Applying for a personal loan is never easy because there are a lot of things you need to consider before you apply one. One has to consider the requirements for the loan they are trying to apply, the amount you plan to borrow, your credit history, and which moneylender to go to when you are ready.

However, even if you have all the requirements ready, stories of those who failed to get a personal loan would cause you to have doubts about your loan preparations. If you panic too much, it will lead you to have troubles with your own applications.

Contrary to popular belief, moneylenders – as well as non-banking institutions – are actually quite straightforward when it comes to processing loan applications and what they need. They will clearly stress their guidelines when you inquire and it only takes a few hours to get processed if all the requirements are met.

If you are planning to seek a personal loan or any other loan from a moneylender, here are some tips to make it swift and successful:

• Understand the facts about the Total Debt Servicing Ratio

In order to determine if a borrower should be permitted to get a personal loan, Singapore moneylenders and other lending institutions use the Total Debt Servicing Ratio framework as ordered by the Monetary Authority of Singapore. The TDSR assists applicants in making good financial decisions and help determine how much they can actually borrow and pay.

By understanding the TDSR, you will be able to determine if you will be able to borrow the amount you intend to apply for based on your income or assets. If banks and moneylenders see that your income is greater than the amount you intend to borrow, they will approve your personal loan application without any fuzz.

• Develop your credit history

Nowadays, it is not really uncommon for people to have a lot of loans under their plate due to the expenses one has to pay monthly. However, if your loans already comprise 60% of your total income, getting another loan approved can be difficult. Some moneylenders may permit you to borrow more, especially if you are a returning client, but the amount may not be as high as you hope.

Before you apply for a personal loan, check your credit history first to see if there will be issues with your application. You can request your credit history through the Credit Bureau Singapore for a small fee. Your credit history would indicate all your outstanding debts, and your current and past transactions.

If you have a lot of active debts, it would be ideal to consolidate them into one debt through debt consolidation loans. This will help you pay your debts easier since you will only have to pay one monthly until your loan term ends.

You can also build your credit history by paying your dues on time or using a secured credit card instead of a regular credit card. You can also deposit a lot in your bank account and prevent excess withdrawals.

For those with black marks in their account, or those with foreclosed accounts or defaulted loans, it is ideal you speak to a financial expert to help you rebuild your credit history.

• Check the market

Banks, moneylenders and financial institutions often check the market to determine if they should approve personal loan applications. If the market is unstable, they will have scarce resources to lend loans to borrowers and loans will become more expensive. If the market is stable, they will be able to offer cheaper loans.

Time your loan application during the months when the market is stable so you have more chances to get your loan application approved. You may even get nice rates during this time.

• Prepare the right documents

If you wish to apply for a personal loan, you must be able to present the right documents to prove that you will be able to pay your loan. Some of the documents that may be asked from you include your income tax, NRIC, CPF Contribution History and your pay slips. They will also ask for your employment contract or sources of income.

You must make sure that you have copies on hand so the bank or moneylender will not have to wait for you to produce these files. Make it a point to photocopy these documents and ensure they are up-to-date. If you miss any one of these documents, you may find it difficult to get your application approved.

Once your loan is processed, they will return these documents to you.

• Do research about the moneylender and personal loan you plan to apply for

Finally, when you have everything ready, you must do your research when it comes to which moneylender will provide you the right personal loan that matches your needs.

Remember, not all moneylenders or financial institutions in the market are trustworthy, which is why it is important you check with the government if the moneylender you plan to use is registered. The Ministry of Law has a full registry of approved moneylenders.

You must also check which loan program you are planning to get. Consider the interest rates, the length of payment terms, amount of repayments and the type of loan it is: whether it is secured or unsecured loans.

Moneylenders will be happy to answer any inquiries you have about the loans and if you think you need a more flexible plan, they could sort it out for you.

Final remarks

If you want to ensure that your loan applications will be approved in no time at all, you need to prepare as early as possible once you decide that it is the solution you need for your cash problems.

If you do your research, studied all the available loans for you to choose from, and prepared your documents, you will be able to make a better financial choice.

Early preparation would also help you speed up your loan application and guarantee that you will be able to get your loans without any problems.

When you are trying to get a mortgage, a credit card or a personal loan, banks and financial institutions offering credit will look at one major thing: How much risk will they face when they approve your application? Will they have to worry about losing money due to late payments or defaulted loans?

