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How to apply for a personal loan?

Getting a personal loan is most advantageous when it’s meant to improve ones life such as for investment or home improvement for a growing family. However if you are strapped for cash for emergency reasons, the only ticket to get out of such situation is through a personal loan. When seeking for a loan, one must follow standard guidelines that banks and other financing companies setup. Being mindful on the way you get a personal loan will help you find one that fit your specific need.

Here’s how to apply for a personal loan:

  1. Know your specific need
  2. Research the types of loans
  3. Find a lender
  4. Fill out form(s)
  5. Prepare basic documentary requirements
  6. Wait for the lender to reach out to you
  7. Submit all necessary documentary requirements
  8. Be open to subject yourself to credit investigation
  9. Wait for final loan approval advise
  10. Claim your money from the approving lender when advised

Know your specific need

It is important for you to determine the purpose of the loan or what it intends to realize. Do you need it for an emergency? That’s justified. Do you need it to invest or to start your own business? It’s the best course since you know there’s an ROI  (return of investments) or profit. However, if you only need it to fulfill a whim or a luxury then a loan is not for you. Getting a personal loan for the wrong reasons is a recipe for a disaster.

Research the types of loans

There are two types of loans everyone needs to know, secured and unsecured loan. Secured loan is a collateral loan, which means the lender requires you to share the risk of the loan by producing a collateral such as car or real estate property. Unsecured loan is a non-collateral loan which does not risk any type of property for repossession in case of repayment default. However, unlike a secured loan where the amount will rely largely on the price value of the property, the amount approved for an unsecured loan will be base entirely on his/her credit history and income at the time of application.

Find a lender

There are many places to get a loan. Make sure you look at all your loan options before deciding on one. The following are types of financing institutions where you can get a loan.

Banks are the most ideal option to get a personal loan because they charge the lowest interest that follow the guidelines of the BSP (Bangko Sentral Ng Pilipinas), which protects you from any predatory lenders. However the deterrent of most applicants are the stringent requirements and qualifications. See Complete list of Philippine Banks.

Private lenders are private lending institutions strictly regulated by the BSP. These are private owned and mostly localized unlike banks. These private lenders are the middle ground between okay interest rates and moderate requirements. So for those people who are strapped for cash and need to get a personal loan at the shortest amount of time possible, private lending companies are the usual go to.

Loan sharks are bad news. They don’t mean well and are grouped under predatory lending. Also called as 5/6, these type of lenders prey on the desperate. They charge as high as 30% per month or 1% per day.

The best and new way to find a lender is to connect to a loans brokerage. These brokerage provides borrowers several options for which they qualify for based on the information supplied. The search becomes easier and choosing the best lender becomes faster. Loansolutions offers a more innovative and modern way in loans search, selection and processing. Learn More

Fill out forms

If you wish to do it the traditional way, you can start collecting loan application forms from all your preferred lenders and fill them out one by one. This is the tedious and time consuming way, not to mention expensive with all the travelling from one lender to another. A great alternative is to look for a loans platform which aggregates lender affiliations in one place. All you have to do is fill out a single online form and it’s as if you filled out a dozen to submit to multiple lenders.

Prepare basic documentary requirements

Regardless if someone from the lending company has reached out to you or not, it is important that you have the list of the requirements ready for a faster processing once the ball starts rolling. So what are the basic requirements? Basic loan requirements fall under three categories:

Proof of Income such as 3 months payslip, Certificate of Employment indicating, position, gross income and tenure.

Proof of residency such as utility or postpaid bills. It is important that these bills are under your name else you need to secure an authorization.

Proof of identity or any valid IDs such as a company ID and Government-issued IDs

Wait for the lender to reach out to you

Make sure you are always available for the call when your lender reaches out to you. Also check your emails and text messages in case they reach out to you in other means. This is very important since lenders have a pile of applications they have to go through so missing that important call may put you back to the end of the queue which means it will take days, if not weeks, for your application to resurface for processing.

Submit all necessary documentary requirements

Submit all requested requirements as soon as possible to hasten the processing of your loan application. Most of the time, they will require additional requirements so make sure you ask the lender the list of additional requirements they might possibly need moving forward.

Be open to subject yourself to credit investigation

Lenders do credit investigation most especially for unsecured personal loan applications. They will call your work office to verify whether you truly work at that company, what position you hold and the responsibilities you hold. Credit investigation also include visiting your house or your neighborhood to look into what type of person you are. Some cases, credit investigation only require a phone interview and a look at your credit history such as with your credit card statements.

Wait for final loan approval advise

You will learn soon enough if your personal loan has been approved or not. Your lender will inform you when you are approved and will advise you additional steps to fully secure the loan. However, based on observations with a number of Loansolutions applicants who were not approved most banks do not inform the applicant when their loan is declined or if they do, they rarely divulge the reason for the disapproval.

Claim your money from the approving lender

Whether you processed your loan via a loans brokerage, an agent or directly with the lender, remember that the only valid announcement of loan approval will be coming from the approving lender itself and no one else. If someone other than your lender tells you your loan got approved and is asking for processing fees please do not believe them. Agents and Loan Brokerage are not allowed to collect any fees from the applicant. Better be safe than sorry.

Getting a loan in a traditional way is tedious and as previously mentioned, expensive and time consuming. That’s why Loansolutions is opening a new way to getting a loan easier, better and faster. With Loansolutions all you have to do is fill our a single form online, get automatically matched with lender(s), get a call from a dedicated loan advisor, submit one set of documents and then wait for news of loans approval. All these simple steps to get a loan within the comforts of your home or office.