Personal Loan FAQ | BPI (2024)

FAQs

Do you have to say what you need a personal loan for? ›

The bottom line. Your reason for getting a personal loan is yours, but your potential lender can determine important loan factors based on that reasoning. Regardless of why you need a personal loan, compare lenders to see which offers the best personal loan rates based on your credit and needs.

The reason why you're borrowing could impact the terms of your loan, including your interest rate, available repayment terms, potential loan amounts, and more. Note that some lenders don't offer personal loans in certain scenarios.

Most personal loan lenders will require proof of income, even if they don't disclose their minimum income requirements. Only a few lenders, like Upgrade and Universal Credit, offer unsecured loans for a single borrower with no income verification.

Generally, no — in most cases, you don't have to report personal loan funds on your taxes. Unlike sources of income that you keep (such as your salary or wages), the money borrowed with a personal loan isn't considered income. Instead, this money is a debt that you'll have to repay in full to the lender.

The important thing is to be honest, most people take out loans for things such as paying for a wedding, home renovations or a car, so let them know your personal reasons.

Before deciding to get a personal loan, you must consider potential downsides, such as high interest rates, steep fees and a hit to your credit score if used incorrectly.

What reason is most likely to get approved for a personal loan? ›

And so, before you get a personal loan, think about what your credit scores your credit report can get you and what kind of expense that you are using. The most common reasons to get a personal loan include emergency expenses, major purchases, home repairs, or milestones.

What is the easiest loan to get approved for? The easiest types of loans to get approved for don't require a credit check and include payday loans, car title loans and pawnshop loans — but they're also highly predatory due to outrageously high interest rates and fees.

A personal loan applicant can be disqualified for having a credit score that's too low, insufficient income, too much outstanding debt or short credit history.

Court or solicitors fees. Gambling. Household bills, rent or a mortgage payment. Purchase of shares or other investment funds.

Personal loans can be used for just about anything. Generally, the only time you'll need to specify a purpose for your personal loan is if you're planning debt consolidation.

The important thing is to be honest, most people take out loans for things such as paying for a wedding, home renovations or a car, so let them know your personal reasons. A lender will not give a loan to you if you intend to use it for illegal activities or gambling.

You can use personal loans to pay for almost anything. You are specifically forbidden from using personal loan proceeds for a down payment on a home mortgage loan, and many lenders specifically disallow tuition and business expenses (although not all of them do).

No, personal loans do not require down payments. Personal loans are a form of unsecured debt, meaning they are not backed by a specific asset such as a house or a car. Therefore, unlike with mortgage and auto lenders, there's no requirement to put a down payment on any specific purchase.