Considering this fact that financial institutions would like to prevent bad loans, your credit application should reflect that you are a low-risk borrower. If your loan is approved, the interest rate will be based on your risk level. If you are a low-risk borrower, your loan’s interest rate is lower. If you are a high-risk borrower, your interest rates are higher. Even if you promise to pay your loans, people can lie easily and because of this, it is difficult for financial institutions to see which ones they can trust.

With one’s loan application, it can help these credit providers determine if you can pay off your loans and the interest rate that will be charged to you.

Financial institutions in Singapore have their own policies in terms of personal loans and the rates they will take into consideration to determine if you should get the loan you applied for. They also have different guidelines to consider based on the market’s current status. If you have a strong credit application, your applications will always be approved and give you the best rates.

Here are the major things a loan officer would look into when reviewing your loan application and how these things can make or break your application:

Credit Score

For loan officers, your credit score is the best way to determine if your credit risk. In Singapore, one’s credit score is based on a four-digit number which ranges from 1000 to 2000. If you scored around 1000, they will be seen as a high-risk client and possibly default their payments. For those who scored higher, they are considered low-risk clients.

Of course, even if the Credit Bureau Singapore – Singapore’s top authority in terms of providing clear and comprehensive credit data of each individual in the country – ranks you as a low-risk client, it may not be the same score the loan officer will use to determine your application. Each financial institution may vary on how they would determine one’s credit score aside from checking the CBS’ record.

Credit History

One’s credit score is influenced by one’s credit history. Your credit history would detail how well you paid your past and present credits, your active and closed accounts and other credit-related history facts. Loan officers will check this part of your application closely to see if you can commit to repayments and you won’t risk your loans to default. Late repayments are black marks in any application, especially if you are 30 days late and more.

If your record has collections, legal action and garnishments such as bankruptcies or foreclosures, the loan officer will immediately take note of this because it indicates defaulted loans or credit. If you do have these in the record, it is best you provide a reasonable explanation for it so the loan officer can make exceptions if they are valid reasons.

Employment History

Your past and present employment history will also make an impact in your credit application because this will ensure that you have a stable source of income to pay your personal loan. If you have been working long for a certain job, it will reflect that you have a secure income source. If you change jobs regularly, especially when it somehow times with your loan application, it may tell your loan officer that you may not have a regular income source and you are at risk of losing this job.

If you have not worked for the job for long, it is ok. If you switched jobs but still remain on the same industry, loan officers will see its job as the same line of employment.

Debt and Income

Another factor being considered in credit applications is your capacity to pay the new loan. The loan officer will look into your credit history and check how much debts you have and see if it makes sense with your income. Loan officers may ask for your income per month and see how each percentage is allotted for expenses and other aspects. If your credit history is good and you do pay your debts regularly, they would trust you with your application.

If you get denied, pay off your debts first, lower your monthly payments, or wait until your income improves. If you get a raise, wait for it to be applied and wait for a few months before you apply.

Collateral

Depending on the loan you applied for, loan officers would also consider your property or your collateral’s value. If you fail to pay your loan, the collateral will be used as payment. A collateral gives a financial institution security because they can still get an asset if you default your loans and sell it to reclaim the amount they lost.

Of course, if you applied for an unsecured loan or loans without collateral, they will not be looking for a collateral. However, they will be wearier of your application since such loans present more risk of loss, especially if you stop paying your loans.

What’s your alternative?

If you cannot get an approval for your personal loans through a bank due to a problem on your credit history and requirements, there is another way you can get funds for your needs: seek a moneylender.

Singapore has a lot of licensed moneylenders people can choose from in case they need funds. Like banks, moneylenders offer loans of various types depending on the person’s needs.

Unlike banks which consider the noted factors above strictly to determine if you can pay off the loan, you are applying for. Even if you have a bad credit history or have no history at all, moneylenders can still approve your application if your supporting documents can support your paying capacity.

Of course, if you do have a bad credit history or no history, some moneylenders may be hesitant to accept your application depending on how bad your credit history is like.

Conclusion

Moneylenders, banks and other financial institutions don’t really want to restrict their services to users. However, the reason they may deny your request for a personal loan is that they also have to consider their other customers who are paying them regularly. Even if one bank or credit provider denies your application, others may reconsider and approve it.

If you feel as if you have problems with the five aspects above, immediately find a way to remedy the problem because it will make your future applications easier.

