Every person, may they be rich or poor, will always have a time in their life that they need fast cash because, for some reason, they do not have some on hand.
In order to respond to this sudden need for funds, they would look into personal loans which they can borrow: from a variety of sources, from banks, family, friends, to moneylenders. If used wisely, personal loans can help a person improve their way of life.
However, personal loans do come with pros and cons based on your current financial status and need. If you are intending on getting a personal loan from a moneylender or any other financial institution, here are some tips that can help you get it approved:
- Open and maintain a savings account
When applying for a personal loan, it is important that you can show that you have a good source of income and financial standing.
Owning a bank account and maintaining it is one good way to make a good impression to moneylenders since it will show them that you can make regular loan repayments. It does not need to have a “huge” balance, but it should reflect that you are regularly making deposits and less of the withdrawals.
One’s credit history does reflect the number of bank accounts you have, especially those which have been closed. If you have more closed accounts than new ones, it can be a sign to lenders that you cannot manage your finances very well.
- Maintain your credit rating
One major factor in showing that you will be a good borrower for moneylenders, banks and other lenders is your credit history. Even if you do not apply for a loan, simply maintaining a good credit history will make them love you should in case you do seek for their services in the future. Your applications would also be approved easily and they will give good rates.
Unfortunately, if you do have poor credit card usage, bounced checks, closed accounts, and unpaid loans, it will be a bad mark on your credit rating. Lenders will see these notes on your credit history and may be the cause for you to get denied of your application.
- Apply for your ideal loan principal
While banks and moneylenders will consider your financial status when basing the amount that you can borrow for your personal loans or any other loans, it is still ideal that you are well aware of the amount you intend to borrow. This amount should be well within your capacity and not over it.
If you press in borrowing more than what you can pay for, it can lead to two things. First, the lender may reduce your desired amount to something you can manage but still high than your capacity. The second is your loan application will be declined since they will think you cannot pay for what you will borrow.
- Provide the right details
When applying to anything legal like personal loans, it is important you provide accurate and updated information about yourself. Moneylenders and banks will definitely check up on your major details when you apply, and even call up those you will list as a reference. Banks, in particular, regularly call their clients to ensure that their personal data is up-to-date.
When you get a call from the bank or moneylender, always answer their call when you apply for a loan. If you do not answer your phone, your loan will not be processed. If any inconsistencies are in your information, it is possible your application will be denied or it will take a while before it is approved.
- Get the best deals and speak to the right moneylender
Personal loans are offered in various plans and terms to call on to clients looking for good deals. Some personal loans offered to come with longer loan terms and low-interest rates. Others have short loan terms, but high amounts.
When looking for a personal loan, aim for the one that fits your capacity. Check the monthly payments, interest rate, and loan terms and contrast it with your monthly budget.
If your monthly budget and financial status can handle it, pick the one that works for you. If you cannot find a good loan program for you due to certain aspects of your finances, you can always ring up your moneylender and ask if they do flexible options.
Also, it is important you research the right moneylender for the job and not fall prey to loan sharks. Check the official list of approved moneylenders from Singapore’s Ministry of Law to see the names of these lenders. These lenders will give you the currently approved rates in the country and they will explain the loan process to you.
The rates are also very stable with licensed moneylenders and should there be any changes, borrowers are informed immediately.
Loan sharks do not explain the entire process to borrowers and do not even provide a contract that details the loan requested. When you meet troubles during your loan, loan sharks will use force to pressure borrowers into paying. Their rates and fees also fluctuate and often times, they do not inform clients about these changes.
- Do not rush things
If you want to borrow money, do not pile yourself with a lot of loans all at once. It will tell banks, moneylenders and others that you are not a good borrower and put you as a high-risk borrower. Inquiries are also listed on one’s credit report and that can spell disaster for your application.
If you plan to borrow money a lot of times, only take out one loan, pay it and borrow again. If the moneylender sees that you paid off your loans without any problems, they will likely grant you a higher amount when you borrow again. They can even reduce the interest rate if you are a returning good client.
Getting a personal loan requires a lot of research and thinking before you sign up for one. You have to make sure that you really need the money and it is your only option. When you have decided upon a loan, borrow what you can pay to ensure you do not meet any problems and borrow from those you can trust.