With more than S$39,000 million in consumer loan borrowings in October 2014 alone (as per data published by the Monetary Authority of Singapore[MAS]), it is pretty apparent that personal loans are a popular loan / financial product with Singaporeans, especially given the generic and highly flexible nature of the product. And, most Singaporeans would have experience availing of or applying for a personal loan. We’ve tried to put together a few pointers that could help you obtain quick approval on your personal loan application:
Apply with your regular bank – Put your existing banking relationship to good use! Your regular bankers would already have a pretty good idea of your financial history and current financial status based on your banking with them. If you have already applied for and repaid a loan with them or if you have a credit card issued by them on which you are maintaining a good credit standing (for example, by making payments in full every month) you would have established a good credit history with them. So, if you apply with them they would be in a position to process your application faster.
Check your DSR – To put it simply, your Debt Service Ratio is the ratio of your monthly debt obligations to your monthly income. As a rule of the thumb, banks in Singapore generally look for a DSR of around 50%. Calculate your DSR by totaling your monthly debt payments (credit cards payments, any loan installments etc) and subtracting it from your monthly income.
Ensure a healthy credit score – The Credit Bureau (Singapore) Pte Ltd and the DP Credit Bureau Pte Ltd are gazetted by the Monetary Authority of Singapore and you can obtain your credit score from them on payment of a relevant fee. A good credit score helps you gain faster loan approvals; if not, take steps to bring up your credit score. Remember, the MAS prohibits the grant of credit to a borrower whose debts with a Financial Institution are 60 days or more past due.
Keep all your paperwork ready – Every loan application needs to be accompanied by evidentiary identity and income documents. You can expect the lending bank to ask you any of the following: copy of NRIC or passport, CPF contribution history, latest Income Tax assessment notices, latest computerised pay slips, bank statements etc. And, if you have variable income you will require documentary proof of the commissions you receive, fees from clients, rent collected etc.
Keeping all the required paperwork organized and ready will help you to quickly submit a loan application and get a faster response.