Struggles in applying for a personal loan
PERSONAL loans can give you a quick fix for expenses you never saw coming. They’re a convenient way to borrow money, and you can just pay them off in monthly installments with interest. With a personal loan, there’s no need to ask your parents or your best friend for money. No need to sell prized possessions for some quick cash, either.
Unfortunately, not everyone can be approved for a personal loan. Before you can get a loan approved, financial institutions will first check whether you are a credible borrower or not. If you don’t meet the criteria, your loan will automatically get disapproved.
Many things affect the outcome of your loan application, the most common of which is bad credit history. But very few people can truly say that they’ve never had a late payment for a credit card bill, or missed a payment for a loan. In fact, very few people can really say they are 100% debtfree. Which is why it’s a struggle to apply for a personal loan if you have a less than perfect credit history.
Here are some of the struggles that people face when applying for a personal loan here in the Philippines.
You Must Have a Fixed Source of Income
Financial institutions are more inclined to approve a personal loan application if the applicant has a fixed and stable source of income. This establishes your ability to pay off the loan in the next couple of years. It’s a very important requirement for loan applicants. Employees with lesser income but have a permanent job have a higher chance of getting their loan approved compared to employees who earn more but work freelance or on a contractual basis.
Build a Relationship With Your Bank
If you have been a loyal customer of a financial institution and have had numerous transactions over the years, you are likely to get an approved loan. Banks look at your credit card history, as well as your savings and checking accounts transactions, to establish your financial credibility. If you have no savings accounts or credit cards, it will be more challenging to get a personal loan approved. You may have to submit more documents and financial records to prove your credit worthiness.