5 Tips to Getting a Loan Application Approved in Singapore

by • January 19, 2015 • Personal LoanComments (0)8241



A personal loan in Singapore is a great way to access a line of credit to enable you to undertake some personal project. However, it can be a challenge to go about this process since there is a chance that the loan application will be rejected denying you access to those much needed funds. This can severely curtail whatever plans you had for the money. However, it is possible to ensure that your loan application is approved.

Here are 5 essential tips to ensure that you get that personal loan in Singapore.

1. Understand the Total Debt Servicing Ratio (TDSR) framework

The Total Debt Servicing Ratio (TDSR) framework is a legal framework put in place by the Monetary Authority of Singapore. It is intended to ensure that people do not engage in risky financial behaviour. It prevents someone from over-extending themselves financially through loans. This is achieved by limiting the amount that a person can be lent taking into account that individual’s financial standing. In most cases, the ratio is 60% of your income but maybe lower or higher. Making sure that your TDSR standing is okay before applying as well as applying within the limits provided by it will certainly make the approval process much smoother.

2. Watch market conditions

The market is a great indicator of when loan applications are likelier to be approved. The amount of credit available is affected by how well the market is performing at the time. When the economy is performing well, the market is more stable and therefore credit is more easily available and at cheaper rates. By choosing to make your application at the right time, you ensure that getting approved becomes a cinch. Furthermore, you also ensure that you get the most favourable interest rates and loan terms possible.

3. Build a good account history

A good account history refers to the relationship between you and the institution from which you are seeking the personal loan. For example, having a checking account or your salary paid into an account in the institution creates a good account history. Using the facilities provided in a good manner such as avoiding over-drawing your account or missing payments, builds a good history. Good account history not only helps you lock in an approval but also ensures that you get the best terms possible. It can result in a significant different in the interest rates offered by the institution.

4. Have your documents ready

The documents required by the bank for the loan application evaluation process must be availed at the first instance when required. Some of the possible documents you might need are Income Tax Assessment Notices, Digital Payslips, Copy of NRIC or Passport, CPF Contribution History. They may also require that you produce documentary proof of the income received where you work on some form of variable earning scheme such as commissions. These documents must be ready and available whenever the bank asks for them. Failure to produce some of these documents may lead to an automatic rejection.

5. Do your research before committing

Before taking a decision, you must have all of the relevant information to ensure that you make the correct decision. This means that you must have information on the relative rates of interest across the possible lending institutions. You must also have an understanding of the standard terms and conditions attached to a personal loan. Getting this information means doing a little research across the board before narrowing down choices.

It is especially useful to speak to an employee of the institution knowledgeable about such matters. An employee such as a bank manager can breakdown for you what their loan terms and conditions mean. Remember, the research process is also meant to help you identify the best fit for your needs.


Ensuring that your personal loan application in Singapore is approved is simply a matter of preparation. Having the right information and seeking the facility from the right institution comes from proper preparation. It is important to seek assistance with more complicated aspects of the process like the TDSR calculations. Remember, employees in these institutions can be a great resource if used right. Asking them for assistance and guidance especially in understanding what is required is encouraged. Following these tips will make the process to getting an approval on your loan application quite streamlined and trouble free.

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