Getting your loan application approved is one of the best things that you can do for yourself. There are so many people who have long looked at loans as a lifeline. This one is especially true for those who live in Singapore.
Obtaining a loan is like a right of passage in the country. Everybody goes through the process, and everybody aims to make everything worthwhile while getting over their financial hump.
With that in mind, the following are some of the ways that every individual could look at to ensure that their loan application will get approved as soon as they apply for it.
What Are The Tips That You Should Know?
When it comes down to brass tax, there are a few things that every person must know for him to have an easy loan application and they are listed below.
- Understand the TDSR (Total Debt Servicing Ratio) framework
One of the most important parts of getting a loan is getting approved for it. Some individuals are shocked when they do not get approved for a loan for one reason or another, but this one should not be the case. If you are lucky enough to understand the process of the Total Debt Servicing Ratio (TDSR) framework, then you know that you can do whatever it is that you want to do with it.
What does this mean? The TDSR is a legal framework in Singapore put in place by MAS (Monetary Authority of Singapore).
The intention is to make sure that people do not engage in high risk financial behavior. There are many characteristics to risky financial behavior and they are the following:
- When an individual is over-extending himself financially through loans, he is playing a risky game. Hence, the MAS steps in and prevents the person from over-extending himself by limiting the amount that a person can be lent, taking into account that person’s financial standing.
- When an individual is getting different loans to pay for wants and not needs, the MAS stops them by making sure that he does not overextend the experience.
- Finally, when you are in a lot of debt, and it is already seemingly out of control, the MAS rules and regulations would step in.
- It is also important for one to watch market conditions.
The financial market is an important indicator of when the loan applications are good. Sometimes, banks are stricter in approving loans during holidays as people tend to apply for loans when they receive their bonuses.
The market performance of the economy is also a great indicator of the market, and just how well it is performing is paralleled to how positive loan approvals can get.
The point is simple: if you make sure that you time your loan properly, you can get approved.
- Make sure that you have a good account history
Your account history says a lot about who you are and what you do. Banks often look at good account history as a sign of whether or not they should extend a loan to you while licensed moneylenders often do not care much about your past credit history. Hence, make sure that you maintain having a good account history, and everything else will follow.
- Always have your documents ready.
You should always have some documents ready when applying for a loan. Some of the documents required banks for the loan application evaluation process are the following:
- CPF Contribution History.
- NRIC or Passport;
- Income Tax Assessment Notices;
Foreigners are required to present other documents, but in Singapore, they are also allowed to obtain loans.
- Always do your research before committing
Before making any commitment, you should learn how to do your research and never to be persuaded by reviews from people you do not know. The worst thing that you can do is to let yourself be eaten up by confusion.
Now that you know the importance of the abovementioned tips, it would be easier for you to do your research and always make an informed opinion about everything that you need.
After knowing the tips, what is next?
Before going ahead and applying for a loan, there are a few things you need to ask yourself first:
- What is my specific need? Sometimes, people borrow loans and put them in the wrong purpose. This one makes the loan out of place. For better use of a loan, make sure that you know your specific need, and you stick to it so you can borrow money and put it where it needs to be spent.
- How will I maximize the use of the money? When you have money, controlling your spending can be a problem. If you want to make sure that you do the right thing for your loan, know where you are putting it before using it.
- Can I earn using the money? Some people think that getting loans is just for those who need it, but they also need to realize that they can also maximize the use of loans by making sure that they use it to earn money.
Make Well Informed Financial Decisions
The best tip that any financial expert would tell you is that you need to make well informed financial decisions. Whether you are in need of money, looking to expand a business, looking at continuing your education, or just in case of some breathing air for your finances, loans can help you. Just make sure that you study every aspect of the loan, and you will have all of the best things that you can ever imagine with your finances. For everything else, contact a financial expert who can help you get that much-needed level of information that you need for any decision that you will make.