As uncertainty is looming in every corner of the world, you need external financial assistance to get past essential events in life. Hence, many take personal loans from a credit company in Singapore to spruce their living home and to pay urgent medical bills. A personal loan comes from the category of unsecured loans, and your credit history will act as your eligibility criteria. The versatile functionalities of personal loans make it an ideal plan for many customers. It provides financial assistance to the ones in need in simpler terms. Because of its popularity, many assume availing of the loan is easy and uncomplicated. But the reality is far away from it! Personal loans include a series of processes and can be difficult if you do not have a desirable credit history. So here we have five tips that will assist you in getting a personal loan without hassles.
1. Fix your credit score
Credit score plays a vital role while getting any kind of financial backing. A good credit score will help you land attractive offers. The Credit Bureau Singapore (CBS) is the regulatory body collecting and releasing information about your credit history. It assesses your payment history, credit usage, length of credit history, types of accounts and recent activities to arrive at decisions. Once these factors are taken into account, it determines the borrowers’ risk involved while availing loans from financial institutions. If your score is low, then it signifies your inability to pay back on time. Adhering to this, credit company Singapore evaluates your credit behaviour with scores between 1000 and 2000. If your score is near 1000, it immediately sends red flags to your lender and increases your risks in getting loans. Hence, it is pivotal to restore or amplify your low credit score and get your debt in control.
2. Check your eligibility criteria
The eligibility requirements of institutions might vary according to the lender. Hence, you can check each separately either by enquiring about it and comparing each to arrive at a decision. It will also help you get an idea about different lenders’ interest rates, processing fees, and prepayment charges. The general parameters involved in getting a personal loan differs based on your salary and self-employment status. It directly depends on your annual average income or profit earned. If you are a salaried professional, any known credit company in Singapore will take your monthly fixed earnings and experience (2 years preferred) to calculate your eligibility requirements.
Additional checklists involve your age (maximum 60 and minimum 22) and income threshold that is a minimum of $20,000 annually for Singaporean citizens. Similar to the former, if you are a self-employed individual, your age should be a minimum of 22 years and a maximum of 60 years. If you are a foreign national, then your annual salary should be a minimum of $40,000.
3. Keep your documents ready
Before reaching out to a credit company in Singapore, ensure that you have all the valid documentation ready to hasten the approval process. The best thing about getting a personal loan is that you need less documentation for personal loans compared to other bank loans. Hence, prearranging documents will be accessible and make the process faster. Usually, you need identity proof, resident proof, income proof for applying. Apart from this, getting yourself familiarized with the different payment and interest rates will also help you get the best offer. There are mainly three types of fees – annual fee, late payment fees and change in tenure fee. A yearly fee is a fixed sum that you pay in addition to your usual interest rate. At the same time, a late payment charge applies when you miss out on a payment or delay completing the process. In some instances, banks will change the charges due to circumstantial changes, making it more than your affordability. At that time, some flexible bodies will help you by increasing the tenure period for the additional payments.
4. Check whether you can afford the loan
Creditworthiness and affordability are two different things. Affordability stands for your capability to make monthly payments for a credit agreement. To check your affordability, you can assess your monthly income and outstanding debts. Lenders will also check your consistency in making payments over a sustained period before issuing the approval. On the other hand, if you already possess a large number of credit cards and have applied for a new one, lenders will often reject your request. Additionally, you will not be able to apply for personal loans or hire purchases using multiple credit cards. Another thing that you must be wary about is your spending. If you have maxed out your credit, lenders might hesitate to approve your loans, despite your financial history. Since affordability status is not available along with your credit score, some lenders might ask for proof of your affordances. In such cases, you can provide income proof and outgoings to demonstrate your affordability. Since lenders get scrutinized to check the affordability of their borrowers, they have formulated policies that will make the process smooth and convenient for both you and them. You can even do a stress test to see if you can afford the loan repayment and your ongoing debts.
5. Check how much you can borrow
The borrowing limit of the bank varies depending on your relationship with the lender. Along with this, your credit score and monthly income will decide your maximum threshold. Once you are okay to proceed, you can optimize the amount up to four times your monthly salary. But if you are earning less than $30,000 per year, then the maximum amount you can avail stays limited to twice the sum of your salary. Moreover, if you want to get an increased amount, then you should be someone with a high-income bracket.
Partner with an excellent credit company- SPG credit!
Following these tips will increase your prospect of personal loan approval. If you are looking for a reliable and flexible financial institution, then SPG Credit’s unique loan program can help you meet your necessities without any obstacles. SPG credits provide personalized offers depending on your needs and make the process swifter than other lenders. Besides, we support you with flexible repayment methods, and the eligibility age is pushed to 18years. Contact us to know more!