Common Personal Loan Application Questions You Need to Prepare for
By: Venus Zoleta
Published on: August 7, 2019 . Last updated: December 16, 2020 Category: Personal Loan
A personal loan application is like any job application. As a prospective borrower, you do your best to prove you’re a worthy candidate for the lender’s money. The loan application form is your resume, and the requirements you submit are like your portfolio.
And then there’s the dreaded interview portion. Are you ready for it?
Aside from the information you provide in the application form, the lender will need to talk to you in person or over the phone to verify your eligibility and documents, especially if you’re applying for a business loan. This is part of the background check or credit investigation that banks and lending companies conduct to determine a borrower’s creditworthiness. It’s also an opportunity for both parties (the lender and the borrower) to ask personal loan questions and make sure they’re fit for each other.
Before that important call props up, anticipate the questions that the lender might ask, come up with sensible answers, and rehearse with a friend if you must. It’s better to be over-prepared than be caught off guard with an unexpected question during your interview.
Here are the personal loan questions a lender typically asks that you should be prepared to answer.
Table of Contents
1. Can You Confirm Your [Personal Information]?
The first personal loan questions that a loan officer or agent asks have to do with identity verification. The lender has to make sure that you are indeed the person who filed a personal application with them.
Usually, loan applicants are asked questions to confirm the information they provided in their application form, including the following:
- Complete name
- Landline/mobile number
- Email address
This part of the interview with the lender will take just a few seconds, so you should be able to breeze it through.
2. What is Your Job and How Much Do You Make?
In addition to your personal information, your employment history and income details will also be verified.
The lender needs to know where you work, what your job position is (entry-level/manager-level/executive level), how long you’ve been at your current job, and how much salary you earn.
On your part, you have to prove you have a stable source of income. It helps to highlight things like working for the same employer for a long time and to provide details about any additional sources of income such as a part-time job or side business.
It is a personal loan myth that only employees can apply for a loan. If you’re an entrepreneur or freelancer with various income sources, it’s challenging to prove that you have a steady stream of inflow of cash that will enable you to repay a loan. Be detailed when giving your answers to personal loan questions. You may be asked to provide additional documents (like a certification from your clients) to back up your application.
3. Why Do You Need a Loan?
This personal loan question is already answered on the application form—why does the bank have to ask about your loan purpose again? The phone or personal interview is the lender’s chance to get a more in-depth answer from you on how you plan to use the money you’ll borrow.
In the application form, you just check a box to indicate your reason for needing a personal loan. But in the interview with the lender, you’ll have to be more detailed about your loan purpose.
If you need a loan for your small business, will it be used for buying a piece of equipment that’s crucial for your operations? Will it go to expanding your business, like hiring more people?
It’s good to establish a real and valid purpose for taking out a personal loan. If the money will likely be used for any unnecessary or frivolous expenses, then your personal loan application might end up in a rejection.
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4. How Much Money Do You Need?
This question is tied up with the previous one about your loan purpose. Considering your need for cash, how much will it cost you to meet that need? You must prove to the lender that you’re borrowing only the necessary amount—no more, no less.
Although you’ve provided this piece of information in your personal loan application form, you might still be asked this question again to confirm how much you intend to borrow. This will also provide more context to the loan amount you indicated on your form.
Still not sure about how much you should loan? Use an online loan calculator to determine how much you need to borrow and how much you can afford to repay.
5. How Will You Repay the Loan?
Of course, lenders want their money back with interest. The lender may have different means to evaluate your capacity to pay back a loan, such as checking your credit score and reviewing the income documents you submitted.
However, expect to be asked this tough question. Your response must assure the lender that you’re capable of paying back what you owe on time. For example, you may establish that a part of the revenue you’re earning from your business is enough to pay your monthly amortizations.
6. Do You Have Any Current or Past Loans?
Your existing and past loans—including all your credit cards, government loans (SSS and/or Pag-IBIG loans), housing loan, and car loan—are part of your credit history, which lenders need to check to decide if you can repay a loan.
Be honest when answering personal loan questions like this. Do you have any existing and recurring debts? As long as you can prove that you can pay them off, including the new loan you’re applying for, then you have nothing to worry about.
Tip: Be extra careful when providing your credit card details. Refrain from giving your full credit card number, security code, and other sensitive information. The lender will just ask for the first or last few digits of your card number.
Acing the interview helps remove any doubt about your creditworthiness as a borrower. With ample preparation before answering the lender’s questions about your personal loan, you’ll be able to establish your financial stability to make loan repayments on time. You can clarify any inconsistencies in your information, which could help improve your chances of getting approved for a loan. Being prepared also shows that you take your finances seriously.
Venus is the Head of Content at Moneymax, with 15+ years of experience in digital marketing, corporate communications, PR, and journalism. She invests in stocks, mutual funds, VUL, and Pag-IBIG MP2. Outside of work, she’s crazy about cats and Korean dramas. Follow Venus on LinkedIn.