Top 4 Things You Need to Consider Before Applying for Your 1st Loan
Going to apply for your first loan? It is a milestone that most of the adults go through in their life, so good luck! However, before you go ahead with the proceedings, there are a few things you need to know. You may probably know some of these things already. However, since you are making an extremely important decision in your life, it is good that you remind.
1. Credit Score/History
Before approving a loan, the bank or financial institution which you apply to will do an intense background check on your finances. Especially your credit history. If you have managed your credit well so far, there should be no problem in your application. But if you have any overdue payments, it is better if you delay the loan till you can pay it off. If you cannot pay off the whole amount, try your best to pay off what you can before you apply. This is because banks will not hesitate to reject applications if they see the slightest risk of you not being able to pay it off.
The amount of loan that you can apply depends on your income, as you may probably know. Therefore, before applying for it, you need to make sure you have the needed documents in order to prove your total income monthly/annually as demanded by the bank. This usually means presenting your pay slips for a minimum of 3 months along with a letter from your employer confirming your position in the company and the salary amount. Keeping these ready will help your application and approval process faster and easier.
3. Liabilities and Assets
Another important thing that your bank will specifically look into will be your liabilities and assets. If your liabilities overcome your assets, then the chances of securing a loan will be low. However, if you are in a solid ground financially in order to comfortably pay off your loan, this will not be an issue.
While having a good income is always a positive aspect, if you have many people depending on you and if you have many obligations which cost money, then you may lower your chances of getting a loan. Therefore, if you have any outstanding debts or payments, pay them as much as you can before you apply. This is to reduce the chances of your application being rejected.
Last but not least, never apply for a loan out of convenience for your day to day life. Always make sure it is an investment for a better financial situation. Otherwise, even if it is approved, it will affect you negatively in your credit score if you will not be able to pay it off on time.
Are you currently looking to take a cash loan? If you are, always approach a licensed money lender. Be very wary of people who offer you a loan without you having to sign any contract or going down to their office. All licensed moneylender in Singapore operate from an office. We are the best money lender you can find in Singapore because of our long repayment plans and low interest rates! Do not hesitate to drop us a message if you need a loan. We will do our best to help you out! Contact us here or fill in a simple application form to let us know more about you. Through the application form, we will be able to do the basic assessment as to whether you will be able to take a loan.