Do you own a credit card?

If you do, do you know everything there is to know about it? If you don’t, don’t worry. There are people who still do not know everything about their credit cards even if they have been using it for a long time. Some don’t even know it comes with extra features that they can use for certain services.

However, there is a danger if you do not know everything about credit cards. Sometimes, you may find yourself believing a rumor and shake your trust with your credit card.

Before you go believing in these rumors and lament on closing your credit card, here are some of the myths that you should know about your credit cards and why these myths shouldn’t be believed in.

Debit Cards Vs. Credit Cards

Many people would immediately say you shouldn’t get a credit card because of the many bad things that can go wrong when using it, like credit card fraud, hidden charges, and other similar problems. They would even advice you to get a debit card instead since it is safe than credit cards.

However, credit cards actually come with more advantages than debit cards.

While debit cards do not come with an annual fee, it directly deducts the amount you use in your bank account. The more you use your debit card, the more your bank account decreases and the more it is at risk of being closed by accident. One’s credit rating can be affected by closed bank accounts, so debit cards can be detrimental to your credit history. Continuous use of debit cards also does not assist in building a credit history.

Meanwhile, credit cards do come with an annual fee, but when you use it, you don’t harm your bank balance since you are just temporarily borrowing money to pay the item immediately. As long as you use it properly and pay regularly, credit cards will help you build your credit history and show you are a regular payer.

When you try applying to loans, lenders will look into your credit history to see how well you paid your bills and credit cards and use it as the basis for the amount you can borrow.

Credit Card Balance Can Help Build Credit Rating

Many people believe that it is ok to have some balance in their credit cards. However, this should not be your practice when you have a credit card.

Having a remaining balance in your card and not paying it can affect your credit score. It will tell a moneylender if you are planning to apply for a personal loan in loan advisor, that you are a poor borrower because you always leave a balance hanging.

If you are not able to pay your balances in full, at least pay a part of your due, ideally more than the minimum amount specified, before your due date comes.

Keep One Credit Card

Many movies, advertisements and even shows often show people who have a lot of credit cards go into debt. However, it depends on every person on how well they will use their cards and if they have a strategy to pay for all of them without missing a due date.

Determine where you will use the cards for and how you can plan your payment scheme for all your cards. If you believe you can handle multiple cards, go for it.

If you do keep multiple cards, some of them offer rewards and cashback if you earn points as you use and pay regularly.

Your Credit Score Decreases When You Get a Credit Card

While it is true that new credit cards do deduct points from your credit score, the deduction is not that huge.

In Singapore, the deductions on credit history by new credit cards are only 5 points. If the card does make a problem with your credit score, just get a secured card since it would help you rebuild credit scores without worries.

Do not agree to offers of credit limit increase

Most banks would offer credit limit increases for some of their clientele who have proven they have used their credit cards wisely. However, some would say these are tricks and there is a catch once the credit limit increases.

It is possible there is a catch with credit card limit increases. However, you can also use that credit limit increase to your advantage based on your needs.

Alternative?

If you are still a bit scared about your credit cards, you can look into other alternatives which you can use when you do need money: from borrowing money from a relative or seeking out personal loans from a bank or a moneylender.

When you apply for a personal loan, you can identify how much you need to borrow, submit your requirements and wait for the approval of your chosen moneylender. Once it is approved, you can pay the personal loan off monthly or depend on your agreements.

What’s great with personal loans is the fact that the payment terms are longer than credit cards. In credit cards, you have to pay it immediately so you don’t incur high-interest rates.

Loans, on the other hand, will let you pay off how much you borrowed at a span of 3 to 5 years depending on your agreement with the lender. Loans also come with lower interest rates and they are quite constant, even if you are late in payments.

Consider Before Picking

Credit cards have their advantages and disadvantages, as well as misconceptions which you should look into before you believe it. While the disadvantages and the misconceptions can be scary, you don’t need to close your credit cards right away because you may need to use it in the long run.

If you want to lessen the load on your credit cards and the bills you pay each month, checking out alternatives would not hurt.

No matter which choice you make, just remember to think it through and prepare accordingly so you won’t get blindsided when it comes to paying your dues!

It is hard to predict when you may need some extra cash. Luckily there are numerous sources of fast cash whenever the need arises. Fortunately, Singapore has many sources of credit thus you can compare some of the loan terms ahead of signing a contract.

