When you are ready to apply for and secure a loan, you can choose to do so through either a bank or a private lending entity. The former is often chosen for its greater attention to structure and better reputation.
The Hong Kong Association of Banks is responsible for regulation in this regard, and the required compliance yields consumer protection where necessary. If you’re thinking of accessing loans in banks, here is some useful information that can point you in the right direction.
Evaluate Your Financial Situation
Never rush into any loan-based decision. Your goal is always to secure the best-fitting product for your unique needs and financial situation. For example, perhaps you want to acquire a loan of HK$100,000 with a 12-month repayment period.
Based on the interest and the amount you earn monthly, this would put you in a position to repay comfortably. You may discover that CNCBI offers a HK$100,000 loan product that is perfect except for the fact that it has a mandated 6-month repayment requirement.
You should not select that loan as the larger payment amount per month would likely not be feasible, and it would put you in a terrible financial position.
Get the Details and Requirements of the Loan that Best Matches Your Needs
After understanding your potential to repay, you want to start looking at some of the different products available. Do not make the mistake of focusing on a single lender as you do this.
Doing so skews your results and prevents you from being certain that you are choosing the best loan product.
Admittedly, it can be incredibly tedious to reach out to different lenders to understand what they offer as you choose the product that fits you best. Thankfully, you don’t necessarily need to go about it this way.
Consider using a service such as MoneySmart to immediately compare offers from different financial entities. Doing so makes it apparent which option is the most beneficial and well-suited to your situation.
Complete the Application Process
Once you’ve made up your mind, you can then apply to the bank of your choosing. Remember that loans in banks are highly structured, meaning there are prerequisites you must meet to even be considered, let alone complete your application form.
Again, if you choose to go through MoneySmart, much of what would be a potentially annoying process becomes that much easier. For one, the loan requirements are conveniently laid out for you before you even begin the application process.
Next, clicking on any of the conveniently located application buttons takes you directly to the associated bank’s electronic loan application page. If nothing else, this eliminates a large portion of the typical guesswork and discovery that’s associated with the initial processing stage.
Approval and Payout
Provided that the outcome is favourable, and your loan is approved, you’re then given an offer, which is detailed in your approval correspondence. Not only does it confirm the terms that govern the potential agreement, but it also indicates any actions you may need to take.
If there is anything that is still unclear at this point, it would be in your best interest to seek clarification as much as possible. Some people loop in an accountant or solicitor at this point, both of which are excellent for ensuring the proceedings factor in your best interests.
Once you are comfortable, you can then proceed to accept the offer, which is indicated by your signing off on the correspondence for confirmation.
With that, the money is sent to the payment method you indicated. The only thing left at this point is for you to start making your repayments. In most cases, a standing order direct debit system is used, which automatically does payment deductions from your bank account every time the agreed interval elapses.
Whether this is the case for you, or a manual payment is required, it’s your responsibility to ensure that the required amount is covered.
Procuring a bank loan can certainly be an intimidating venture, especially at the onset when you need to be considering different lender products and trusting that you are securing the best one.
Once you stick to the insights provided above, not only should you be getting the best deal possible, but you are also setting yourself up for a streamlined and convenient process.
Since banks are regulated entities, the loan process is characterised by a set structure. Here is a look at the general workflow and how you can optimise it!