Loan Requirements

• Financial Institutions - are intermediaries between sources and users of funds
• 5c's of Credit - set of criteria to determine whether a borrower is eligible for a loan
• 5c's of credit

  1. capacity
  2. conditions
  3. character
  4. collateral
  5. capital
• Basic Requirements for Loan Applications

  1. Loan Purpose
  2. Personal Information
  3. Financial Statement/bank account/payslips
  4. credit history
  5. outstanding loan and other debts
  6. collateral
• Loan Purpose - the underlying reason of the borrower for pursuing a loan or mortgage
• Personal Data Information - establishes the legal identity of the borrower with whom the financial obligation will be tied to
• Financial Statements/Bank Account/Payslips - show the applicant’s sources of income or funds
• Credit History - indicates the applicant’s character as a borrower
• Outstanding Loans and Other Debts - indicates whether the applicant can afford to take additional obligations
• Collateral - can be in the form of houses/lots, cars, credit cards, ATM cards (salary), or savings account
• Thrift Bank - ●established to promote economic development ●offers lower interest rates
• Rural Bank - grant loans to members who are farmers, fishermen, merchants, and cooperatives
• Cooperative Banks - differ from rural banks in terms of proprietorship
• Insurance Firms - offer loans to those who have permanent and whole life insurance policy
• Pawnshops - offer loans based on appraised value of item being pawned
• Venture Capitalists - funds startups and business expansion
• Microfinance Non-Government Organizations - ●funds startups and business expansion

  ●to provide funds to poor members of the community who cannot afford the high interest and tough requirements of banks
• Offer lower interest rates - GSIS, SSS, HDMF
• 5C's of Credit - criteria set by lending institutions to evaluate the creditworthiness of an individual or an entity applying for a loan.