Three Things Every Millennial Must Know Before Taking A Personal Loan

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As a young Filipino millennial taking on the world for the first time you can easily get overwhelmed with all the demands and responsibilities that come with “adulting”. You need to get a job, pay bills, fuel and maintain your car, regularly revamp your house, go out on dates while ensuring you stay on course with your financial independence.

Most times you’ll find yourself sort of cash and only an emergency away from total bankruptcy. Luckily, you can now get a quick and efficient personal loan online to help you stay afloat. While you may shy away from taking up a loan for fear of not being able to pay back or you’re simply avoiding high interest rates, there are flexible personal loans in Metro Manila that suit your needs and have convenient repayment plans.

However, before taking up a loan, here are some things you should consider:

Your Ability to Repay the Personal Loan

While personal loans are quick and easy to apply for and get approved online, this only applies to borrowers who meet certain criteria and satisfy the entire lenders requirement. Two of the most important things a lender will check when reviewing your personal loan application are:

A Fixed and Steady Income

If you are employed on a permanent basis, then you have a much higher chance of getting your loan approved unlike freelancers or contractual employees who don’t have a stable source of income. A lender will therefore be assured that you will be able to repay your loan since you have a reliable monthly income. However, you still need to satisfy the other requirement, that is;

A Good Credit Score

You credit history can be the deciding factor of whether you’ll get a personal loan approved or not regardless  of the fact that you have a reliable source of come. Banks and online lenders will check your credit score and review the credit history to determine your borrowing and repayment discipline so they can weigh your overall capacity to repay the loan.
Lenders will compare your monthly income against your total credit repayments on existing loans to determine your debt-to-income ratio and establish whether you can pay off the extra loan that you are seeking.
Should you tick all the boxes, then the lender is most likely going to approve your loan.

Interest Rates

The other thing you should consider when applying for a personal loan is the interest rates charged against your loan. Interest rates are usually relative to your credit score, loan period and amount borrowed. Therefore, you should check whether the loan offer suits your borrowing needs and repayment capacity.

Savings Account

Personal loans lenders will not check your bank balance however, how much you have on your savings account can be a good indicator as to whether you are capable of repaying the loan if all sources of income fail to service it.
Putting these factors into perspective will help you make an informed decision when applying for a personal loan in Manila. When you finally get your loan approved, always ensure that you use it appropriately. Being disciplined with your loan will go a long way in ensuring your financial freedom.

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