To apply for a personal loan, one must prepare ahead to increase the chances of getting approved by a lender. 

Getting a personal loan is essentially borrowing money from a bank of your choice. This entails a loan term with actual terms and conditions that you agree on with the bank, among which is saying yes to paying interest either monthly or annually. As of May 2023, the average interest loan rates from bank loans in the Philippines are 7.66%. 

While getting a  traditional bank loan is cheaper than getting a loan via digital lending platforms or credit card cash advances, getting approved for a personal loan takes a more meticulous process. It's not uncommon to get rejected but you may increase your chances of getting your personal loan application green-lighted with careful preparation and research. 


Here are helpful tips to get your loan application easily approved:

1. Maintain a good credit score

Most lenders or banks will run a credit history review to determine how diligently you will pay your monthly payment. So, before you apply for a loan, be certain that you have a good credit score standing. If you are not there yet, you may try amending this by paying your bills on time or avoiding reaching your credit limit. A low credit score won't necessarily get you a rejection but know that the interest rates and fees you will be given will be too high to repay your loan so best to make it worth it.

2. Do your research and find the best loan option for you

Weighing the best bank loan choice for you starts with knowing what you are using the loan for. You may also have to look into the details of the loan terms whether it's a secured loan (with collateral) or an unsecured loan (without collateral). There are a lot of types of loans that can suit your needs with payment terms that you can manage. Pick a lender that you can trust and be sure to know which one offers the best for you. 

3. Know how much you need and how much you can pay

When you get a bank loan, get real with your numbers. Make sure you can pay off the loan amount you are borrowing. Computing your debt-to-income ratio will help you determine how much of your salary should go to your loan repayments. This formula also helps compare your monthly debt payment to your monthly gross income.

To calculate the debt-to-income ratio, divide your monthly total debt payment by your monthly gross income and then multiply the amount by 100. It's safe to keep your debt-to-income ratio low to improve your chances of approval. Lenders may be quick to turn down your loan application if the ratio is too high. Some local banks have an online loan calculator. You can use this tool too. 

4. Have a stable job

Before you take out a personal loan, make sure you have a steady income. It's common for banks to be extremely strict in checking your credit history and your capability to pay off a loan so proving that you have a stable source of income tremendously increases your chance of a bank loan approval. Most bank loan requirements include copies of your Income Tax Return, Certificate of Employment, or your last three pay slips.

5. Ready your documents prior to the application

Make sure to prepare ahead before submitting your loan application. Local banks may have different loan requirements so know your preferred lender's requirements and create a checklist to be aware of the items you need to submit. Be organized and diligent when it comes to completing this checklist and double-check your personal loan application form before you turn it in.

6. Have sufficient savings

To get a personal loan, banks may require your most recent pay slips, if not, your latest bank statement. To prove your strong financial capacity, show that you have enough savings in your bank and stay consistent in placing your funds in your savings bank account. 

7. Know a good debt from a bad debt

To have yourself approved for a loan, know whether you are taking out a good debt or a bad debt. Being in debt for something that will help you gain financial success, in the long run, is a good debt. Spending money on career advancements like enrolling in graduate school or money spent on capital for a small business are all examples of funding for potential future growth. On one hand, spending money on things that will depreciate in the future like vehicles or shopping for luxury items may be considered a bad debt. So, know the purpose of your loan and the loan proceeds before applying for one. 

8. Seek consultation

If you find yourself lost in the preparations for getting your best personal loan option, seeking a consultation with your bank or lender of choice will be sure to enlighten you. Pay them a visit or schedule a consultation.

​They will also be likely to point you to the type of loan you will be approved for.
In case you are getting a personal loan to fund a real estate property investment, it would also be wise to consult as well with your real estate agent or broker. They would likely be able to recommend good loan choices with the best personal loan rates convenient for paying off the property.

The task of taking out a personal loan is as daunting as getting approved by a lender. If you are determined and have a solid purpose for your personal loan, the application process, however challenging it may be, will not stop you. 

Making a first real estate investment comes with careful financial decision-making. Before finally deciding to invest in real estate, it's understandable that anxiety, doubts, and hesitation can be high. Having savings might not be enough to tell that you're ready to invest in a real estate property because of the other responsibilities that a property investment entails.

So, when is the right time to buy a property? How do you know that you are capable of taking on the risks of real estate investing? Read on below to know of signs that you are ready to manage and make an investment property. 

You know you are ready to buy an investment property when:

1. Your financial foundations are solid

A telling sign that you are prepared to pursue your first property investment is having your finances sorted out. That means having established a system for paying monthly dues and setting aside a portion of your income for savings. If managing your earnings is still an issue, property investment will just complicate your life. Keep in mind that having the skills to save up whether for property purchases or retirement is fundamental when it comes to real estate investing for beginners.

