4 Preparation Tips When Applying for an Online Cash Loan

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If you want to take out a loan, but don’t want to go through a stringent process, you can try online cash loans. You can do so from an online-only lender using their website or app, or from the online department of a traditional lender such as banks and similar financial institutions.

Compared to traditional loans, online cash loans don’t require in-person interactions with a banker or the lender’s representative. Also, many online lenders offer quick application and evaluation processes. In most cases, you may be informed of your loan application status within 24 hours. Most online cash loan providers also only ask for minimal requirements, which makes this option more attractive to people who have limited documentation on hand.

Nevertheless, “minimal requirements” doesn’t mean no requirements. While it’s easier to apply for a loan from online lenders, you still need to follow a certain process. As a loan applicant, you need to be ready to comply so you can get approved and gain access to the cash quicker.

From looking for an online loan app Philippines users can rely on to preparing the necessary documents, here are some tips you need to take note of when applying for an online cash loan:

 

Identify the Purpose of Your Loan

One of the first things you have to do before you take out a loan is to determine the purpose. Although online lenders are certainly more lenient, they may still inquire about the matter as part of the process. To help speed up your application, make sure you’re clear about the reason why you’re applying for the loan.

It’s also better to identify the specifics to be sure about the amount you need to borrow. For example, the amount for a loan to buy a new gadget can be lower than financing part of your travel expenses.

 

Consider Your Monthly Debt Payments

Before you apply for a loan, confirm if you have any existing debts as these can affect how well you manage your finances. If you're using about 50 percent of your take-home pay to pay off existing debt, you may find it challenging to time manage a new loan without compromising your daily living expenses.

If possible, pay off your other debts before applying for a new loan to make your monthly expenses more manageable. If you can’t close all your existing loans, then make sure to settle the payments on time each month to avoid interest charges.

 

Look for the Best Loan Rates and Terms

Different financial institutions have varying loan rates and terms when it comes to online cash loans. In the case of online lenders, they’re usually more considerate with regard to payment terms. Depending on the amount you’ll be borrowing, you can pay the loan off within 6 or up to 36 months. Do take note that the loan term can affect the interest rates. While a longer loan payment term may be easier for you to handle monthly, the interest rate is often higher. On the other hand, shorter loan terms have larger regular payments but come with lower interest.

Given this fact, make sure to explore what different financial institutions have to offer. Do your research and ask the lender if you can have a sample loan computation. This will give you a glimpse of the loan payments and visualize how they affect your finances.

 

Have Your Requirements Ready

When you’re applying for an online cash loan, the lender may ask you for certain requirements like a valid ID and proof of your income. Online lenders request for the former to identify the individual to whom they’re about to lend their money. It’s also one way they can perform background checks to ensure you have a trustworthy record as a borrower. Some valid IDs you can submit include government-issued ones such as your:

● Driver’s license

● Passport

● Postal ID

● COMELEC Voter’s ID

● Professional Regulation Commission ID

● Unified Multipurpose ID

Aside from your identification card, financial institutions also need to verify your income. They do this to assess your capability to pay the loan and other risks that can come with allowing you to borrow money. Depending on the lender, there are a few documents you can show as proof of your income. In case you’re employed, lenders may ask for a copy of your most recent pay slip, certificate of employment, or BIR Form 2316, which proves your salary has been subjected to income tax.

If you’re self-employed, prepare the Department of Trade and Industry registration of your business or the Securities and Exchange Commission registration of your company.

Although applying for an online cash loan is quicker than the traditional application process, it still requires some preparation. If you’re planning to borrow some funds, follow these recommendations so you can gather the requirements beforehand. More importantly, the preparations can help you manage your loans and finances better.

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