A moneylender in the Philippines cannot grant your loan request if you do not have a stable source of income or you have a bad credit score. This usually happens to the people who keep on purchasing appliances, subscriptions and other expenses set on a monthly basis and failed to comply with the deadline.
You have to understand that the lender aims to secure their funds and need to confirm if the borrower can pay their debts on time. Moreover, to every individual who cannot avail of any types of loan, there is a collateral loan.
How does the collateral loan works?
For instance, if you cannot settle your debts, your assets will automatically belong to the moneylender. When you request and agree with a lender for a collateral loan, you are authorizing them that they have the rights to either sell your assets or take possession.
What are the usual assets commonly used?
To give you an idea about the usual assets commonly used for the collateral loan, it can be your investments, collectible items, vehicles, your employment salary, or worst your property.
What is collateral depreciation?
For example, you borrowed $50,000.00 and your collateral car values drop to $30,000.00 you still owe the lender amounting to $20,000.00. If in the case as the borrower, you can no longer pay the remaining $20,000.00 you must sell more assets to settle your debts or as much as you hate to do it, you should declare bankruptcy.
There are so many reasons why you need a loan, but not knowing the basics of it, you might place yourself at risks. Multiple moneylenders are available to grant you a collateral loan, but it takes a generous moneylender with a friendly payment scheme to prevent you from having a financial hardship.
Get to know first the moneylender, the policies and think of ways how to pay your debts. In this way, you can prevent the lender from pulling your car to your garage or any other assets you have offered to them.