If you just got your moneylender loan rejected, you are not alone.
In this article, we explore some of the reasons why your loan application may have been turned down and what you can do to improve your chances of being approved next time.
Follow these steps, and you will be one step closer to getting the cash that you need.
You may have gotten your moneylender loan rejected for any of the following reasons:
People usually have bad credit because they do not pay their bills on time, open too many credit facilities, or have too much debt. If you have bad credit, your loan application may be rejected because it shows you have a high risk of defaulting on your loan.
Having bad credit is not the only reason that your application gets rejected. Insufficient credit history means there is insufficient data to show that you are a low-risk borrower.
Your debt-to-income ratio (DTI) is the percentage of your monthly income that goes towards paying off debts. A high DTI ratio indicates that you may have trouble making your loan payments on time.
Collateral is an asset that can be used to secure a loan. You need this for borrowing larger amounts or if you have poor credit.
Applying for too many loans is a mistake.
Unlike popular opinion, doing so will not increase your chances of loan approval. Instead, it will signal to lenders that you are desperate and lower your chances of getting approved.
Pro tip: Use a personal loan calculator in Singapore to find out if you qualify before applying.
If you do not have a steady income or if your salary is low, it is likely that your loan application will be rejected.
You may have gotten your moneylender loan rejected because you were asking for too much money.
In this case, the lender may view you as a high-risk borrower and may be less likely to approve your loan. Or you may simply not meet their eligibility requirements.
Each lender has criteria that borrowers must meet to be approved for a loan. Your loan application will likely be rejected if you do not meet the requirements.
Misspelling your name or not including all the required paperwork in the application leads to rejection.
Here are some tips to avoid a rejected loan application.
Using collateral or having someone co-sign your loan is the best advice on how to get a bank loan with bad credit in Singapore. This is because these strategies decrease the risk of default.
Your bank is more likely to agree to a loan when they have a safety net, meaning a way to retrieve its money if you cannot continue repaying the loan.
It is essential to review the loan conditions and make sure you fit the requirements.
For example, you may not qualify for a $10,000 personal loan with bad credit in Singapore, but you may be eligible for a $10,000 renovation loan.
Do your research and apply only for a loan you are sure of getting. That means comparing different money lenders’ offers to ensure you fit the requirements.
It is best to apply for a lower sum through a bad credit loan, for example, than aiming for a massive amount you are unlikely to get.
Make sure you have mentioned all income sources to access your desired amount. Do not omit income from rent, alimony, or interest from deposits.
Double-check all the information you have filled in and the paperwork attached to your request.
Applying online for a loan is more convenient, but it is often not the best way.
If your credit rating is poor or you have a low income, consider visiting your money lender’s headquarters directly. This way, the loan officers can guide you with customised solutions, lowering your chances of loan rejection.
If you have gotten your moneylender loan rejected now, don’t worry. You can always turn things around following the advice below:
Focus on paying off your debts first to improve your chances of getting approved. Once you’ve paid off some of your debts, you can start building up your credit history.
Take out a small loan and make all of your payments on time. This strategy will show credit institutions that you are a responsible financial customer.
A (larger) downpayment shows the money lender that your purchase is well thought-out and you are also serious about repaying your debt.
Here’s how to check your credit score in Singapore:
Request your report from Credit Bureau Singapore, online or at any branch. Next, identify the problems and correct them by repaying outstanding bills or debt, or sleuthing computer errors.
Consider alternative income sources or get a steady job if that is the main issue.
If you have read this far, you understand there are ways to get approved for a money lender loan with bad credit in Singapore. The key is understanding your financial situation, building your credit history, and applying for the right loan.
Have any questions or need financial help? Know that 1AP Capital specialises in all types of loans, even if you have bad credit. Our knowledgeable and customer-friendly agents are at your service.