You may need to obtain a personal loan from a credit company in Singapore for many reasons. A personal loan is a loan you can get from a financial institution in which you pay it back in monthly installments. This is one of the most convenient loans to apply for if you require urgent cash.
You may want to take a personal loan to pay off your debt, expand your business, purchase/repair/upgrade a vehicle, purchase or refurbish your home, purchase furniture or travel the world. Irrespective of the reason, getting a personal loan will assist you in actualizing your goals.
Moneylenders and credit companies have certain criteria in which help to decide when it comes to giving out loans. SGP credit company is one of the best companies that you can use to acquire a personal loan. Below are five tips that will help you in getting your loan approved by lenders.
1. Maintain a good credit history:
Your credit score is crucial when applying for a personal credit loan. Your credit history is a testimony of your repayment behavior. An outstanding credit score will increase your loan approval chances. In other words, the higher your credit scores, the higher your approval chances.
A credit company in Singapore will consider your credit score to determine if they should approve your Singapore loan application. Your credit score is determined by the repayment of debts and the consistency in which you repay the loans.
2. Research for the best credit company in Singapore before signing up for any loan:
There are many moneylenders in Singapore, but you have to research for the one that meets your short-term and long-term financial needs with no difficulty. You should also check their legitimacy. A licensed moneylender in Singapore will have a registered business address with its website address on the list provided by the Registry of Moneylenders.
Also, check for repayment terms and the interest charged. This should help in deciding which credit company to go with. There are online lenders as well so be very thorough in your research.
3. Re-balance your debts and income
Increasing your income and reducing your outstanding debts will enhance your debt-to-income ratio. A lower debt-to-income ratio shows your lender that your current debt is under control and you can borrow more money. This puts the lender at ease since they can see that you are responsible with money and will not be a bother when it comes to repaying the loan.
4. Ensure you meet the criteria
First and foremost, you must be a citizen or have permanent residency in Singapore. Also having a valid Singapore Employment Pass (this is for foreigners working in Singapore). Some financial institutions will require a good credit score to consider lending you the money.
5. You can put a guarantor to increase your chances of loan approval:
A guarantor or co-signer to your loan is a third party in the loan contract. In case of default by the borrower, the guarantor is legally bound to repay the loan. Therefore, adding a guarantor with a more substantial credit and income can increase your chances of approval. However, it would help if you let your prospective guarantor understand the risks involved before agreeing. This guarantor can be a family member or a friend.
There are also documents required by the credit company to be able to apply for the loan and also comply with the law. Some of these documents include:
• An original and printed copy of your latest payslips. (Depending on the lender, they may go as far as 3 months or more)
• Income tax statements.
• Proof of billing that shows your residency (A phone bill or electricity and another utility bill)
These are some of the documentation that may be required by the lenders to approve your loan.
With loans being an easy source of revenue with many competitors offering different rates, it is advisable to consider why you are taking the loan. There are pros and cons to taking a personal loan.
The pros of getting a personal loan:
• Taking out a personal credit loan and consistently making the monthly payments will help increase your credit score.
• Personal loans often come with lower interest rates than credit cards.
• Unsecured personal loans don’t require collateral for you to get approved.
• The processing and receiving of funds from a personal loan is usually fast, same or next-day approval.
• Personal loans can also be used for the consolidation of debt. A single fixed-rate payment is easy to manage and may also come with a lower interest rate.
Cons of acquiring a personal loan
• If you have a bad credit score, your interest rate will most likely be higher than that of a credit card.
• You may encounter high fees and penalties especially if you miss a payment. This will not only increase the amount borrowed but also damage your credit score.
• Some lenders may require collateral against your loan. This is more likely if your credit score is low.
Before taking out a personal loan, evaluate the pros and cons and consider the necessity of the loan. If one can avoid the loan by finding financial help from friends and family the better, and there is no need to get into more debt.
However, you may take a personal loan if:
• The project at hand will increase in value. This may be home improvements or a business venture that will be profitable.
• You have a low debt-to-income ratio.
• You have a high credit score, this will get you low-interest rates.
Before taking a personal loan consider the repayment period and the monthly payments. Do not forget to also have a plan of repaying the loan and avoid extra charges. This is still a debt you are going to incur, therefore be conscious of your spending habits. Remember to consider the best credit company.