Having debts is no good for improving our personal finances but sometimes it cannot be helped. When times are tough, we have to look for ways to meet both ends and that sometimes mean considering personal loan. Only few here in Singapore can say that they are debt-free. There is always something to pay like credit card balance or mortgage.
Actually, there are some people who spend more than their monthly income. If you fall under this category, you where will you get money for hospital or car repair costs? It is important that you have emergency funds. When these things arise, you have nothing else to consider than personal loans. Personal loans will serve as your quick answer. You can borrow a specific amount of money and pay it back in a monthly basis plus the interest.
You can apply for a personal loan but you have to be prepared because sometimes, you will be turned down. Not all times you can have an approved personal loan. Financial institutions need to prove your standing as a borrower before they can approve the loan application. It is easy to prove your credibility but there are things that you can do to expedite the process.
Here are some things that you can do to get your personal loan approved quickly:
- Improve your credit: When you apply for something, it will come down to your history. The history will tell the institution of your abilities. In this case, the institutions will gauge whether you are a trusted lender or not through your credit history. Do you pay your balances on time? If you do, the banks will think highly of your good standing. There are many ways that you can improve your credit history. As mentioned earlier, you have to pay your bills on time and in full. It does not end there for you have to spend less than your limit amount. Exhausting it won’t help your history.
- Exercise discipline: Speaking of improving credit, you need to be a disciplined borrower so you can be considered. Granting you have three credit cards and you pay in full all the time. You also have to pay your car loan as well as mortgage. The bank will consider you instantly if they know that you can handle multiple credits and regularly paying them.
- Be realistic: Only apply for a loan that you can pay. You have to be realistic about this. Your loan payment should not be more than forty percent of your monthly income. If your loan payment is more than forty percent, there will be no space for additional expenses and then you have to find another loan which is not good for your personal finances. You need to be familiar with your Debt-to-income ratio or DTI. DTI is your debt divided by your (gross) monthly income. You need to keep DTI low so your bank will approve.
- Show proof of income: It is normal that when someone lends you money, they expect that you can pay it back. In the case of banks, they need proof of income. They need to know that you have a regular income. Employed people have better chances of getting loan approval. Make sure to keep your certificate of employment and your payslips. Self-employed individuals can still apply for loans but they need to procure other documents like income tax return, licenses and permits and financial statements.
- Do your research: It is imperative that you do your research first before considering one bank or institution. The trick here is to look for banks with low interest rate and flexible mode of payment.
The tips mentioned above can help improve your chances of getting approved. With your loan money, hopefully things will be better. It should cover what you intend it to be. You have to remember though that you should not depend on loans. Do not make applying for loans a habit because it can destroy you instead of help you at the end of the day.
If you can help it, do not consider loans. The annual interest rate could have been used for something more important. Use the loan to your advantage. As long as you are disciplined, nothing could go wrong.