5 Tips to Boost Your Chances of Getting Loan Approval

There are many instances in life when one might need a loan, be it starting a business, paying for higher education, or having a financial emergency.

To cover these types of needs, a personal loan is highly sought after in Singapore. A personal loan is typically an unsecured loan that does not require collateral. It can be a great option to help you meet your financial needs.However, the application process for personal and business loans varies for different lenders.

If you are a first-time loan applicant or have already tried but failed to get one, it can be a frustrating process, especially if you need quick cash. So what can you do to increase your chances of getting your loan approved? Here are five tips to help you out.

Tip 1: Maintain a good credit score

Your credit score can make or break your loan application. It is a number that a financial institution or legalised money lender in Singapore would consider during the application process.

A credit score reflects your financial health and indicates the likelihood of you repaying or defaulting on your bank loans. The higher your credit score, the better your chance for loan approval.

To maintain a good credit score, be disciplined about making timely payments for all your debts. As far as possible, make the whole monthly payment due, instead of paying just the minimum monthly sum. Consistently making payments and not defaulting on your loans will reflect well on your payment history, thus boosting your chances of getting your loans approved.

In addition, you should also avoid taking multiple loans within a short period. The more debt you take on, the lower your credit score will be.

Tip 2: Have a steady employment profile

Moneylending companies in Singapore such as licensed moneylenders need some kind of assurance that you can pay back your loans. For this, they will check your income history to determine whether you have a steady income source.

To increase your chances of getting your loans approved, try to have a steady employment profile and avoid frequent job changes whether you are a full-time or part-time employee. Even if you are self-employed, the chances of getting your loans approved should not be affected if you can provide proof of steady income.

Tip 3: Start with a small loan and pay it off promptly

If you are new to personal loans or aren’t in a favorable place to apply for a large loan, start by applying for a small one. Seeking a bigger loan amount than you need can seem risky to licensed moneylenders, and it can also impact your ability to meet other financial obligations.

Starting small might not be a bad thing if you can pay off the loan on time. This will improve your credit score and build trust between you and the moneylending company, thus boosting your chances of getting loans for higher amounts approved in the future.

Tip 4: Find a guarantor

If you don’t meet the moneylenders’ requirements to apply for a loan, one way to solve this would be to get a guarantor. This could be a close friend or a family member who is willing to help you and who has a good credit rating and steady income.

Essentially, being a loan guarantor means promising to repay the debt on your behalf if you default. It’s a big commitment that comes with serious obligations. Therefore, you must ensure you can repay the loan on time and in full, so you won’t jeopardize your relationship with your guarantor.

Tip 5: Ensure your documents are in order

One of the advantages of getting a loan from a licensed moneylender is also that fewer documents are required before your loan is approved. However, the few documents that are required, should be in good order.

These include:

• Your identification document (such as NRIC for Singaporeans and PRs)
• Proof of employment (salary slips)
• For self-employed individuals, your tax returns
• For SIngaporeans and PRs, proof of CPF contributions

As long as these check out, your loan approval process should be hassle-free.

Here at R2D Credit, our goal is to be the go-to moneylending company in Singapore. We are committed to providing our customers with fast and reliable service to meet their needs. No matter what your circumstances are, contact our team of financial consultants who can assess your financial needs and provide a suitable solution.

About the Author

Apart from helping borrowers with their cash needs swiftly, as one of the top-rated licensed lenders since 2009, it is only natural that R2D Credit endeavours to share the knowledge we’ve amassed to assist borrowers in better managing their finances.