When an urgent financial need arises, moneylenders are a fast source of funding. Singapore has many legal and licensed moneylenders. You simply need to know the type of payday loan that will work best for you and the terms that are favorable to you.

When To Get Short Term Loans

Whenever you are faced with a financial emergency to solve you are more likely to require a kind of short-term loan. This may be used to deal with all sorts of financial needs like car repairs, medical emergencies, paying off rent or utilities. This can be useful for you if you have a financial shortfall due to some reason.

Everyone will face some tough times every once in a while. Therefore, you should not feel ashamed when seeking financial assistance to a loan advisor whenever you need it. Even then, it is advisable that you get a loan responsibly. This you can do by ensuring that you only borrow what you need and can repay comfortably.

Where To Get Short-Term Loans In Singapore

In Singapore, there are numerous licensed moneylenders that you can visit for short-term loan services. These legal lenders will offer you with fast cash loans through an easy and quick process. Here is a look at a number of benefits of taking short-term loans from licensed moneylenders in Singapore.

Minimum documentation
Paperwork for making loan applications can be time-consuming. But, when dealing with moneylenders, the process is stress-free since they ask for basic, minimum documents to help process the loan application.

Fast loan processing
Moneylenders will take as fast as an hour when they are processing short-term loan applications.

Repayment Flexibility
As far as making repayments is concerned, the licensed moneylenders will offer you a flexible schedule that will suit your financial requirements.

Interest cap
Since the beginning of October 2015, the licensed moneylenders are to charge a cap of 4% interest a month. This is regardless of the loan type (unsecured or secured) or your income level.

Short-Term Loan Types

Depending on the moneylender you work with, there are many types of short-term loans to choose from;

Instant Cash Loan

From the name, this loan is approved in under a short time, normally within 1 hour. This kind of payday loan is mostly issued to existing customers who have proven to be trustworthy in payments. Also, these are borrowers with guaranteed payment ability. For instance, you can submit a pay slip. The rates of interest for this type of loan are high. The set repayment period is normally under 30 days.

The loan amount that will be made available to you for unsecured personal loans will be based on your ability to pay back. To determine this, the lender looks at your income and your credit history as well. Based on what your financial needs are, there are several options for short-term loans. Make sure to shop around for ideal loan terms.

Payday Loans

This loan type is for people who are employed. Your salary is what guarantees the loan. The loans are offered for a tenure of 31 days when you receive your salaries. It is the easiest loan type to get since most moneylenders will accept enough proof of your ability to repay such as employment letter and a recent pay slip. This loan is processed within a short period of under an hour.

When unforeseen emergency situations crop up. Taking a payday loan that can fit your needs will be helpful. This is because the loan will be authorized and disbursed to your account within a few hours. The payday loan is also known as cash advance loan. This loan type is best more so when you are faced with a financial challenge. Even then you need to fulfill some loan requirements.

Personal Loan

The personal loans are provided under varied terms for rates of interest and repayment period. You will be able to negotiate for different loan terms during the application for personal loans. This makes this among the most flexible loan available in the market.

Low-Income loan

This loan type caters to those with lower income and does not fulfill bank loan requirements. When you cannot fulfill the minimum bank’s income requirements. You will not be able to get the payday loan from them. On the other hand, moneylenders are catering to this group of people however, the loan amount will usually not be that high. The process of application is effortless and approval is just about guaranteed in most cases.

Things To Take Note Of:

1. Always ensure that your moneylender holds a valid license to run their lending business. You can confirm this by searching the licensed moneylenders’ list accessible on the Singaporean Law Ministry website.
2. Make certain that you are clear about all the contract terms.
3. Take into account your salary and other financial commitments before getting the short-term loan. When you know you will not make to repay the installment in time. You risk incurring a late payment charge and interest costs which can further cause a dent in your finances.
4. Only borrow the amount you need. Do not give into the temptation of taking out more money than what you need to cover your loan cash requirements.
5. Request for a loan contract copy from your moneylender. Your lender is bound by law to clarify the contract terms using simple language that you will understand.
6. Identify any terms contained in the contract which let your moneylender put a caveat on proceeds of the sale of your property in case you default. When your moneylender puts a caveat, you are legally bound by law to repay first the outstanding loan to the moneylender ahead of selling your property.
7. Get in touch with several moneylenders to help locate the best contract terms. Do not sign a loan contract unless you accept the loan conditions and terms.