When you are faced with financial difficulties and you have already exhausted all of your financial resources, the next step you are going to take is to turn to lending companies. When it comes to taking out a loan, the process can be long, tedious and stressful. You do not get the money right off the bat as you have to secure essential documents. Once you have complied with the requirements, you have to wait for the final verdict and the effort will pay off if your loan application has been approved. However, you need to start from scratch if your loan application has been declined. While it is not easy to get the approval of legitimate lending company, resorting to loan sharks (5-6) that leave you with no choice but to agree to excessive interest rates is not going to be a good option either.
Although micro financing has already extended a “helping hand” to people who are in need of instant cash, the thought of shouldering 20% interest is way too much. Due to the fact that not all businesses or small entrepreneurs earn reasonable income, a huge chunk of their money is intended for paying the loan’s interest. Even if the borrowers have the right to file charges due to unconscionable interest rates, they still decide to accept the situation. One of the requirements for getting an approval for your bank loan applications is by building your credibility. It might seem like a simple step but it will not be difficult for banks to approve your loan application if you have the ability to pay them. What better way to start building your credibility than opening your own savings account.
It also pays off to be keen on selecting the lending company you should put your trust in. Just because you need extra spending money does not necessarily mean you should continue to tread upon an unfamiliar territory without arming yourself with information. You can drown yourself in a cesspool of debt if you just allow yourself to be tricked into believing that these financial trolls are indeed your “savior” in times of need. As for lending companies, RA 9474 or Lending Company Regulation Act of 2007 provides information on the minimum requirements and standards they need to comply with.
“SEC. 6. Citizenship Requirements. - Upon the effectivity of this Act, at least a majority of the voting capital stock shall be owned by citizens of the Philippines.
The percentage of foreign-owned voting stock in any lending company existing prior to the effectivity of this Act, if such percentage is in excess of forty-nine percent (49%) of the voting stock, shall not be increased but may be reduced and, once reduced, shall not be increased thereafter beyond forty-nine percent (49%) of the voting stock of the lending company. The percentage of foreign-owned voting stocks in any lending company shall be determined by the citizenship of the individual stockholders. In the case of corporations owning shares in a lending company, the citizenship of the individual owners of voting stock in such corporations shall be the basis in the computation of the percentage.
No foreign national may be allowed to own stock unless the country of which he is a national accords reciprocal rights to Filipinos.
SEC. 7. Amount and Charges on Loans. - A lending company may grant loans in such amounts and reasonable interest rates and charges as may be agreed upon between the lending company and the debtor: Provided, That the agreement shall be in compliance with the provisions of Republic Act No. 3765, otherwise known as the "Truth in Lending Act" and Republic Act 7394, otherwise known as the "Consumer Act of the Philippines": Provided, further, That the Monetary Board, in consultation with the SEC and the industry, may prescribe such interest rate as may be warranted by prevailing economic and social conditions.
SEC. 8. Maintenance of Books of Accounts and Records. - Every lending company shall maintain books of accounts and records as may be required by the SEC and prescribed by the Bureau of Internal Revenue and other government agencies. In case a lending company engages in other businesses, it shall maintain separate books of accounts for these businesses.
The Manual of Accounts prescribed by the BSP for lending investors shall continue to be adopted by lending companies for uniform recording and reporting of their operations, until a new Manual of Accounts shall have been prescribed by the SEC.
It shall issue the appropriate instruments and documents to the parties concerned to evidence its lending and borrowing transactions.”
