Tips for getting a bank loan approved | Bài thảo luận tiếng anh thương mại

1 TABLE OF CONTE NTS
1 . INTRODUCTION ......................................................................................................... 5
2 . OVERVIEW ................................................................................................................... 6
2.1 What is a bank loan? ............................................................................................. 6
2.2 Why do we need a bank loan? Ad vantages of bank loan ..................................... 6
2.3 How does a bank loan work? ................................................................................ 6
3 . TIPS FOR GETTI NG A BANK LOAN APPROVED ............................................... 7
3.1 . Understand Your Credit Score .................................................................................. 7
3.2 . Know Your Finan cial Situation ................................................................................ 8 3.3. Cho
ose the Right Loan Type..................................................................................... 8
3.4 . Be patient and pers istent ........................................................................................... 9
3.5 . Dress professionall y .................................................................................................. 9
3.6 . Apply with a co - applicant ....................................................................................... 10
3.7 . Discuss risk in you r application. ............................................................................. 10
4 . CONCLUSION ............................................................................................................ 12
REFERENCES ................................................................................................................ 13 2 ASSIGNMENT SHE ET Name Student ID Tas ks Đinh Lê Công H ậ u 21 D170296 2.3 Powerpoint Nguy ễ n Th ị Th u Hoài 21 D170298 3.6 3.7 Conlusion Word Phùng Th ị Thu Huy ền 21 D170302 Introdu ction 2.1 2.2 Ph ạ m Trung Hi ếu 21D 170014 3.4 3.5 Vũ Th ị Kim Ngân 20 D170032 3.1 3.2 3.3 3
GROUP 02 MEMBER EVAL UATION FORM Name Student ID Evaluation of th e leader Grade
Đinh Lê Công H ậ u 21 D170296 Successfully fulfilling the duties of a A ( Leader) leader.
Nguy ễ n Th ị Thu 21 D170298 Complete given task w ith minor revision. Hoài Meet the deadline. A
Good cooperative a ttitude with all members.
Phùng Th ị Thu 21 D170302 Complete given task w ith minor revision. Huy ề n Meet the deadline. A
Good cooperative a ttitude with all members. Ph ạ m Trung Hi ếu
21 D170014 Complete given task w ith minor revision. Meet the deadline. A
Good cooperative a ttitude with all members.
Vũ Th ị Kim Ngân 20 D170032 Complete given task w ith minor revision. Meet the deadline. A
Good cooperative a ttitude with all members. 4 1 . INTRODUCTION
People are always told that money makes the world go round, but the hard truth is,
many of us don’t eve n have enough of it to support our day - to- day needs. As a student,
parent, a regular inco me earner, or ev en as an entrepreneur, you must know that money is
hard to come by in la rge sums, and it is even harder to save it as the costs of dail y
necessities. No matter how much cash you ha ve saved on your own, you may not be able
to pool a lot of it toward b ig-ticket purchases for yo ur business or your personal expenses.
In situations like the se, obtaining a bank loan may be o ne of the wisest and
timeliest decisions you’ll make for either y our personal or your business - related finances. 5 2. OVERVIEW 2.1 What is a bank loan? A
bank loan is an amount of money borrowed from a bank for a set
period within an agreed repayment schedule. The repayment amount will
depend on the size and duration of the loan and the rate of interest.
2.2 Why do we need a bank loan? Advantages of bank loan A
bank loan can be needed for various reasons such as payment
for assets, funding a business, covering unexpected expenses, or investing in
education. Many individuals and businesses may not have the necessary funds
upfront to make large purchases or investments, so they turn to banks for
financial assistance. Bank loans provide a way to access a lump sum of money
that can be repaid over time, allowing individuals and businesses to achieve
their goals without having to wait until they have saved up enough money.
Additionally, bank loans can help improve credit scores and build a positive financial history. Advantages of bank loan:
• Clear loan terms: Interest rates and repayment amounts do not change during the course
of a loan; loan servicing payments remain the same throughout the life of the loan. This
makes it easy for businesses to budget and plan for monthly loan payments. Even if the
loan is an adjustable-rate loan, business owners can use a simple spreadsheet to
compute future payments in the event of a change in rates.
• No equity dilution: A bank loans money to a business based on the value of the business
and its perceived ability to service the loan by making payments on time and in full. Unlike
with equity finance where the business issues shares, banks do not take any ownership
position in businesses. Bank personnel also do not get involved in any aspect of running
a business to which a bank grants a loan. This means you get to retain full management
and control of your business with no external interference.
• Favourable interest rates: Bank loans typically offer more favourable interest rates
compared to other financing of borrowing. Especially if you are looking for a more long-
term funding option, taking out a bank loan will normally work out much better value than
using an overdraft, credit card, or a personal loan.
