It is important for you to know certain things as a borrower if you are planning to take out a loan.
This information is not only important as part of your own risk assessment before taking up a loan, but also can help you in deciding on the kind of loan you will take up in the end, and if could be better for you to borrow from private loan lenders in Singapore.
You may know some of these things such as your annual income and credit scores, but there are other things that you need will also need to delve into before taking out a loan. Now, let’s take a look at this crucial information.
A credit score is used to check if you pay your credit obligations on time or not. And a good credit score shows that you do. So, in the context of taking out a loan, the better your credit score, is the better your chances are to securing your loans are.
A good credit score can also save you some money when taking out a loan. If a borrower doesn’t have a good credit score then lenders tend to give them a loan with higher interest rates.
This may seem obvious, but your monthly salary affects your ability to pay off a loan. So, lenders will need proof of income with your application. If you’re an employee then you’ll need to show the offer letter you got from your employer, and your most recent payslips as proof. If you’re a business owner on the other hand, then lenders need to see your company financial statements for the last two years.
Your Spending Habits
Apart from your monthly income, you need to consider your monthly expenses. Suppose you earn about $4,000 per month, this could seem like a sufficient income to maintain when taking out a loan.
But if your monthly expenses come up to an estimated $3,000, you will only be left with $1,000 to use to repay your loan. In this scenario, you will likely struggle to pay off your loan.
Liabilities and assets
The lenders might look into what you are worth. This means valuing your assets and liabilities. Your assets are things that you own that can be used as valuable collateral in the event you are unable to repay your loans monetarily.
Liabilities, on the other hand, are the financial obligations you have that would take away from your current capital. A private loan lender in Singapore would not want to give out loans to people who are already struggling with significant liabilities, because they could end up being unable to repay their loan in time.
Before you apply for a loan, be it a large sum or a smaller personal loan, you should always know your worth. The loan you are taking will become a liability whether it’s short or long term, so you need to consider that.
The Documents You Require to Take Out a Loan
To take out a loan from banks or private loan lenders in Singapore, you need to submit a few documents. The list of documents may varies between banks and authorised money lenders but the basic things are the same. So here is the essential list of documents you need to have before taking out a loan:
For Singapore national
- NRIC or Passport number
- Phone bill or power bill from Singapore
- Payslip of last 3 months or income tax statement of the last 15 months
- Self-employed individuals need to bring the income tax statement of the past 2 years
For a foreign national
- Original copy of employment pass
- Original copy of passport
- Tenant agreement of phone bill
- Appointment letter
- Last 3 months pay slip
- Bank statement from the last 3 months for proof of salary crediting
Private Loan Lenders Singapore
Following this simple guide will prepare you to take out a personal loan in Singapore, and help you be prepared for all that comes with a commitment like this.
But it’s normal to still have doubts. So if you have any questions about loaning money from a private loan lender in Singapore, just leave us a comment in the section below, or contact us at our hotlines: (+65) 62244746 (Yishun) and (+65) 62244749 (Tampines).