The loan is the lending of money from one individual, organization to another individual, organization. A loan proves to be a very convenient path to fulfill our dreams, but it turns out to be dreadful if you don’t have the capacity to pay its monthly installments with interest.
Financial institution’s process of checking out your credibility to repay your debt is very strict. Therefore, everyone’s loan can’t be sanctioned. Here is the rundown of the obstacles that you may face while applying for the best personal loans in the Philippines:
- Secured earnings
If you have a fixed source of earnings, then financial institutions will be more inclined towards your loan application. As to them, there will be an absurdity that in future you can pay your debts in the next couple of years without any delay.
Employees with the permanent job but less income have to cross fewer hurdles compared to the employees on a contractual basis but high income.
- Previous relationship with banks
The person asking for a loan with the institution in which he has an account and transacts on regular intervals will find a lot easier about the one who does not possess any account.
This is because account bearing person’s credibility can easily be measured by looking at its credit card details as well as account transaction while a non-account bearing person will have to submit more documents; thereby, proving his/her credit worthiness.
- Credit card
In sanctioning of loan credit card, history will play a key role. If you have paid your credit card dues or loans, then your application may be taken forward. Otherwise institutions will be left with no choice but to deny your loan.
Bounced Cheque, unpaid loans, delinquent credit cards are all sources through, which loan provider can easily imagine your financial status. These factors will greatly affect whether a red flag or green flag has to be shown to your loan application.
- Credit history
‘No credit’ does not mean good credit. Banks will not lend money to borrower’s whose creditworthiness is questionable. No credit history reflects that process of building your financial status is on a row, which ultimately can go against the approving of the loan. They will immediately refuse your loan if you are unable to prove your repaying capacity.
- Unrealistic loan amount
Another problem faced in the approval process of OFW loans in the Philippines is the asked amount of loan. Banks may sanctions loan for a lesser amount. A comparison will be made between your requirement and desired amount. If not satisfied they will reject your application or sanctions it for a lower amount.
Loan acts as a quick fix for expenses, but the flip side is that the amount of which loan will come it goes off with interest. “Credit buying is much like being drunk. The buzz happens immediately and gives you a lift; the hangover comes a day after.”