FIRST TIME TO LOAN – WHAT SHOULD YOU PAY ATTENTION TO?

FIRST TIME TO LOAN – WHAT SHOULD YOU PAY ATTENTION TO?

Loan Newbie Must Read

Hong Kong’ speed of lifestyle is fast and life is full and varied so it is hard to survive if you don’t have enough money.

For example, many people always accidentally over spending by using credit card or want to buy an expensive stuff without installment payment or want to run a small business (e.g. open online shop or overseas purchasing agent etc.). Above situations all require some cash flow in order to make it success.

If you borrow from your family, it is hard to ask; if borrow from friend, you may not able to borrow much money; apply for mortgage/ mortgage asset; it is fear that if you cannot repay the loan you may lose all your collateral! Not to mention credit card cash advance as the total interest must be very high!

At that time, personal loan may help you. But if you have never tried to apply for personal loan, you shouldn’t just randomly search for any loan company online. Below we are going to help every loan newbie to check out what should pay attention to:

1. Ignore Terms and Condition

1. Ignore Terms and Condition

Recently many loan companies launch sales like cash refund to attract customer to apply loan.

For example, their advertisement wrote:” New customer loan instant get $3,500 cash”

At first glance, cash refund seems quite attractive but if you pay attention to the terms, you will discover that you have to fulfill many requirements in order to receive the $3,500 cash. Those requirements actually are hard to fulfill, for example loan amount must be $300,000, APR almost near 60%, repayment period must be 6 year or above etc. If the loan company really offers this kind of terms to you and you sign with them then it will highly affect your TU grade. What’s more, you will be very stressed as the repayment amount is very high.

Therefore, you must read carefully about all terms and condition before applying any loan. Moreover, you should choose the loan company which allows you to cancel application during application process and don’t receive any service charge or additional charges so that you are hundred percent safe.

2. Wrongly Picked 3rd or 4th Tier’s Loan Company

2. Wrongly Picked 3rd or 4th Tier’s Loan Company

Maybe you may ask what’s wrong with 3rd and 4th tier’s loan company? They are just not famous at all, maybe their interest is lower! I can reply you: You are still too young.

3rd & 4th tier loan company are not only infamous but also have another meaning which is their ways of collecting loan are extremely terrible!

For example,

1. Pour red oil paint to debtor’s home or harass neighborhood. (Drama always show this kind of scenes)
2. Everyday call tens of times to debtor, his family, friends & colleague etc.
3. Send many threatening letters

And many many……

This kind of collecting debt ways aren’t under fully legal regulation and collectors are well-experienced so police is hard to follow. I believe that nobody would like to try…therefore every loan newbie should be careful when choosing loan company. (Concerning how many days of overdue will lead to loan collect, it depends on different company. I understand that you may not mean to repay late but no one know about accident. Sometimes you may reply late for 1 or 2 days accidentally, after that how they collect loans, everybody should be careful!)

How to definite whether a loan company is 3rd or 4th tier

How to definite whether a loan company is 3rd or 4th tier!? Basically, there are few common points that you can be aware of:

1. Do not check TransUnion report
-TU report reflects your past loan record (For example, amount of loan & credit card, repayment period, repayment record etc.). Most approval manager of loan company according to TU to decide whether or not to approve the loan application. If the company approve your application without checking your TU which means it accept rather bad debtors…

2. Accept Client who are IVA, DRB or Bankrupting
– As 90 percent of this kind of client are over debt and unable to repay debt so it is not hard to figure out how bad is the company who accept their application.

3. Ask for Too Much Personal Information
-Request you to provide family, relatives, friend’s name, phone number and even address. In addition, it requests for almost 20 people’s information. – Ask you usually go to where to shop, where to eat etc.… (This kind of company usually has less customers so they are afraid that if you refuse to repay. That’s why, they ask for more information in order to find you to repay loan.

If you want to know more about ” What is TU”, you could go to this link:What is TU?

3.Apply Without Comparison

When you go shopping, buy electronics, dining, you may shop around. When it comes to apply for personal loan, there is no get rid of comparison too.

There are so many loan companies in the market providing different maximum loan amount, interest rate, sales, cash refund and repayment period. But one thing that you should remember:

Suggest only applying for 3 loan companies at the same time!
Suggest only applying for 3 loan companies at the same time!
Suggest only applying for 3 loan companies at the same time!

It is very important so speak for 3 times!

3.Apply Without Comparison

Not because of shop around for 3 so suggest you only apply for 3 companies, it is because every application you made for, the loan company will check your TU. (As above mentioned, it is advised that don’t apply loan company which do not check TU)

TU records how many loan companies that you applied for. If you apply for many companies at a short period of time (or apply for credit card). TU may think that you suddenly need a large amount of money. If borrow this large amount of money, repayment ability will be a problem. Your TU grade will be lowered. It is because TU doesn’t understand that you are just comparing which loan company is better. Therefore, apply for 3 companies at the same time is enough.

