If you apply for a personal loan for the first time, or your loan application has been rejected, you probably do not know the factors for successful approval of your loan application. There are many reasons for the lenders to reject an application and the most common of which are related to creditworthiness, personal information and the type of loan you apply for. Therefore, you should know five factors below to improve your loan application so that your application for cash loan philippines be approved faster and you can even get a better loan.
Financial institutions will always review your credit history to determine if you are a trustworthy and disciplined borrower. If your credit history proves that you always pay your credit card balance on time every month, this means you are responsible for the loan and have the financial capacity to repay the loan. If you have maintained a credit card with a good score, this shows your sense of discipline to pay off 2-3 year personal loans. Accordingly, lending institutions will highly appreciate you and approve your application for cash loan philippines.
The first thing is to improve your credit score
If you have a fairly low credit score and a bad credit history, the following is a few things you can do to improve your credit history:
Pay your bills on time
Pay your bills in full
Spend less than your credit limit
Maintain your old account
Avoid external factors that negatively impact your history (e.g. foreclosure, bankruptcy, etc.)
Before starting the application for a cash loan philippines, you should prepare all required documents. Different financial institutions may have different requirements, so you should contact your lender first to ask for a list of what documents or information to be provided before spending time on preparation.
Prepare all information and documents
Also, you should check the lender’s conditions applicable to the borrowers. Normally, you just need to be a Philippine citizen aged 22 or older and have a legal ID to be eligible to apply for a cash loan philippines. However, many institutions require you to provide proof of monthly income, so you should check their conditions.
You will have a better chance of getting a loan approved if you have a steady job rather than a freelance work. A steady job makes the lenders believe that you have the financial ability to repay your loan.
Stable job and income
Where you are self-employed, the lender may require you to provide the following documents to verify your financial status:
Copy of your Income Tax Return (ITR)
Your audited financial statements over the years
Required documents such as DTI registration certificate or SEC registration certificate
These documents prove that you generate revenue and make full tax payments and your loan application will look better in the eyes of lenders.
The debt-to-income (DTI) ratio is expressed as a percentage and represents the portion of a borrower’s total monthly income intended for his or her monthly debt service. Lending financial institutions may predict a borrower’s ability to pay new and existing debts based on DTI. Accordingly, a DTI ratio below 36% is ideal. However, some lenders will accept applicants with a DTI ratio of up to 50%.
Keep your debt-to-income ratio low
Make sure you are borrowing an amount that you can really pay. You may use the debt-to-income ratio to measure how much will be used to pay off your debt.
To calculate your debt-to-income ratio, you just divide your total monthly debt payments by your total monthly income and then multiply such amount by 100.
Consider applying for a suitable loan amount and repayment term
In addition, you should consider apply for a suitable repayment term. The longer the term, although it reduces the amount you pay each month, it may increase your interest. In this case, you may decide based on your DTI ratio. If your DTI is low, your monthly income may comfortably satisfy your loan and a short repayment term should be chosen. Conversely, if your DTI is high, you may extend the repayment period to relieve your financial pressure.
A loan with a suitable loan amount and repayment term will prove to the lender that you plan and think about the loan, thereby you may have a higher chance of successful approval.
Or more simply, you can contact MoneyCat to apply for a cash loan philippines. We do not have strict requirements on loan conditions or require you to prove your monthly income. Even if you are a freelancer, MoneyCat will provide you with a suitable personal loan. Or even if you have a bad credit history, MoneyCat may give you advices on improving your credit score, and provide you with the most affordable loan. At MoneyCat, your application for a cash loan philippines will become much easier and faster.
Hopefully the above suggestions will help you feel more confident when applying for a cash loan philippines. Also, you may consider MoneyCat personal loans. We offer a wide range of loans with different limits and terms and ensure to provide you with the most optimal financial solution.
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