How to Get Easily Approved for a Bank Loan

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.