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Personal loans allow you to borrow a lump sum amount that is repaid in fixed installments over time. They provide financing for major expenses or consolidate high-interest debts. Personal loans can be an accessible funding option when used responsibly. Here is a step-by-step guide on how to qualify for and apply for a personal loan.

What is a Personal Loan?

A personal loan is an unsecured loan that individuals borrow for personal use. It provides a lump sum cash amount upfront, which you repay with interest in equated monthly installments (EMIs) over a defined tenure. Personal loans do not require collateral and are not linked to a specific purchase. Common uses are big medical bills, home renovations, weddings, education, or debt consolidation.

Personal Loan Eligibility Requirements

To qualify for approval, personal loan applicants must meet certain eligibility norms set by lenders:

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  • Age 21 to 60 years in most cases
  • Philippine citizenship or permanent residency
  • Minimum monthly income range of Php 15,000 to Php 30,000
  • Have an acceptable credit score and history
  • Submit valid ID, proof of income, and residence documents
  • Meet any additional criteria required by individual lenders

Documents Required for Personal Loan Application

These documents are typically needed when applying for a personal loan:

  • Application form with personal, employment and financial details
  • ID proofs like passport, driver’s license or UMID card
  • Income documents such as pay slips, bank statements
  • Proof of residence through utility bills or lease contracts
  • Other documents requested by lender to ascertain eligibility

Which Bank Gives Personal Loan Easily?

Banks with more flexible eligibility and fewer document requirements may be easier options for qualifying for a personal loan. Some banks to consider are:

  • Home Credit – Requires only 1 valid ID and proof of income from even informal work
  • Cash mart – Quick approval based on minimal documents
  • Asia United Bank – Lower income requirement of just Php 10,000 monthly
  • Eastwest Bank – Minimum documents needed for application
  • Chinatrust – Claims high approval rate and easy requirements

Steps to Fill Out a Personal Loan Application

Follow these key steps when completing a personal loan application:

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  • Determine your loan eligibility – Gather your financial details and ensure you meet the lender’s qualifications.
  • Choose loan amount and tenure – Decide the loan amount and repayment period that suits your needs and repayment capacity.
  • Prepare required documents – Have ID, residence, income, and other documents ready as needed.
  • Fill application form – Provide accurate personal, employment and financial information.
  • Submit application – File the completed form along with supporting documents to the lender.
  • Get credit check – The lender will perform checks and verifications on your credit profile.
  • Loan approval – You will receive loan decision within a few days after necessary review by the lender.

Understanding Personal Loan Interest Rates

Personal loan interest rates vary from lender to lender and depend on multiple factors:

  • RBI’s prevailing repo rates – India’s central bank rates influence costs of capital
  • Your credit score – Higher scores can mean lower interest rates
  • Loan amount and tenure – bigger and longer loans imply higher risk so have higher rates
  • Lender – Each uses own metrics to determine applicable interest rate
  • Employment category – Salaried individuals may get better rates than self-employed

Compare interest rates and EMIs across lenders before applying. Opt for the lender offering the lowest interest cost on your personalized loan terms. Read terms carefully and seek clarifications before accepting the loan agreement.

Personal Loan Approval Process Explained

The personal loan approval process involves several steps once you submit your application:

  • Initial screening – The lender will first review your form and documents for completeness and to verify you meet the basic eligibility criteria.
  • Credit check – Your credit information including score, report, and history will be evaluated. This focuses on factors like repayment behavior, defaults, credit card limits, and outstanding debts.
  • Income verification – Lenders will validate your income declarations through pay slips, bank statements, tax returns or other documents. Stable and predictable income strengthens your application.
  • Other documentation review – ID, residence, and other proofs will be authenticated to check accuracy.
  • Assessment – Based on the information collected, the lender will analyze your creditworthiness and ability to repay within your declared income.
  • Decision – The lender will either approve your loan with specific terms, ask for additional details, or deny the application.
  • Disbursal – Once approved, the lender will complete documentation, have you sign the agreement, then disburse the loan amount to your bank account.

