Personal Finance Checklist Before Applying for a Loan

Whether you're borrowing for personal consumption or investment, taking out a bank loan is a significant financial decision. Before signing any loan agreement, it's important to take a step back and carefully assess your financial situation. A thorough checklist can help you prepare more confidently—whether you’re applying for an unsecured personal loan or a car loan—and avoid unnecessary financial strain in the future.

1. Clearly Define the Purpose of the Loan
Start by asking yourself: Why do I need this loan?
Having a clear purpose helps you choose the right loan product:

• For expenses such as shopping, travel, weddings, or other personal needs, an unsecured personal loan may be a flexible and convenient option. These loans typically offer fast approval and do not require collateral.

• If you are planning to purchase a vehicle to support your work or daily routine, an auto loan can help you achieve that goal with interest rates and terms tailored specifically for vehicle financing.

2. Assess Your Income and Repayment Capacity
Lenders evaluate your repayment ability—and you should, too.
Review your monthly income, including your fixed salary, any secondary income, and investment returns (if applicable). Financial experts commonly recommend that total monthly loan repayments should not exceed 40% of your net income. This allows you to maintain a stable quality of life during the loan term.

3. Check Your Credit History
Before approving any application, banks review your credit score and past borrowing behavior.

Outstanding debts, late payments, or bad credit history may affect your eligibility for a new loan. It is important to check your personal credit report, clear any overdue balances, and maintain good credit habits to improve your standing with lenders.

4. Review Your Fixed Monthly Expenses
Borrowers often focus on the loan amount but overlook fixed monthly costs such as rent, tuition fees, insurance, and utilities.

Evaluating these expenses provides a more accurate picture of your financial capacity and helps you avoid overborrowing. A realistic assessment of your budget allows you to choose a loan amount that fits your lifestyle and financial goals.

5. Prepare All Required Documentation
Having complete and accurate documents can speed up the loan application process.

For unsecured personal loans, required documents typically include:
• National ID or Citizen ID
• Employment contract, income confirmation, or salary statements
• For car loans: vehicle purchase contract, invoice, and vehicle registration papers

Make sure all documents are up to date and submitted according to the lender’s requirements.

6. Choose a Reputable Financial Institution
Selecting a trusted financial institution ensures transparency in loan terms, interest rates, and repayment policies. It also gives you peace of mind throughout your borrowing journey.

Shinhan Finance is one of the leading consumer finance companies in Vietnam, offering fast, transparent, and convenient loan solutions. With simple procedures, experienced consultants, and a customer-first approach, Shinhan Finance is a trusted partner for millions of customers nationwide.

A well-prepared checklist is essential before applying for any loan. Make sure your loan purpose is clear, your financial capacity is realistic, and your credit profile is solid. With careful planning and the right financial partner, borrowing can be a safe and effective way to reach your goals.