Multiple banks. Different interest rates. Call it a "conflict of interest".
  • The Definitive Guide for Personal Loan Application Process

    Applying for a personal loan in Singapore is convenient and easy once you have narrowed down the list of lenders you’re targeting.However, there are certain things that you need to consider before you start filling out your personal loan application form.

    Things to Consider Before Applying

    • Check your credit score. Most banks will look for a moderately good score before they consider your application for approval.
    • If your score isn’t great, you may consider approaching licensed money lenders.
    • Try to build a good credit history. In the absence of sufficient loan borrowing and repayment records, many lenders might consider you to be an unknown risk and set tougher eligibility criteria for you to fulfil.
    • Check the eligibility criteria with the bank and see whether you meet them. Talk to a representative from the bank if you’re not confident about fulfilling all the conditions. Sometimes, banks may decide to review your case independently and may approve your application if you can establish that you won’t default on your payments.
    • Check the documents that you would need to furnish at the time of application. Keep them ready.
    • Check your total debt servicing ratio. If you have too many overleveraged credit lines, your application is likely to be greeted with apprehension and is more likely to be turned down.
    • Maintain proper records of your income because your income is one of the most important determinants for loan approval.
    • Try to space out your applications. Don’t apply for too many loans in a short span of time as it can affect your credit score.
    • Keep an eye out for promotional offers. You can save a lot if you can get lower promotional rates, or waiver on the administrative charges or the annual fee.
    • Compare the rates and terms offered by different lenders. Apply only after you’re satisfied that the loan chosen by you is the best under the present circumstances.
    • Know how much extra you have to pay once the introductory offers have expired. See, if applying for a loan on the basis of a promotional offer makes sense or not.
    • Don’t forget to pore over the fine print of the loan product before applying. Many of the important details of the loan are mentioned or explained in the terms and conditions section. Missing out on of these details can get you into trouble later on.

    Use Loan Calculator

    Use a loan calculator before applying for a loan to know the maximum amount you can borrow, depending on your financial condition. Most banks have their own loan calculators.

    Some of the common steps are:

    1. Enter your annual income.
    2. Enter an amount within your borrowing limit.
    3. Choose a tenure of payment.

    Most calculators will give you an estimate of your monthly instalments, processing fee, and effective interest rate. Planning becomes easy with such calculators.

    How Can You Apply?

    Some of the lenders have separate modes of application for new and existing customers, although some of the modes may even intersect. The following are the common modes:

    • Internet banking: Login credentials would be necessary. Hence, this mode is usually reserved for existing customers.
    • Online form submission: Most banks allow a hassle-free, paperless form of application. You can complete the form online, upload the supporting documents, and submit them.
    • Download the form and mail it: If you’re not comfortable with an online application, you can also download the form from the bank’s website, fill it out, and mail it to the bank along with the supporting documents for verification and approval. Check with your bank to see if this option is available.
    • With debit/credit card: Some banks such as POSB allow you to apply for a personal loan with your debit/credit card and the card’s PIN. You can visit any POSB ATM, follow the onscreen instructions, and apply for a loan in a quick and convenient manner.
    • Submit your details online for the bank to contact you: Some banks also allow you to submit your details online. The bank then gets in touch with you to take the process forward.

    No Documents Required for Existing Customers

    If you already have an association with the bank from which you’re thinking of taking a personal loan, you may not have to submit documents unless you want to notify them of a change. Your records with the lender will be sufficient to get the application processed. New customers, however will have to complete all the steps.

    Processing Time

    The lender may take 3-5 days or less to disburse the loan. Providing the right documents and providing relevant information would eliminate the possibility of the application going back and forth between you and the bank, and quicken the process. During the processing period, banks usually verify the details, vet the documents, and check your credit history. Once everything falls in line, your application would be approved and you would be notified.If you don’t know where to start, don’t worry. Start comparing loans on our site and choose one which fits the bill.

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