7 Questions to Ask Yourself Before Taking Out a Bank Loan

Taking out loans from EastWest Bank can be a smart financial move, especially when it helps you invest in things that build long-term value, like a house or another type of real estate, or necessities you can’t easily save up for quickly, such as a car. 

However, borrowing money comes with responsibilities. You need to understand the terms, including interest costs and payment schedules, and only borrow what you can comfortably repay. Before committing to any loan, it’s essential to ask yourself these key questions to determine if it’s the right decision to make:

1. What’s My Purpose?

Why do you need this loan? Do you want to buy your dream car, finance your education, or fund a promising business venture? Having a clear purpose ensures you choose the right type of financing. 

2. Which Option Fits My Needs?

Different lenders, including EastWest Bank, offer a variety of financing options. If you’re looking to buy a car, EastWest Bank’s Auto Loan might be an excellent choice because it offers competitive rates, flexible payment terms, and affordable downpayment options. For aspiring homeowners, our Home Loan can help you acquire properties ranging from houses and condominiums to vacant lots. Meanwhile, a multi-purpose Personal Loan provides up to PHP 3 Million for various needs, whether it’s for your dream family vacation or starting a business. 

Explore these options to ensure you’re making an informed choice that aligns with your goals.

3. Am I Eligible for the Loan?

Before applying, determine if you meet the eligibility requirements. EastWest Bank, for example, considers several factors, such as your age, citizenship, and income stability. Filipino citizenship is required, along with proof of steady earnings from employment or a business. Your gross monthly income must demonstrate that you can comfortably repay the loan. So, ensure that your income documents, such as payslips or tax returns, are up to date. 

Evaluating these factors ahead of time can save you from unnecessary rejections and streamline the application process.

4. How Much Should I Borrow?

Calculate precisely the amount you need. For example, if you’re planning to take out a personal loan for home improvements, account for the cost of materials, tools, labor, and unforeseen expenses that might arise. If you’re planning to buy a car, consider not just the purchase price but also associated costs like insurance, registration, and maintenance. 

Determining the right loan amount is crucial. Borrowing too little might leave you needing additional financing later, but borrowing too much can lead to higher interest costs and financial strain. A good rule of thumb is to borrow only what you can repay comfortably within the loan’s term. Aim for monthly repayment that does not exceed 30% of your disposable income. 

5. How Do I Apply for the Loan?

The application process for EastWest Bank loans is designed to be simple and accessible. Start by selecting the rate, term, and payment option that suits your needs. Completing and submitting the application form is the next step, followed by waiting for confirmation from the bank. 

To expedite the process further, prepare supporting documents such as valid government IDs, proof of employment, and income verification documents. Have everything ready in advance to make the process smoother and increase your chances of a quick approval.

If this is your first time applying for a loan, don’t hesitate to reach out to EastWest Bank’s customer service team. They can guide you through the process, clarify any doubts, and ensure you’re providing the correct documents. This proactive approach can save you time and effort while boosting your confidence as a borrower.

6. What Will My Total Repayment Be?

Understand the total cost of the loan, including both the principal amount and the interest accumulated over the loan term. While longer repayment periods often result in smaller monthly payments, they also lead to higher overall interest costs. 

EastWest Bank offers home loan calculator and auto loan calculator tools, allowing you to see how different loan terms impact the total repayment amount. 

7. Can I Manage Repayments Responsibly?

Responsible repayment is a key part of borrowing. Missing payments can lead to penalties, so it’s important to stay on top of due dates. Setting up automatic payments through your bank account is a practical way to ensure you never miss a deadline. 

Regularly review your finances to ensure you can manage monthly payments comfortably. If necessary, consider adjusting your expenses or re-evaluating the loan amount to avoid financial strain.

Additionally, build a buffer in your budget for unexpected expenses. Life happens, and having an emergency fund can prevent missed payments in case of unforeseen circumstances like medical bills or job loss. 

Why Should I Choose EastWest Bank?

Selecting the right financial partner is just as important as choosing the right loan. 

EastWest Bank offers a variety of loans tailored to meet diverse needs, with flexible terms. Whether you’re buying a car, securing a home, or funding personal expenses, our bank’s comprehensive options and customer-focused approach make the loan process straightforward and stress-free.

Ready to take the next step? Explore our loan options online or drop by a branch to get started today.