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Poor credit score will affect your personal loan applications

by • July 11, 2019 • Personal LoanComments (0)108

Sometimes personal loan applications get rejected because of poor credit score due to misreported bank finance charge.

By: Hitesh Khan/

Given that your poor credit score might be caused due to something accidental and unexpected, like misreported bank finance charge, your first logical step should be to review your credit report and fix whatever is possible as this can really help in broadening your options for personal loans in the future. There are agencies which can help in repairing your credit score quite successfully and you should consider these as your first option when thinking of a personal loan with having bad credit.

First of all, it is important to understand the nature of a personal loan. Unlike a home loan or a car loan, a personal loan is unsecured, meaning that you are offering no collateral to secure the loan. That makes the loan inherently risky for a bank or other lending institution.

poor credit score

Image credit: CafeCredit – poor credit score will affect you personal loan applications

In order to determine whether you can qualify for bad credit loans, it is first necessary to fill out an application. A typical personal loan application requests your full name, identification number (NRIC, passport or FIN number), income, and other pertinent financial information. A loan officer must determine your credit worthiness, even in the face of your bad credit history.

With a personal loan with a licensed moneylender, you may not have to undergo a credit check. The money may be deposited within 24 hours into your bank account. You can use the cash for virtually anything—but especially for emergency situations. However, the amount you can borrow may be limited to no more than $35,000.

If you have a poor credit score, a loan officer may assist you in making your application more appealing by encouraging you to borrow a smaller amount of money or make payments over a longer span of time. In this way, your monthly payments can be lowered, increasing your chances of getting a loan.

The loan officer must also determine whether you have a steady income. Even with poor credit score, if you have held the same job for a number of years, for instance, you’re more likely to obtain the loan. However, if you’ve changed jobs several times over the past few years, you may be less likely to get the loan you want.

The application process for a personal loan from a licensed moneylender is usually relatively quick. Another advantage is that it does not require a formal closing. The application process consists of a written application, a promissory note, and a payment schedule. As a result, there is less paperwork and hassle involved in obtaining a personal loan than in obtaining a secured loan.

At times, it may be possible to obtain a personal loan from a professional organization to which you belong. The main advantage to such a loan is that the annual percentage rate, or APR, may be much lower than the rate you would get at a traditional finance company. For instance, you may be able to get an APR for as low as 4.99 percent, which would be considered a real bargain for a personal loan. You also may be able to borrow a great deal more money from a financial institution than you would be able to borrow otherwise—the amount you can borrow may be as much as $35,000.

With such a loan, you may be able to defer payments for a period of a few months. You also may face no penalty for early repayment. The terms of the loan may also be quite generous, allowing you to make payments over a period as long as 60 months. You can use such a loan to consolidate debt, pay education expenses, or pay home improvement costs.

The answer to judiciously managing a bad credit personal loan is to work out the numbers and determine how soon you will be able to repay the borrowed amount. You should plan to borrow only the lowest amount you need in your situation and plan to make monthly payments that are higher than the minimum monthly payment required. The idea finally is to the sooner you are able to pay back your bad credit personal loan, the better it is for your financial future.

How to Secure Personal Loans Quickly

If you are in the debt overload zone and are searching for personal loans to ease your crunch, the loan consultants at iCompareLoan can set you up on a path that can get you a it in a quick and seamless manner. Our loan consultants have close links with the best lenders in town and can help you compare various loans and settle for a package that best suits your needs. Find out money saving tips here.

Our Affordability Tools help you make better property buying decisions. iCompareLoan Calculators help you ascertain the fair value of a property and find properties below market value in Singapore.

If you are looking for a new home loan or to refinance, our Mortgage brokers can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us for your business expansion needs.

Contact us for advice on a new home loan.

Contact us for home loan or refinancing advice.

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