The approval decision factors in your eligibility, income adequacy, credit behavior, risk level, and the lender’s own lending criteria. Maintaining a strong credit profile and predictable income are key to speedy approval.

What to Do If Your Personal Loan Application Is Denied

If your personal loan application gets rejected, here are some tips:

  • Ask for reasons – Contact the lender to understand why they declined your application. Common reasons could be inadequate income, poor credit score, or limited credit history.
  • Improve your credit score – Work on factors that impact your score like repaying debts, limiting inquiries, and correcting errors in your credit report.
  • Increase your income – If low income was an issue, find ways to raise your earnings with a new job, freelancing, etc.
  • Lower your debt – Pay down existing high-interest debts to reduce your overall loan obligations.
  • Apply with a co-applicant – Adding a co-signer with better income and credit profile can improve chances of approval.
  • Provide security or collateral – Secured loans against an asset may offer better approval likelihood if you own assets.
  • Apply for a lower amount – Reducing the loan amount can help if repayment capacity was a concern.
  • Check with other lenders – Each lender uses different approval criteria. Trying different institutions can help.
  • Improve your documents – Ensure all required paperwork is accurate and current before reapplying.
  • Build relationship – Maintaining accounts, timely repayments and frequent engagement can facilitate future approval.

With some patience and work on the key areas of concern, you can strengthen your personal loan eligibility for success on subsequent attempts.

Tips for Getting Approved for a Personal Loan

  • Here are some tips to improve your chances of successfully getting approved for a personal loan:
  • Maintain a strong credit score above 750. Check your score ahead of application and work to improve it if needed.
  • Have a lower debt-to-income ratio. Keep outstanding debts low relative to your income.
  • Avoid applying for multiple loans within a short timeframe as this raises red flags for lenders.
  • Build relationship with lender by holding accounts or taking secured loan first before applying for an unsecured personal loan.
  • Provide all documentation upfront to prevent delays or rejections due to missing papers. Ensure details are accurate.
  • Have long tenure at current job to demonstrate employment stability. Avoid switching jobs before applying.
  • Consider applying with a creditworthy co-applicant who can enhance the profile of the application.
  • Start small if you have a limited or short credit history. Apply for a smaller loan tenure and amount first before requesting higher amounts.
  • Avoid multiple loan applications at the same time. Submit applications across lenders with gap of few months.
  • Remain well below caps on repayment capacity to increase comfort of lender in approving.

With prudent planning and profile building, you can position yourself as an attractive borrower more likely to get approved for a personal loan.

Which Bank Gives Personal Loan Easily?

Some banks offering higher chances of personal loan approval include:

  • Home Credit – Requires only 1 valid ID and proof of income. Also offers loans against alternate documents.
  • Cashmart – Provides quick loan approval decision within hours along with flexible options.
  • Asia United Bank – Has lower monthly income requirement starting from just Php 10,000.
  • Eastwest Bank – Claims easy application process with fast turnaround time.
  • Chinatrust Bank – Known for high approval rates and light documentation requirements.
  • BPI Personal Loan – Offers pre-qualified loan offers to deposit account holders.
  • Citibank – Has pre-approved loans for existing Citibank credit card customers.
  • Security Bank – Provides easy application options completely online.
  • BDO Unibank – Claims high approval rate when applying online.
  • MBL or Metrobank – Minimal documents required and provides easy application channels.

Evaluate lender criteria and your eligibility to apply with banks offering higher chances of personal loan approval. Check terms and interest rates to choose the best loan product.

Final words

Personal loans offer funds to finance major expenses or consolidations. Review your eligibility, prepare documents, and submit a complete application to get started. Select lenders that provide better approval odds and interest rates. Use personal loans judiciously within your repayment capacity. Managing the loan diligently helps build your credit profile for the future.