In life, there will always be times when you need money urgently. It could be medical emergencies, money for daily needs such as food and water, money for rental, business, education or payment for another loan.
According to statistics, more than 47% of Filipino adults had borrowed money from moneylenders.
In Philippines, many applicants actually face loan rejections and approval from formal institutions like banks. They needed the money but usually lack documentary requirements, lack of collateral and necessary details to get their loan approved.
It can be rather discouraging when the loans are not approved, especially when you need the cash for daily necessities and emergencies. With the numerous considerations lenders have, is it actually possible to get an “OK” for your loan?
What are the secrets and tricks to getting your cash?
Having said that 47% of Filipino adults take on loans, what do we use the money for?
Taking on a loan requires many considerations and is a form of responsibility. Most Filipinos only choose to take on loans for necessities, bills, for their families and for their children.
Although the Philippine economy has been improving, not everyone is fully covered for their health costs. PhilHealth helps, but there are times where the bills get too high. When Filipinos require urgent medical attention, such as where they cannot walk or do daily work, they have to get a loan to pay the bill.
Sometimes there is not enough money to buy food or pay the bills. Things are getting more expensive with Philippine’s inflation at nine-year high . Getting a loan can help the family tide over the tough period until the next salary comes in.
Having the wedding of your dreams is not cheap, there are many preparations to be done and a lot of things to purchase. Some Filipino couples choose to take wedding loans in order to increase their spending power and budget to get the perfect wedding.
Filipinos often get money in order to fix their houses or to upgrade their houses. Sometimes it could be to repair certain areas or to increase the height of their floorings and walls to better brace again floods during rainy seasons.
Compared to our parents and grandparents, more people are interested in travelling today. If one is going for a once-in-a-lifetime holiday, they may choose to take a loan to supplement their travelling costs.
This one is common for OFWs. Filipinos take loans if they are planning to work in other countries in order to earn more money and provide a better life for their families. They can take the loan to travel overseas for work, and choose to return after a few years with more money.
Some Filipinos are unable to get their loans approved. They may have tried applying with licensed moneylenders or banks but did not get a positive response.
One of the main reasons is because of their credit report.
What is a credit report? It is very important? Credit report is a key record that moneylenders use when they are deciding if they should give the loan or not. Credit report is a record of all the borrower’s previous loans and how he or she repaid them. Were the repayments made on time? Were there late repayments?
According to LAWPHIL, Philippine Law and Jurisprudence Databank, “A credit report refers to a summary of consolidated and evaluated information on creditworthiness, credit standing, credit capacity, character and general reputation of a borrower”.
Simply put, a borrower who did not make his loan repayments on time will have a bad credit score. Likewise, a borrower who always paid on time will have a good credit score. Usually, banks will not approve borrowers who have a bad credit score. Having a bad credit score means that it is risky for banks to loan them the money.
If a borrower has not taken a loan before, they would not have a credit score. Do note that this does is not necessarily be a good thing. Having no credit score makes it harder for banks to evaluate the borrower’s repayment ability and they may choose not to approve of the loan either. On the other hand, registered moneylenders are more lenient and will lend money even to first-time borrowers.
Missing loan repayments will negatively affect your credit score. Remember to make timely repayments for all loans and bills to keep your credit history clean.
If you need to get a flexible loan conveniently and quickly, you can apply from a licensed moneylender. This way, you will be sure that they will not do anything illegal like loan sharks and will report your good payment history to the credit bureau. Always remember to have discipline and pay your loans on time. Having a high credit score increases the chances of getting your loan approved in the future.
To the surprise of many, one actually needs an income in order to get a loan.
And actually, lenders look not only at the income, but for a stable source of income.
Banks and licensed moneylenders are concerned with the stability of the borrower’s income. They usually do not loan money to borrowers who are job hoppers, who keep switching jobs and lack a fixed income. Freelancers will have a lower loan approval rate as well due to the nature of their jobs. Most lenders will check if the borrower been working regularly at a company for at least six months.
As mentioned, it may be tougher for freelancers, self-employed and OFWs to obtain a loan. However, do not be disheartened because they can still apply for a loan as long as they have a form of income. Registered moneylenders will still listen to the borrower’s and give a fair evaluation for the loan approval.
If you are a salaried employee, you can prepare your company ID and payslips for the last month. If one has a Certificate of Employment, check that it includes your date of hire and the amount of your current salary.
If you are a freelancer, you can prepare your bank statements for the last six months. Business owners should also submit their business permits and tax documents.
Getting a loan from a moneylender means forming a partnership with them and this requires a lot of trust. If you are planning to take a loan, you will have to build trust with the lender and this means that you should not falsify or fake any documents just to get approved.
Most of the consultants at the moneylenders and banks have many years of experience and resources. They will be able to spot inaccurate information quickly. If a borrower tried to falsify their information and make their salary seem higher, it is highly likely that they will be exposed.
Do not risk breaking the trust between you and your lender. Most lenders are here to help and are open to hearing your reasons and stories. It is best to be honest and come clean with all of your information. Lenders, especially registered moneylenders have more empathy and are more understanding. They may offer flexible loans and alternatives to accommodate to your situation and help you.
This concerns the amount of time required to process the applications.
Most moneylenders and banks receive hundreds of applications every day. Fully completed applications are processed faster and usually, the incomplete ones will be pushed to the waiting list.