Every loan newbie must be careful when comparing different loan companies and pay attention to all main terms and conditions before application. You must think twice!

4. Act on Impulse

The main reasons for small amount of loan are wanting to buy goods but having not enough money, repaying credit card debt (due to high interest of credit card min pay), small amount of start up business (e.g run an online shop), small medical expense or personal issue.)

Don’t borrow money on impulse. There are few aspects that you could consider for reference:

1. Could you afford it?

– If you borrow money due to over shopping then you should ask yourself that could you confirm not to over spend later?

If you keep the same spending habit, the act of borrowing money is just an endless loop. Each month’s payment will be larger, payment become imbalance. No company or friend is willing to help you, the worst is bankrupt.

2. Do you really need this amount of capital?

-Sometimes people are easy to get lost. We may not be able to find out what is necessities and what is unnecessary. If it is necessities like washing machine, refrigerator or micro-wave etc. They are must-buy.

If it is non-necessary like buying car, buying sneakers/ cloth, buying handbag or other luxury items. Therefore, everybody should think twice that are you really like it and evaluate whether you can afford it or not.

3. Borrowing large amount of money, interest is so high, is it worth it?

-Same as 1st and 2nd point, but it is about large amount of loan like $500,000 or even $1,000,000 above etc. The interest of large amount of loan is extremely high. It is usually for property or running of business therefore everybody should think twice whether you need the money as the interest is usually $100,000 to $200,000 or even more! (Each loan company offer different interest) …

4. Act on Impulse

To conclude effects of above impulse loan:

1. Borrow more/ keep borrowing result in high interest and affect payment balance.

2. Once payment balance is affected, you may re-loan and keep loaning. Finally, you may repay late or escape payment then affect your TU record.

5. Not Enough Documents

Each bank or loan company has different loan requirement so you should know about the requirement of documents before application for loan. For example, if a loan company require a business registration certificate in order to get a large amount of loan approval but if you don’t have it, then suggest you not to apply! It is because you choose a unsuitable loan company, you have to apply for another company…

As above mention, when you apply loan through many loan companies or credit card through banks, your TU may be affected. Don’t think I am so repetitive as it is very important that I have to mention again. Hope every newbie could remember it.

Below documents are requested by most company:

1. Income Proof Document

If you are wage is paid by cash or you’re housewife….most banks or loan companies don’t accept your loan/ credit card application. Since you don’t have income proof document, loan company doesn’t believe your claimed income and thought that it is risky. As a result, it will reject your application.

If you are the above mentioned 2 kinds of people or others who cannot provide document of income proof due to other situation, you could consider Cashing Pro’s Non-Income Proof loan, hope it is useful to you. ^^

No-Income Proof Loan

2. Hong Kong Permanent Identity Card (with 3 stars) & Hong Kong Passport

Although most Hong Kong people fulfill this requirement but if you are new migrant from Mainland China and have stayed in Hong Kong for less than 7 years then your identity card should have no 3 stars. If you are foreigner although you stayed for 7 years but don’t give up original home country’s passport (which means you don’t have Hong Kong Passport), it has a high possibility that your application will be rejected by bank/ loan company. Besides, it has no relation between racialism. It is because you’re not 100% Hong Kong people (no 3 stars/ no Hong Kong passport), you have the right to leave Hong Kong permanently. Some bad customers maybe run away therefore it is understandable for bank or loan company to have this requirement.

3. Proof of Mailing Address

It is so interesting that when you don’t want to receive the mailing address, you always receive it but when you want to receive it, suddenly no company send to you or you have wait for long time to receive it.

Every day we receive many letters but many Hong Kongers just throw it. When you really need one however you cannot find it. Same rule, most bank and loan company require one original copy of mailing address proof. If you don’t hand in, they may think that you have a risk of run away! Then they will not approve your loan or credit card application!

5. Not Enough Documents

Many people think that making a false wage record could deceive all people’s eyes or even pretend high wages in order to loan a higher amount. In fact, the loan approval of all banks and financial company are very strict. Once discover any inappropriate, they may request you to leave office telephone number/ address for backup. If you really have no work then you may have nothing to say. If you refuse to give the information, they may usually reject your application. If you steal or impersonate other’s information to apply for loan, bank and loan company normally may reserve the right to take legal action. Therefore, everybody should not commit any illegal things because of money flow.

Cashing Pro fully understand every Hong Kongers have different situations & problems so we specially provide 4 different kinds of loan products to cater to the needs of different people:

Express Loan Maximum loan amount can be $300,000!10 minutes approval!

Student Loan Specially for university & tertiary student, no income proof needed!

Credir Card Loan Calculated in single interest, interest is cheaper than credit card min pay!

No Income Proof Loan No need work / income proof document!Simple loan application!

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