Before applying for the loan, you should look at many aspects either from your site or lender site. there are helpful 10 questions that can have you to do pre-assessment by yourself before applying for the loan.

1.How much should I borrow?

The minimum and maximum borrowing limits are set by each lender and the amount of your loan limit depends on your creditworthiness. Ask yourself about your needs. If you’re taking out a loan for something just nice to have, like a vacation, you might want to consider building towards that goal by opening a high-interest savings account. However, if you’re consolidating debt which you got from buying a new house or buying land or start-up or expand your business. Borrowing more money than you need ends up making the loan more costly over time. To calculate how much money you should borrow, add up all your debts to come up with the best of an ideal loan amount.

2. How long will it take to get the money?

Depending on the loan amount, type of loan and application time frame, there may be a waiting period before you receive funds. Some loans process within 48 hours, but others such as home loans may take a bit longer like 1 or 3 (week). Take these periods into account when deciding which loan product to apply for.

3. How do I know what my current credit score/credit history is?

Your credit score/credit history is a major factor in determining whether the lender will approve your loan application since credit is an indication of your ability to responsibly repay the loan. All your loan repayment history was recorded at the Credit Bureau of Cambodia (CBC) whether you paid late or on time. . If possible, check your credit report before applying. Dispute any inaccuracies in your credit report to ensure the most accurate representation of your creditworthiness.

4. What is the interest rate on the loan?

Depending on your credit score and other factors, the interest rate may impact your decision to borrow. Think of an interest rate as an expense for borrowing money from a lender. The amount of interest is bundled with your payments. Be sure to ask about how the interest rate affects the cost of borrowing the loan before signing the paperwork.

5. How does the loan repayment work?

Your repayment plan, usually monthly, will impact your day-to-day finances. Is it set at a rate you can handle without worrying about missing a payment? Your monthly payment will depend on the amount of the loan, interest rate, and term of the loan. Make sure you know your monthly due date and when those payments start. The monthly payment should not exceed 40-50% of your monthly income. Additionally, you should also ask your lender if there are penalties for prepayment or early payoff and how much is it.

6.What is the term of the loan?

It’s important to consider the term of the loan and whether it works for you in the long run. If you don’t mind paying a larger monthly payment, you may want to choose a shorter timeline. On the flip side, taking out a loan with a longer repayment timeline usually grants a smaller, more affordable monthly payment.

7. Are there any fees?

Some lenders offer loans that include origination fees, which are a percentage of the loan amount. Some banks also call this a processing fee. Is there any hidden fee that the bank will not disclose yet? Make sure to factor these in to decide whether a loan is worth it.

8. Does the loan require a guarantor?

Some lenders may guarantor a guarantor on a loan, which could help an applicant get approved for the loan. With a guarantor, if something happens and you are unable to make payments, the guarantor can be held responsible for the repayment of the loan.

9. Does the lender allow to have a co-borrow?

There might be a good opportunity for you such as buying a home, but your income is not enough to get the loan amount you have planned. Does the lender allow you to bring your family member in to share your responsibility to pay the loan? They will be called co-borrower. Please note that co-borrow must have a stable income that could handle the monthly payments for their responsible amount.

10. Is this a trustworthy lender?

Check the lender’s history and reputation through visiting their website or social media channel, if it is working under National Bank of Cambodia licensed. The formal financial institution will provide loan products that adhere to high-quality standards​ and to client protection principles. Some of them even provide a grace period to clients when they face short term financial hardship. Credit to: www.santanderbank.com/