This is because the lenders will have to contact the other borrowers for more of their details in order to process the loan. This takes up more time and delays the entire loan application process.
In worst case scenarios, applications that take too long to update or complete will be rejected. When this happens, borrowers will need to make another submission which requires more time and effort.
Save yourself the time and trouble by fully completing the loan application form and checking to make sure that you have all the required documents. Make sure that your information is clearly stated and that all forms and documents are consistent.
If you have sent in an application but did not get a quick reply, do drop the moneylenders a follow-up message. This helps you check if you require more documents for your loan to be approved.
There are some documents that are necessary in the loan application. Therefore, if there are any missing documents, the approval process will be delayed.
Having missing documents make it harder for moneylenders to process your loan and eventually, the loan will be declined.
The first step is to get the list of required documents from your lender. If the moneylender has a website, you should be able to find the required information from the loan pages or the Frequently Asked Questions (FAQ) page. Usually, a licensed online lending company such as Express Cash will require government-issued ID, company ID and proof of billing. Be sure to take a clear picture or scan the documents clearly before uploading them onto the online application form. They should be readable.
After submitting, be sure to always check your email and mobile phone so that you will not miss any notifications and replies. Lenders will contact you if they require more documents and information.
Sometimes when one needs cash urgently, they may choose to take on a bigger loan than they can afford.
With the many options available, it can be tempting to take on a larger loan. Some people may end up borrowing more money than they can afford. Note that the loan repayment will not only include the borrowed amount, it will also include interest rate and other costs such as service and processing fees.
Before taking a loan, take some time to consider how much you can handle to pay with ease. The lender will also evaluate your finances before loaning you the money. Make sure that the monthly repayment amount will not cause a strain on your finances.
Lenders and banks will not approve of loan applications that do not fit your financial status. For example, if you are making Php 20,000 a month and is asking for a loan that requires a monthly repayment of Php 20,000, you will be rejected.
Responsible moneylenders will not loan you an amount that they know you cannot afford. They will provide an amount that you can pay comfortably without sacrificing your basic needs.
Take your time to calculate the amount that you can afford to borrow, calculate the monthly repayments that you need to make.
For example, John earns a salary of Php 15,000 a month. He wants to take a loan of Php 30,000 and repay the amount over 1 year.
Php 30,000/12, John’s monthly repayment would be at least Php 2,500 and this does not include service charges and processing fees.
If paying Php 2,500 per month does not affect John’s usual bills, food and transportation expenses, then getting a loan of Php 30,000 and repaying over 1 year is feasible.
What is a proof of billing? Why do most moneylenders and banks ask for this document?
Generally, a proof of billing is a piece of document that has your name and address. It can be a phone bill, a cable subscription or a credit card bill. Moneylenders use this proof of billing to verify your residence. They will not approve the loan if they are unsure of the details and address of the borrower.
Look for your billings and submit clear copies to the moneylenders. Certain financial institutions may have specific proof of billings.
If you are living in your own house, then you will only need to submit a clear copy of your regular bills. The most common choice in Philippines is the Meralco bill.
If you are renting a home, then you may need to ask your moneylender for the specific documents. For Express Cash, we are flexible when providing loans. If the bill is under another person’s name, applicants only have to secure an authorization letter and the owner’s government ID. If the applicant is renting and the owner is not around, they can submit the Lease Contract. The other alternative is to obtain a barangay clearance or an authorization letter. Legal moneylenders like Express Cash accepts these as well.
There are many options and many moneylenders in Philippines. Each financial company will have their own set of offers and requirements. In order to get the loan with the best features and increase the chances of your loan approval, you will have to find the best moneylender that suits your needs.
What does finding a responsible lender mean? Unlike loan sharks, licensed and responsible moneylenders will not tempt you into taking the maximum loan amount. Instead, they will listen to your story and evaluate your finances to find the best loan amount for you, one that will not strain your finances. Loan sharks and irresponsible moneylenders sway their borrowers into getting a loan that is so huge that it becomes hard for them to repay. The longer the borrowers take to pay, the more interest the moneylenders earn and the tougher it gets for borrowers.
According to LawPhil Republic Act No. 9474, a lending company may grant loans in amounts and interest that is reasonable. Licensed moneylenders are not allowed to charge unreasonable interest rates that are too high. The best moneylenders will care for you and only approve the amount that is within your capacity to borrow.
Usually, it will be better to choose a moneylender that understands your needs and situation so that they can offer the best help. They will be able to customize a solution for you. Find a registered moneylender that offers flexibility and besides, it is always better to work with people that you are comfortable with.
Getting your loan application rejected can be disheartening. Generally, any form of rejection doesn’t feel very nice. Form a good relationship between a lender and a borrower, trust each other.
When you are applying for a loan, you need to make sure that the lender trusts you and is willing to pass cash to you. Ensure that all of your information is consistent and be truthful with your lender. Some moneylenders are more understanding than they seem.
If you are looking for easy and flexible cash loans, apply with Express Cash to get the best deals and rates. Express Cash offers numerous customizable packages that can best fit your financial needs at low interest rates. Almost all of the financial consultants have at least ten years of experience in the financial industry and will be able to advise the best loan packages in the shortest amount of time. Apply with Express Cash for the fastest loan process in Philippines.