2. You have set your long-term financial goals

Before you get started on investing in property, you'll need a goal.  It will not be wise to start investing in real estate without a strategy and goal. One must take careful consideration of the ultimate picture of the future and know how a real estate investment or investments can help one reach a financial goal. Before you make your first property purchase, you need to make sure you know the following terms:

• capital growth - the increase in the market value of the property over time
• tax benefits - how will being a property investor put you at an advantage or disadvantage? Have an accountant on your side to check for depreciation, negative gearing, claiming interest on the mortgage, capital gains tax exemptions, etc. 
• cash flow - how much will be your yield all year round when you buy a property? What returns do you gain from the real estate purchase minus the costs you incurred to acquire and manage it? 
  
  

3. You know how to manage your debts

Being debt-free is ideal but knowing you are capable of not making loans pile up is among the signs you're ready to dive into property investing. The problem with acquiring debt is how it could easily deplete what you earn, especially ones with high-interest rates. One has to learn to be on top of bills and make sure payments are made on time. Settling loans prior to buying a property will spare you from a headache.

4. You have a stable income

Payments for any investment will come so having dependable regular earnings is important. Paying off those dues while capably sustaining yourself is key. Having a steady income also matters in getting home loan applications.

5. You are aware of your risk tolerance

Investment properties come with varying degrees of risks that relate to lending, managing the property, and the costs involved in the maintenance of a property. How many of these will you be willing to handle? Do an assessment. This will be a great opportunity to find out if you need to take a more conservative stance or if you can afford to take bigger risks. 

6. You have the right amount of cash buffer

Part of being a real estate investor is not overlooking a contingency or emergency fund for your property. A good landlord to your tenant is having ready finances for repairs and ensuring that your tenant is safe, secure, and can comfortably live in your property.

7. You have time to oversee your property

Owning a property requires time. Staying on top of repairs and yearly dues and legal work can be demanding especially when you are already juggling a full-time job outside your real estate venture. Investing in real estate will involve a lot of leg work and customer service so make sure you have time to spare.

Purchasing a property for the first time comes with sacrifices, hard work, and risks. Make it a worthwhile experience by reviewing these factors to ensure you are prepared for a long-term commitment.  

August is also known as the hungry ghost month when business finances hit a slump due to low trading activity, minimal financial dealings, and red portfolios or negative balances. It's a fact that Philippine stocks ended in the red with inflation going down further from 5.4% in June 2023 to 4.7% as of Friday, August 4. Call it superstition, but one cannot miss the timing of that.

The hungry ghost festival, which begins on the seventh month of the lunar calendar, roots in the Buddhist Taoist Chinese belief that the gates of hell open as hungry ghosts or spirits of the dead roam the earth.

The Chinese advise people to postpone investing, selling assets, and avoid making big-ticket purchases like cars and gadgets. Some individuals consult feng shui or make food offerings. Meanwhile, businesses ward off bad luck by observing several practices to avoid financial loss to the company and dodge misfortune. 
Whether or not you adhere to the observance of ghost month, taking precautions and following ghost month dos and don'ts, won't exactly do you harm. Ghost month is also a good time to look for other opportunities or to average down one's portfolio.

Here are helpful financial tips for surviving ghost month in 2023:

1. Review your business plan 

Ghost month may not be the best time to start a new business venture but the time can be wisely spent on assessing or checking in on one's business status and plans. Reviewing processes and making plans to improve operations can be a more worthwhile task than investing. Part of checking how you are faring is sitting down with colleagues to iron out plans and preparing for how to move into a new phase of the year.

2. Holding off on making big purchases during ghost month

Thinking of buying a new car or gadget but find yourself hesitating? Take ghost month instead as a time to think through your big-ticket items purchase especially if they are not needed.  The act of buying can attract bad luck because the spirits might be envious of your purchase. Perhaps you can save the money for a more worthwhile purchase in the future. Sometimes postponing gives you a chance to see the bigger picture. 

3. Make donations

While the Chinese believe that making big purchases during ghost month can cause bad luck, they also advise that it's the best time to build good karma. Donating or extending financial help to loved ones during the time of inflation can ward off bad luck or counter misfortune. 

4. Avoid getting new debts

Businesses can be affected by people holding off on purchases due to ghost month practices. This may impact the income of business owners. Do postpone taking unnecessary debts since cash flow might be unstable. Steer clear as well of paying off debts so limit credit card use and pay using cash. Hold off on getting a loan until times are looking up.

5. Build your contingency fund​

Whether you are in the process of building an emergency fund or have not yet, ghost month is the best time to work on it. Setting aside at least 10% of your pay each time you receive your income is the best practice. Of course, consistency and discipline are important. Ghost months may come only once a year but financial slowdowns or emergencies can randomly come. With enough money saved for rainy days, you'll never have to worry. 

Whether or not you believe in ghost month and the bad luck it may tend to bring financially, practicing prudence in daily spending is still a good habit to keep. These tips might be restrictive on one hand but also may be teaching a thing or two about one's personal finance,  investments, and businesses.