A Filipino who works overseas (OFW) faces various challenges himself. Apart from being miles away from his family, he is also constantly worrying to protect his loved ones from financial setbacks. To counter such circumstances, there is a special OFW loan in the Philippines’ banks can offer.
But, it is not unusual that a person finds that his loan application has been rejected. It can be a setback, but there are some common mistakes that people do, which leads to the rejection of the loan.
There are various reasons why the personal loans in the Philippines are rejected. Some of the major reasons are:
- Loan Eligibility: There are a set of criteria that must be fulfilled to ensure that you are eligible to take a loan. These include age, income, employment, residence, etc. If the requirements are not fulfilled, the banks will not even consider you to be eligible for the loan.
- Mobile borrower: On many occasions, it occurs that a borrower moves around with his place of residence or work. Banks do not welcome such cases. Financial institutions like lending money to someone who is stable with residence and work. Therefore, stability in your residential and workplace address is vital.
- Falsified documents: Banks are very particular in their paperwork, and have a prescribed set of due diligence to look into the authenticity of the papers you present them with. If they find that the submitted documents are false, or their authenticity is doubtful, the loan is better forgotten. Submit documents after ensuring they are authentic to the best of your knowledge. It will ensure a fair processing of your loan application.
- Loan amount: It is often observed that applicants submit loan applications asking for money more than they can properly handle. It can backfire if the bank observes that you will be unable to service the debt with your existing sources of earnings and lead to a rejection of the application. What you can do is to find an online loan calculator to ensure the loan amount is within your reach, which can be serviced by you without affecting your standard of living. It also portrays you as an aware borrower in the eyes of a banker.
- Credit Scores: One major filtration criteria for the banks is to calculate the credit score of the applicant. Credit score uses your credit history to judge your creditworthiness. If you have defaulted any payments in the past, it will affect your credit score, which will lead to a rejection of your application.
Although you cannot mend a bad credit score in the present, you can always take precautions to ensure that your credit score does not degrade. It will ensure that you are eligible to take a loan in the future if you need it. Thus, here we saw five common reasons for rejection of a loan application. You should ensure you avoid these mistakes before applying for a loan.