Things to Consider When Applying for a Loan

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Online cash loans are very attractive means of getting quick cash in times of financial emergencies. But before clicking that link or downloading that app, here are some things that you need to consider:

Loan Requirements

Do you have the required documents to apply for a loan? Loan requirements may vary from one financing institution to another.

Loan requirements usually include:

  • proof of identity (government IDs, birth certificate, etc.)
  • proof of income and financial background (payslips, bank statements, banking history, etc.)
  • proof of address (billing statements, rental agreement, various types of registration that reflect your residence)

These documents are necessary in any loan application so the financing company knows that you’re not a fraud, you’re capable of paying back your loan, and you have a legitimate address in the country where you’re applying for a loan.

Monthly Interest Rate

Always ask how much the interest rate is on the loan you wish to take, and compare it to other loans from other lending companies.

Sometimes, loans can look good at the onset due to the low monthly principal and interest. But consider subtracting the amount of the loan you wish to take from the total repayment amount of the loan (principal + interest), and ponder whether that amount is the lowest among your options and if you’re willing to pay as much.

Consider Annie’s Bedroom Package Story below:

“I was offered a special loan of P28,800 by the shop’s inhouse company. With the cash out of P6,200, my monthly payment is P3,434 for 12 months. My other option was borrowing P35,000 with monthly payments of P3,500 for 12 months. For Option B, I only paid P7,434.04 of interest, while I would have paid P12,408 of interest for Option A. That’s almost P5,000 in savings!”

Mode of Payment

Have you tried paying your loan on time but repayment channels are all offline, closed, or simply unreachable?

Check whether the loan provider has online and over-the-counter payments that are convenient for you. Also check the billing schedules to make sure that it fits your budget, salary pay out, etc.

Cancellation, Penalties, and Other Terms

In the event that you cannot pay your loan on time, penalties or cancellation fees may apply, depending on how many days you’ve missed payment.

Check the loan agreement or terms and conditions to know how much the penalties are for late payments, how many days you can delay your payments, and how much you will have to pay if you decide to cancel your loan.

Choose the loan provider that gives you the most amenable and lowest terms.

Monthly Budget

Lastly, always check if the monthly repayment amount fits your monthly budget. It can be difficult for you in the long run if you won't be able to pay your loan on time. It can result in penalties and a bad credit rating, if not addressed as soon as possible.

Looking for credible cash loan providers?

UnaCash offers low-interest loans in flexible terms which you can use to pay bills, in medical emergencies, in leisure, and more! Download the app now!

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READ MORE: How to improve a bad credit score

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