In today’s fast moving world, accomplishment of needs and desires is not an effortless task especially when you are living in a country like Philippines.
As we all know, human needs and demands are never concluding, but the resources that are around us are always scant. Fulfilling all the human wants in such scarce resources is a matter of challenge in this day and age. Each of us is running a race for the achievement of our demands and desires. All of us at some time need financial help for boosting business, home renovation, dream vacation, education, car loan and home loan etc.
Taking loan is not a simple paper work; one has to consider several factors before applying for it like how much amount to take, from which source to take, how to repay the amount etc.
In today’s competitive scenario, you will find numerous options from where you can get the loan on easy rate of interest and low formalities. Here you will find some useful tips which you must deem before taking loan.
1. Determine the amount you actually need.
You must have a good handle on how much amount you need before taking loan because it is you who has to repay the loan.
2. Think on how you will repay the loan.
Before taking loan, you must prepare your cash flow projection in order to know the true and real financial requirement and cash inflows from where you will have to pay the interest and the principal amount.
3. Assure your collateral security.
Before going to bank you must judge your collateral asset. Therefore, you must be sure that the amount you are demanding will be sanctioned for your security.
4. Assess yourself in advance.
You are going to hurt yourself if your loan is rejected. It is better to judge yourself in advance to avoid facing the rejection. There are various factors which you have to fulfill in order to get the loan. (Editor’s Note: Such as but not limited to how you handled your previous credits and loans).
5. Check the ability to fulfill requirements.
It is very essential for you to check whether the amount you are taking is fulfilling your requirement or not. If yes, go for it and if no, then you should hunt for other options.
Now that you are prepared to take a loan, your next step is to consider the legality of doing it since it is the right way. Taking loans in the Philippines is a regular habit and looking at legal regulations before taking loans from any bank or institution is a must.
The law regulations follow the legal literature. The lender’s contract obliges to provide the borrower a sum of money or an agreed reasonable subject that is available. The loan agreement therefore already comes into force like the agreement between the parties. But how would you do loans in the right way? Understand the succeeding explanations.
In following the theory of real contract, the lender must sweep the loan that he ensues to the borrower since the loan agreement is not a reciprocal mutually binding contract according to this theory. The contract comes into existence only when the lender has done the loan proceeding to the borrower while the obligation of the borrower is to pay for the loan. The money returns together with conditional interest that arises when a real contract has validity. It is only until the date which the borrower has the time to give the money back.
All loans in the Philippines pass through legal system and the law of obligations in modern regulations represents this theory. The pecuniary interest loan is a mutual agreement. Besides, the unpaid loan is a bilaterally binding contract. Under the modern law of obligations, the legislature and the legal nature of the loan agreement converts into a mutual agreement. It also has the provisions for loans and for property loans separately. At the same time, the right of the consumer of loan agreement is set between an entrepreneur (a bank) and a consumer in closed loan agreement. The Consumer Credit Act gives regulations about agreement between two sides.
Loans in the Philippines are subjected to consultation. With any contractual agreement where concerning the essential negotiation is necessary, there is the question about the amount of the monetary aspect. It makes business available to the end and asks a return of funds. With cash loans, an interest rate is generally agreed wherein the borrower must pay the loan for the period of one year.
If there is the term of less than one year, the interest shall be payable at the refundable amount. Within the framework of freedom of contract, an additional loan fee will be agreed. The amount of the loan determines this. It also varies from bank to bank. As an object of property, loan comes into consideration as a fungible matter. The meaning of a property loan is in contrast to the tenancy that the lender gives the title to the loan deal. The borrower is therefore entitled to the thing to consume it or to resell it. After setting of the loan ratio, the borrower must repay the property in a reasonable amount of the same type and quality.
The contractual relationship between lender and borrower is a continuing obligation. If the borrower is obliged to pay an interest to the lender, it is a mutual contract. In a gratuitous loan (loans among members), there is no mutual agreement, because the obligation to make restitution is not taken into consideration in the case of reception of the loan. If the parties do not specify a date for refund, the due date will depend on a termination with the announcement period of three months. If they agree on a fixed term, both of them can prematurely terminate the loan agreement. This is possible only in the statutory or in agreed cases of canceling consensus.
Loans become ineffective due to usury, and the immoral or profiteering action is the thing to avoid according to regulations. This usually occurs in all legal transactions where performance and reward are in a particular mismatch. In the conditions of usury, the agreed interest on the market is normally dealt in interest rate by 100% exceeds (24% per annum instead of 12%).
Therefore, in taking loans, you should always consider preparations, the legalities and the institution from which you are planning to take loan. By and large people do not handle this process seriously but you should not repeat the same mistakes to avoid charges that are irrelevant and misleading. Do you need to take a loan now? Knowing that you are now prepared for it, just do it the right way.
Maricor Bunal has been a Project Manager and Content Writer for a long while. Her passion in writing is her main drive in crafting articles that are engaging, informative, and meaningful. Her partnership with Loan Solutions PH has given her a whole new opportunity to take writing to a whole new level.