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Securing a personal loan has become increasingly prevalent in Singapore. Unlike other types of loans, a personal loan is not backed by real estate or other assets. Instead, these loans rely on the borrower’s integrity and creditworthiness. However, if you’re new to the process, applying for a loan can be challenging.
Once you have decided, you just have to find out where and how to apply for a personal loan. It’s important for you to know the right steps for a personal loan application. In this blog, we have compiled a list of some essential steps that make your personal loan procedure seamless!
How Personal Loan Works?
When undertaking a personal loan in Singapore, a licensed moneylender will provide you certain time and interest rate to payback. You can pay back your loan in several monthly instalments. You can also get an estimate of the repayment amount by adding the principal loan amount and interest on the principal amount.
7 Crucial Steps to Apply for a Personal Loan
Step 1: Identify the Purpose of Your Loan
The initial step in the application process involves determining the purpose of your personal loan. Whether you’re seeking funding for a significant purchase, covering wedding expenses, or financing home renovations, it’s crucial to clearly define the purpose. Failing to do so may result in using the funds to pay off credit card debt or handle unforeseen expenses.
Whatever the reason is, you have to be clear on the right amount for your requirements. You will not be able to pay the loan back on time if you borrow too much.
Step 2: Elevate Your Financial Situation
After establishing the purpose of the loan, it’s essential to assess your financial situation to ensure you can manage the monthly payments. Evaluate your income and anticipate any upcoming expenses. Additionally, review any existing debts that require repayment or funds that should be set aside. Only when you have a comprehensive understanding of your current and future financial circumstances should you start exploring potential loan options.
Step 3: Search Your Loan Options
In Singapore, you will find a plethora of personal loan choices. Loans are available from numerous banks and financial institutions to suit a range of needs, budgets, and preferences. You have to consider your options since they will differ in terms of interest rates, fees, loan periods, requirements, and more to ensure you obtain the finest loan for your needs. It’s important to be aware of the legitimacy and reputation of the loan source to ensure you aren’t being duped. However, if you are manually comparing dozens of possibilities, this procedure can be quite time-consuming.
Step 4: Check Your Eligibility
To apply for a loan, two primary prerequisites are being a permanent resident of Singapore and being at least eighteen years old. Various lenders may have more specific qualifying criteria, such as annual income, employment status, and credit score. It is essential to confirm your eligibility for the intended loan, as meeting these criteria increases the chances of your application being approved. Utilizing a loan calculator can provide valuable insights into crucial details about the loan.
Step 5: Complete the Application Process
In Singapore, licensed private money lenders and authorised financial institutions have different application processes for personal loans. When submitting your initial application to your money lender, you will need to provide the following essential documents:
- NRIC
- Income documents
- Residential documents
Step 6: Wait Your Loan Approval
Compared to private money lenders, authorised financial institutions such as banks typically take longer to accept loan applications. The latter may approve Your loan application in a day or two, while the former often requires at least two weeks to approve.
Step 7: Receive Your Loan
The final step is signing on the dotted line, but keep in mind that this must be done in person at the office of your money lender. Exercise caution when engaging in online transactions, as this process is exclusively finalized through in-person visits to the offices of licensed money lenders in Singapore. Upon completion of the signing process, you will promptly receive the loan amount, and that concludes the entire procedure.
Conclusion
In Singapore, loan applications can be both stressful and intricate, leading individuals to pursue this process only when genuinely in need of funds. Nonetheless, by adhering to these straightforward steps, the procedure can become more efficient and less daunting, making the loan application considerably smoother and less stressful.
If you need a personal loan, choose Best Licensed Moneylender. We assist you in completing your project and provide the best funding in Singapore with a monthly flexible repayment schedule that you can customise to your needs. You can connect with our team and discuss your loan requirements!