2.3 How does a bank loan work?
When someone needs money, at the first stage they may identify the purpose of the
loan, whether they need funds for home purchasing, business extension, or personal 6
expenses, etc. Frequently, borrowers opt for bank loans to finance substantial purchases
such as a car, home improvement, or initiating business ventures, etc. so the loan amount is
larger than some other personal loans.
Conducting thorough research on potential lenders is an indispensable phase in the
process of securing a bank loan. Prospective borrowers may diligently explore and compare
loan offerings from various banks or financial institutions to identify the one offering favorable terms and interest rates.
After identifying a suitable lender, borrowers proceed to complete the loan application
form provided by the lender. The borrowers may be required to give specific details such
as the reason for the loan, financial history, employment history, credit history, and other
pertinent information. The lender reviews this information, including the person's debt-to-
income (DTI) ratio, to assess the loan's feasibility.
Based on the applicant's creditworthiness, the lender either approves or denies the
application. If the application is denied, the lender is obligated to provide a clear reason,
which may include factors such as a low credit score, insufficient income, or a high debtto-
income ratio. In the event of approval, the lender will provide the borrowers with a formal
notification. This approval includes essential details such as the loan amount, interest rates,
repayment schedule, loan duration and any specific requirements or conditions tied to the approval.
Once the borrowers accept with the approval, they will get the fund and the repayment
period begins. This involves adhering to the agreed-upon schedule for repaying the borrowed
funds. Typically, borrowers make regular monthly payments, but the frequency may vary
based on the loan terms. Payments consist of both principal and interest portions, and the
schedule is outlined in the loan agreement.
3. TIPS FOR GETTING A BANK LOAN APPROVED
Getting a bank loan approved can be a crucial step in securing financing for various
purposes such as starting a business, purchasing a home, or funding a project. Here are
some tips to increase your chances of getting a bank loan approved:
3.1. Understand Your Credit Score
Check Your Credit Report: Obtain a copy of your credit report from major credit bureaus
such as Equifax, Experian, and TransUnion. Review it thoroughly to ensure there are no errors or discrepancies.
Improve Your Credit Score: If your credit score is low, take steps to improve it. This
may include paying off outstanding debts, making timely bill payments, and reducing credit
card balances. For example, if you have credit card debt, consider creating a plan to pay it 7
down aggressively. Additionally, refrain fro m opening new lines of credit in the months
leading up to your loan application.
Build Positive Credit History: Establishing a positive credit history can also help
improve your credit score. This can be achieved by responsibly managing credit accounts
over time. For instance, make regular, on-time payments for utilities, rent, or existing loans.
3.2. Know Your Financial Situation a)
Prepare Financial Statements: Create comprehensive financial statements to provide
a clear picture of your financial health. This includes:
• Income Statement: Summarizes your revenue and expenses over a specific period,
indicating your profitability.
• Balance Sheet: Outlines your assets, liabilities, and equity, providing insight into your overall financial position.
• Cash Flow Statement: Tracks the flow of cash in and out of your business, showing how cash is generated and used. b)
Analyze Your Financial Position: Use these financial statements to assess your
financial stability and repayment capacity. Lenders will evaluate these documents to
determine your creditworthiness. For example, if you're applying for a mortgage, your lender
will scrutinize your income statement to ensure you have a stable source of income to cover mortgage payments.
3.3. Choose the Right Loan Type a)
Understand Loan Options: Research and understand the various types of loans available, such as:
• Personal Loans: Used for personal expenses like medical bills or home repairs.
• Business Loans: Specifically designed to fund business ventures or expansion.
• Mortgages: Used to purchase real estate properties.
• Auto Loans: Financing for purchasing vehicles. b)
Assess Your Needs: Evaluate your financial requirements and choose a loan product
that best meets your needs. For instance, if you're starting a small business, you might opt
for a Small Business Administration (SBA) loan that offers favorable terms for startups. c)
Consider Terms and Requirements: Different loans come with varying terms, interest
rates, and eligibility criteria. For example, a secured loan requires collateral, while an
unsecured loan does not. Consider these factors carefully before making a decision.
3.4. Be patient and persistent 8
Be patient and persistent throughout the loan application process. Understand that
securing a bank loan can be a time-consuming endeavor, as lenders carefully evaluate each
applicant's financial situation and creditworthiness. It's essential to remain patient and avoid
rushing the process, even if it takes longer than expected.
If your application is initially rejected, don't be discouraged. Instead, use it as an
opportunity to learn and improve. Reach out to the lender to understand the reasons for the
rejection and ask for feedback on areas that need improvement. By gaining insight into why
your application was declined, you can identify any deficiencies and take proactive steps to address them.
Addressing deficiencies may involve improving your credit score, reducing debt,
increasing income, or providing additional documentation to support your application. Take
the time to rectify any issues before reapplying for the loan.
