Is It Difficult To Apply For A Personal Loan In Singapore?

Whether you are a Singapore citizen, permanent resident, or foreign worker residing in Singapore, securing a personal loan in Singapore has never been easier. As long as you qualify for the type of loan you are applying for, the process is pretty simple, quick, and straightforward. If you’ve reached a tough spot financially and are in need of emergency cash by getting hold of personal loans with the lowest interest rates, here are some tips you should follow when considering applying for a legal loan in Singapore.

1. Check your credit score

A credit score is used by banks, financial institutions, or licensed money lenders to gauge the likelihood of you paying off your loans on time. If you want to get the lowest personal loan rates, you have to have a substantial credit profile that shows a higher credit score or rating.

The higher your credit score, the more likely you are to get approved for a personal loan in Singapore as it shows creditworthiness. As these credit reports are sourced from a credit bureau, you will also be able to source your own credit report by requesting a copy online or from Credit Bureau Singapore for $6.42.

2. Don’t apply for too many loans at once

For a smooth sailing loan application process, you have to ensure you do not have too many loans running at once. When you apply for too many loans at one go, lenders will raise an inquiry with the credit bureau to evaluate your creditworthiness. These can be considered hard inquiries where a lender is initiating a credit inquiry on behalf of the borrower.

Bear in mind that with each direct inquiry from a legal moneylender, there is a possibility that the loan evaluation process will be further scrutinised. Rather than having multiple credit inquiries, it is much more ideal to figure out the various types of legal loan options available and identify the right fit before applying for a loan.

3. Plan your budget before applying

As with all financial plans, it is best to budget well at the very beginning, before you even apply for a loan. This step is crucial to ensure that you can repay the loan on time to avoid late fees and extra charges. If you have a gauge on the range of monthly instalment payments that you are financially able to commit to, it will be much easier to choose the type of loan in Singapore.

Doing it this way would mean that you would already know the maximum interest fee you can commit to. Budgeting wisely also requires you to look at timelines to help you work out a comfortable repayment agreement or loan tenure.

4. Prepare substantial proof of income

You must have the right documents so that you can have a smooth sailing loan application process. These include your NRIC; proof of income and employment documents such as your last 3-6 months of payslip or income tax notice of assessment (NOA); current credit report; past CPF statements; proof of residence or tenancy agreement; employment letter; employment pass and bank statements (for foreigners).

It is usually not difficult to secure proof of income for employees having a monthly salary arrangement. However, other employment arrangements like commission-based work or self-employment may prove more complex for verifying future income. Regardless of the reason, it is usually a must for borrowers to find a way to prove that they will honour their debt.

If you are applying for a personal loan without formal proof of income, you can consider showing past bank statements that indicate regular payment from an employer or credit card statements to show that you have paid your bills on time. The credit history reflects your past credit management so it can be used as an indicator of creditworthiness. Documentation of annual tax returns from IRAS can also help your cause. You should also protect your credit score to get a higher rating. Lastly, you can also consider providing a larger amount of downpayment to secure a reasonable loan tenure.

Ultimately, applying for a personal loan in Singapore is not difficult. As long as you follow the tips above and ensure you have the necessary documents on hand, you will experience a quick and seamless application and approval process.

Interested in securing a personal loan in Singapore? We’re a 24 hours money lender in Singapore with online loan applications all day long. Simply fill out the necessary details and we’ll schedule a face-to-face appointment for verification and loan approval purposes. Once all is well, you can expect to receive your cash in a jiffy!

About the Author

Hamizah Salikimen

A well-rounded media specialist, Hamizah is a storyteller, content strategist, and data enthusiast with a demonstrated history of working in various industries; including media, publishing, fintech, tech, and real estate.