07 Feb What You Should You do If a Moneylender Rejects Your Loan Application
A rejection from your personal or business loan application can be devastating. Afterall, if you had applied for a loan in the first place, then you likely would have been in an urgent need for an injection of financial capital. Nonetheless, this is certainly not the end of the world. Instead, there are several steps that we recommend that you take to improve your financial standing.
Check Your Credit Report
For a cheap price of $6.42 (inclusive of GST) you can purchase your credit report from creditbureau.com.sg. In it you will find your credit score, which is used to determine the level of risk that creditors are likely to face in extending you a loan.
For more information on how your credit score is determined, we recommend that you check out our article – https://jdcredit.com.sg/how-is-your-credit-score-determined/
The Importance of your Credit Score
Why is your credit score relevant? Authorised moneylending is a business after all, and moneylenders look to make a profit on their loan to you. In order to do so, they would need to avoid a situation of you defaulting on your debt. As such, the better your credit score is, the lower the risk is of the debt going bad.
If your loan application was rejected, it would likely mean that the moneylender was not comfortable with the risk associated with lending you the requested sum. As such, you should address components of your credit report that you were scored poorly in.
In order to do so, you would first need to be familiar with the different components of your credit score.
Your payment history looks as your repayment behaviour for all credit, loans or instalments that you have had in the past. Common examples include that of monthly credit bills, housing and car loan instalment. Late payments or even worse, non-payments are signs that you are untrustworthy and are likely to not make good on any debt that the moneylender extends to you this time.
As such, if you have had consistent prompt payment for all forms of credit taken in the past, then you can expect a better credit score in this component.
Getting a Steady Income
While it is not possible to go back in time to change your payment history, you can reassure the moneylender in question about your ability to repay the loan moving forward. To give reassurance, you should look to get a steady income. With a reoccurring inflow of capital, moneylenders will be more confident that you will be able to make the agreed monthly repayments.
Amounts Currently Owed
If you are holding onto any existing debt, then the gross sum will also affect your credit worthiness. This situation is particularly common among borrowers looking to refinance existing loans. Should your current existing debt be at a level that moneylenders believe are unpayable, then they are unlikely to agree to refinance your loan.
Looking into the details of this component, moneylenders will also take into account the difference between interest incurred and the original principle sum. This informs them about your repayment patterns in prior loans.
Lowering Your Overall Debt Leve
Assuming that you are not in a desperate situation, do consider trying to lower your debt level before taking a new loan. If you are able to pay off some of the debt, the moneylender may be able to stomach the lower amount of risk that the loan would entail.
Length of Credit History
Ironically, having no debt or credit history is counterproductive to your attempts to get a loan. Without prior history of how you handle debts, moneylenders find it more difficult to gauge your trustworthiness. Ideally, your credit history would be sufficiently long for moneylenders to gauge your ability and wiliness to repay debts.
Addressing Your Lack of Credit History
If your credit score reports that you do not have sufficient credit history, then you and address it quickly. This would involve requesting for a smaller loan sum in which a legal money lender Singapore would be more comfortable extending to you.
Once you have been approved for this smaller sum, do take care to ensure regular and on time payments so as to prove your ability to repay the debt on time.
Naturally, moneylenders would be wary of extending you a loan if you had taken another recently. The worry here is that you may be overextending yourself with no clear idea of how to repay debts.
Abstaining from Applying for Loans for Awhile
As a rule of thumb, you should avoid taking a new loan for at least 3 months once you have been extended a loan. At your current situation, this can be difficult to achieve since you would not be eligible to get an injection of cash for awhile more. Nonetheless, if you are able to plan out your finances and wait till then, you should be able to attain the loan in a couple of months’ time.
Getting Referrals or Testimonials
Some moneylenders will also take time to look at any testimonials or referrals that you provide. Testimonials serve to illustrate the quality of your character and help to establish your trustworthiness. If you do not have credit history to reasonably predict your repayment patterns, then such testimonials may be used instead.
Enquire for a Loan from JD Credit
Here at JD Credit Pte Ltd, we strive to achieve each and every one of our customers’ needs and wants. We are an organisation that provides loans with the best rates to any individual that is approved by the IPTO (Registry of Moneylenders). Our team of well trained and experienced staffs are obliged and dedicated to help our customers with their financial matters.
Our vision is to achieve excellence when serving customers provide the best information and finest service for our customers and lead in the money lending industry.
Get the best personal loan in Singapore in no time as well as quality financial advise on how you can turn around your current situation.