Things to Consider When Applying for a Personal Loan

I am 25 years old, a licensed medical practitioner here in the Philippines, and as for fact, people who worked in the medical field only have an income that can support one person alone, or if you are lucky enough, then you can also support your family’s basic needs as well; but in my case, my salary could allow to support only myself. I have been wanting to travel to Japan since one of my relatives is currently residing there, but given my financial limits due to my low income, I wasn’t given the chance to do so; not until a friend of mine suggested that I should try to loan some money. After several days of contemplating on my decision and what is best for me, I followed his suggestion, but getting a personal or unsecured loan, especially by applying loans here in the Philippines, is not as easy as ABC’s and 123’s, unless you take these into considerations first before applying:


  1. You should know your credit score


– As for my side, knowing my credit score is the first step.  Having a high credit score gives you greater chances in getting a personal loan, but if you have a low score, and would want to raise it, paying your monthly dues on time and taking out wrong data from your credit report can help you with it. If you want to check if you are eligible for a personal loan in the Philippines, you can check your credit score with Credit Management Association of the Philippines (CMAP).


  1. You should know the contrast between secured loans and unsecured loans


– Before, I never knew the differences between these types of loans and what consequences it comes after, and it helped me a great deal to know them. As what I’ve learned, secured loans come with a guarantee or collateral (e.g. Car, properties). Unsecured loan, otherwise known as personal loans, does not have any collaterals backed up with it, so you must know that with this type of loan, there are higher rates of interest.


  1. Set your budget up


– You should know how much you can afford. I had a friend who took a longer period for him to pay out his personal loans; as a result, he paid more than what his budget has allowed him to. It is best to know how much money you can afford every month, and once you know, get a loan that gets you to pay monthly as soon as possible without hurting your pockets.


  1. Look for great deals when it comes to looking for lenders


– There are several lending companies to apply for loan in the Philippines these days, and it is much better if you explore your options and look for the best deals that offer the lowest interest rate.  In this way, you can save a lot of money, since the lower your rate of interest is, the less expensive the cost of borrowing your desired money from your lender will be.


  1. Watch out for penalty charges


– I once experienced this when I simply forgot to pay my monthly dues on time; I was charged with a penalty that almost drained my month’s income. Aside from the usual interest rate of 10% of my personal loan, an additional 5% was added due to my penalty charges. That would have been the usual rates here in the Philippines, but it roughly depends on the lending company you’ve been negotiating with.  If I were you, just pay on time.


  1. Limitations on how you spend your money

– For secured loans, what you had applied for loan for is intended for that purpose alone, for example, in buying a house; with unsecured loans, or personal loans rather, you can spend the money on other purposes. Just to be sure though, since lending companies vary from one another, it is still best to ask regarding their limitations on the money’s usage.


7. The reason for getting a personal loan


– You must take into mind that the reason for your personal loan is short term.  Some people rush themselves into applying for personal loans over material things whose benefits are just short-lived. Thinking about it carefully helps you to decide if you really have to apply for a loan or not.


Maricor Bunal has been a Project Manager and Content Writer for a long while. Her passion in writing is her main drive in crafting articles that are engaging, informative, and meaningful. Her partnership with Loan Solutions PH has given her a whole new opportunity to take writing to a whole new level.


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