She can conceptualize and implement marketing plans, explores profitable B2B opportunities and then absorb Loan Solutions PH services.
Great article
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