5 Most Common Mistakes of First Time Loan Borrowers in the Philippines |
Posted: February 19, 2019 |
In a report published in the Bangko Sentral ng Pilipinas (BSP) website, the number of salary loan and personal loan borrowers increased by 19.8% in 2015. While there is nothing wrong with getting a personal loan, many first time borrowers commit avoidable mistakes that led them into debts. Personal loans are handy, but every borrower has the responsibility to plan their loans and handle them efficiently. Here are the five most common mistakes when applying for a personal loan. Accepting the first offerWhen you search online, you will be overwhelmed with numerous online loan lenders offering various loans. Naturally, all of them will claim that they are the best. Don’t get tempted to apply to all and then choose the first offer that you get. Don’t get scared thinking that you might not get other offers. Accepting the first salary loan offer is too risky especially that you did not readily check if the lender is actually registered. Before you apply for a salary loan, you must take the time to shop around. Check if the online lender is really a licensed company. Research further to know how long it has been in the lending business. Scrutinize the website. Does it have a padlock icon beside the URL? This icon indicates that the website is secured and protected from possible Lying about the salaryWhen you apply for a loan, it is tempting to lie about your salary and make it seem higher. This way you will get approved for a higher loan amount. Unfortunately, this leads to two negative scenarios. Either the lender discovers that you lied and you get automatically declined, or you get approved but you could not handle the loan responsibility due to lack of income. Not asking questionsBefore you sign your loan contract, it is best to read the terms and ask about the things you do not understand. Do not hesitate to ask for any clarification. In fact, reputable lenders appreciate borrowers who would want to know more about the loan. This can prevent confusion in the future. Not using the loan calculatorA loan calculator will help you know how much you can borrow and if you can handle the repayment with ease. Add to that, there are handy calculators which also shows you the repayment terms and the possible due dates. This way you can plan your finances well and avoid late payments. Not knowing more about the credit scoreAs a first time borrower, you should know that your cash loans in the Philippines can directly impact your credit score. Your credit score is derived from your previous loans and how you have handled its repayments. If you fail to settle your loan on time, you will get a low credit score. Most lenders and banks use credit scores to know a person’s creditworthiness. If you are good with handling your first loans, you can get better loan offers in the future.
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