Adulting 101: 6 Questions You Need to Ask Yourself Before Taking Out a Loan

Adulting 101: 6 Questions You Need to Ask Yourself Before Taking Out a Loan


A couple of days ago, Kyle of emailed me and asked if he could write a guest blog post for me. Of course, I said yes! I was thrilled with the fact that this is the very first guest post my blog is receiving, and that his proposed article fits my niche perfectly.  In fact, it both fits the “lifestyle” and the “personal” categories. 

You may have noticed that I have been writing quite a lot of blog posts about adulting lately. My number one drive comes from seeing a lack of helpful and/or updated articles online about applying for this I.D. or getting this kind of subscription – all adulting stuff that are just so darn confusing without a proper guide. Sadly, most of these adulting stuff do not come with any handbook. So whenever I undergo any of these things, I make sure I write about them as a piece of reference for me, as well as for you, my dear readers. 

So let’s talk about something we all hear from our elders but never seem to get the gist of – LOANS

Everyone has financial responsibilities that call on them. Whether it’s the regular bills payment or something much more, like a credit card bill, it’s up to the person to handle it. Some will handle it well; others end up being unable to properly allocate their budget to keep up with it.

At some point, you might start thinking about taking out a loan to pay for something that’s been your goal for some time. Before you do, you might want to take a step back and ask whether what you want is achievable with or without a loan.

Other than that, here are six questions you need to ask yourself before taking out a loan.

Why am I getting a loan?

The reason why you’re getting a loan is definitely your first question to ask. Is it to help buy a home or a car? Do you need the money that badly?

A loan from lending companies or banks isn’t like asking your friends or siblings to spot you when you’re low on cash. You need to find out whether you meet the requirements for a loan, to begin with, and in the case of a secured loan if you have the collateral to put up against the loan.

Is it really the solution?

Consider a loan as the last resort for your needs – you definitely don’t need to get one if your lack of money is over utilities and other bills. If it’s about getting a home or a car, you might want to save up a little more to put up as a down payment when you do get a loan, that way you end up paying less.

If a loan is necessary to the expansion or upkeep of your business, however, it’s a matter of making sure that you qualify for a loan.

What’s my cash flow like right now?

You’re more likely to get your loan application approved if there’s a record of you being able to take on something similar and being able to pay on time. Before you start looking at applications though, you’ll want to look at your income stream, see if it’s stable enough to handle doing without a few luxuries when you take your loan on.

A budget that factors in the planned monthly payments will help train you for the eventuality of the loan and help you build a savings buffer at the same time.

What kind of loan do I need?

You’ve got two main types of loans: secured loans, which require collateral; and unsecured loans, which do not require collateral, but typically have lower loan amounts and higher interest.

Under these two, you’ve got the SME loans, which focuses on the building or expansion of small businesses. Home loans, which let you buy or make improvements on your current home; car loans, which let you fund the purchase of a car, and multi-purpose loans – a type of loan that doesn’t lock into a specific use. Multi-purpose loans may also be salary loans, meaning that your loanable amount is based on your salary.

How much should I borrow?

The amount you borrow largely depends on what you need the loan for. If you think your monthly income can endure larger loan amounts, you can apply for it, but note that the final amount that you can borrow will be the lender’s decision.

To figure out how much you might end up paying on an amount you plan on borrowing, you’ll want to use an online loan calculator to give yourself a basic idea.

Where do I borrow from?

Banks should be your go-to option for a loan, barring that, home loans can be financed through Pag-Ibig, providing that you’ve made enough contributions. Car financing options are available at automobile dealers, but you might get a better deal via a bank.

Salary loans can be acquired via the SSS, and depending on your installment period, the amount will be deducted from your paycheck.

Final thoughts

Trying to get a loan requires thought, and being prepared for the toll it will take on your finances. You’ll want to look at banks and personal loan providers via comparison websites in order to get the best possible rates for your needs.

Author Bio:

Kyle Kam is from, a financial comparison website aiming to help Filipinos save money through diligent comparisons of financial products. Follow him on twitter @undisputedkyle.

6 thoughts on “Adulting 101: 6 Questions You Need to Ask Yourself Before Taking Out a Loan”

  • I feel like this is what “lifestyle blogs” should be about — “adulting.” It’s nice to see that you’re incorporating this kind of content on your blog. “Adulting classes” are starting to become a trend here in the States. There are classes on how to shop for health/life insurance, fix a flat tire, etc. This is what we need, really. No fluff!

    • Thanks so much, Shayne! That’s my ultimate goal – I want to post actually helpful blog posts, nothing na emotional like “thought catalog” or di naman kailangan na “secret places to shoot your #OOTD shots”.

      That’s a good thing, actually! I’m glad those classes exist na. How I wish may ganyan din dito. Sad how everything I learn about adulting I experience from PH’s shitty government. LOL. So nandun hugot ko sa adulting articles ko.

  • I’ve tried getting a loan from Pagibig and SSS already since I really needed money that time. My Pagibig loan payment will end November this year and my SSS loan will end August next year! Haha. Adulting is so difficult!

    • Grabe ang tagal!! What did you need money for, btw, if you don’t mind? I havent taken out a loan yet and I’m sure when that time comes sobrang dami kong tanong. Haha. And yeah, adulting is hard esp if you’re not guiding properly! Lalo in the PH, manghuhula ka sa procedure. Lol.

  • Thank you so much for this post! Now I know some other things to keep in mind if ever I decide to apply for a loan in the future. Also, as a real estate broker who will have future clients that might need to think carefully about this, I can now assist them accordingly. We were already taught about the technicalities of applying for a home loan, but it’s also good to know about the deciding factors on whether to apply for a loan or not.

Leave a Reply

Your email address will not be published. Required fields are marked *