Throughout the process, maintain open communication with the lender and follow up
as needed. Keep track of important deadlines and provide any requested information
promptly. By demonstrating your commitment and perseverance, you'll show the lender that
you're serious about obtaining the loan and willing to put in the effort to meet their requirements.
Remember that persistence pays off, and a rejected application doesn't necessarily
mean the end of the road. Stay focused on your goal, be proactive in addressing any
obstacles, and remain patient as you work towards securing approval for your loan. 3.5. Dress professionally
Dressing professionally is crucial as it immediately establishes a positive impression,
signaling respect for the occasion and the individuals involved. It enhances credibility,
projecting competence and reliability, which can influence the perception of your financial
responsibility. Additionally, professional attire fosters confidence, impacting how you present
yourself and your financial situation. It reflects attention to detail and suggests a commitment
to professionalism in all aspects of your interactions, ultimately contributing to a more
favorable outcome in your loan application.While this can contribute to creating a positive
impression, it's essential to remember that other factors such as creditworthiness, income,
and financial history play a more significant role in the loan approval process. However,
presenting yourself in a professional manner can complement these factors and increase
your overall credibility as a borrower.
3.6. Apply with a co-applicant Who is co-applicant? 9
A co-applicant is someone who participates in the loan application process alongside
the main applicant and is legally responsible for repaying the full amount. Coapplicants are
often referred to as co-borrowers and can usually be added onto your personal loan application form.
Benefits of applying with a co-applicant: Applying for a loan with a co-applicant can
help to improve the chances of loan approval and also provide for more favorable loan terms.
It’s common for lenders to analyze your credit history, debt-to-income ratio and other
credentials during the process to determine the size of the loan, interest rate and the length of your loan term.
Therefore, a co-applicant who has a higher credit score than you can help you get
approved for a lower interest rate, and even help you gain approval where you otherwise may not have been considered.
Having a co-applicant can be helpful if you don’t have enough of a credit history under your
belt to get approved for a lower interest rate. It may also help if you need to take out a larger
amount of money but don’t have a steady income.
For example, I am looking to get a student loan to cover my tuition expenses, but I do
not have a credit history or my credit score is quite low. In this situation, I can ask my parents
to co-sign the loan since they have a higher credit score and will be responsible for repayment in case I am unable to pay
Because co-applicants have a financial responsibility to repay what’s borrowed, it makes
sense for it to be someone who will also benefit from the loan . For instance, you need more
funding to take the next step with your business; if you have a business partner, this person
will also benefit from the money and therefore may be willing to be your co-applicant.
Therefore, he/she is suitable to be a co-applicant.
3.7. Discuss risk in your application.
The fact that we can not plan for everything, for every contingency, for every turn of
events. Unforeseen events can happen at any time and potentially disrupt your ability to
repay the bank loan. If you do not discuss risk, the bankers will assume that you haven’t thought about risk.
Therefore, discussing potential risks demonstrates transparency and shows the
banker you've realistically assessed the venture. This builds trust and portrays you as a 10
responsible borrower. Because you show the banker you're prep ared for unforeseen
circumstances. This signals your resilience and commitment to the venture, making you a
more attractive loan c andidate . 11 4 . CONCLUSION
In conclusion, bank loa ns can be a powerf ul tool for financing vari ous requirements, from
starting a business to covering unexpected ex penses. By understa nding the loan process,
preparing the necessar y documentation, follo wing the mentioned tips of our group, y ou
can significantly increase your cha nces of loan approval. 12 REFERENCES 1. Advantages and disadvantages of bank loans
https://www.nibusiness info.co.uk/content/adva ntages- and- disadvan tages-bank-loa nsAn
2. Introduction to the Most Common Types of Bank Loans in the
Philippines https:/ /www.robinsonsbank.co m.ph/knowledgebank/an - introduction- to - the-
most - common-types - of-bank -loa ns -in -th e - p hilippines/
3. Advantages and Disa dvantages of Bank Loans for Sma ll Businesses
https://www.nerdwallet .com/uk/business- loans/pro- and- cons-of-ba nk- loans - for- s mall- businesses/ 4 .
https://bidv.com. vn/bidv_en/bidv-b log/tin-dung/lam- sao- de - vay-von-ngan -h ang-de - dang
5 .https://www.cnbc.co m/select/how- to- im prove- chances - of- personal- loan- approval/
6 .Julia K agan - Wha t Is a Loan , How Does It Work, Types, and Tips on G etting
One - https://w ww.investop edia.com/te rms/l/loan.asp
7 .Tara Furey - How Do Bank Loans Work? (2024 Guide) -
https://www.mar ketwatch.co m/guides/personal-loans/how- do- bank -loans-w ork/
8. Annie Millerbe rnd & Ronita Choudhuri - Wade - How Do Bank Loans Work? -
https://www. n erdwall et .com/art i cle/loa n s/personal-loans/how- do- bank-loa ns-
work#how- to- g et-a-pers o nal-loan-from-a- bank 13