Getting a loan is one of the best ways to meet both your day-to-day and unexpected finances. There are plenty of instant cash loans you can apply for in Singapore. However, sometimes, the uncertainties in the loan approval process can be intimidating, especially for first-time borrowers.
That being said, the loan approval process of many money lenders is usually pretty straightforward, regardless of whether you are applying for a personal loan, a business loan, a home equity loan, or a consolidation loan. By understanding this process, you can feel more at ease throughout the transaction. Read on to find out the usual steps you need to go through in the loan approval process.
1. Submission of application and required documents
The first step in taking out any loan is to submit the required documents and complete your application. The documents you may be required to submit will vary according to the type of loan and the amount of loan you are requesting. Usually, the smaller the loan, the fewer documents you have to submit. The most common types of documents necessary to get a loan include your original NRIC, the latest three months of original payslip, and your original PUB bill or handphone bill stating your residential address.
2. Loan underwriting
Once you have completed your loan application and submitted the required documents, the loan then moves on to the step of loan underwriting. Here, an analyst will be assigned to work on your application. They will commonly evaluate your loan using some form of the Five C’s of Credit: Capital, Character, Capacity, Conditions, and Collateral.
There are several items that will be taken into account in doing this evaluation, such as your credit scores, repayment history, cash flow or earnings from employment or business, available cash reserves, overall economic conditions, collateral being offered, and others. The time in loan underwriting often differs according to the request’s complexity. Usually, the more parties involved, the longer time it takes to organise the information and come up with a decision.
3. Decision-making and pre–closing
Once your loan request has been decided on, you will be provided with a response as soon as possible. If your loan application is approved, the terms and conditions of this loan approval will be communicated to you. If you accept these terms and conditions, the money lender will then order some loan documents, an appraisal, a survey, and other required items, which typically vary based on the type of loan you are applying for.
Once the necessary items are received by the money lender, they will then be evaluated to make sure that they meet the standards and requirements of the loan approval. After everything is set in order, the closing of the loan application will be scheduled.
4. Closing
Once you have reached this point of the loan approval process, the stress and anxiety that come with waiting and gathering the required documents and items are essentially done. The loan closing usually happens at either the office of the money lender or at an attorney’s office. At this point, the necessary loan documents and transaction-specific documents should be signed, and the funds will be disbursed in accordance with the approval.
5. Post-closing
Finally, after the loan is closed, the transaction will be wrapped up, and a welcome message will likely be sent to you. This message often includes details about the money lender and information about when and where you should make your payments. Essentially, post-closing, you will receive documents or information that summarise your loan or promote the benefits of patronage and its effect on your loan rates.
Conclusion
Although how the loan approval process is carried on varies according to the practices of the money lender, the common steps discussed in this article are the ones you are likely to encounter if you are applying for a loan from a legitimate licensed money lender. Understanding these steps before you apply for a loan is very important to reduce your stress and anxiety and increase the chances of your loan getting approved.
If you are a first-time borrower and you are in search of the most reliable money lender with fast loan approval in Singapore, Orange Credit is the one you need! We are an established licensed money lender in Singapore, providing an array of quick and easy cash loans that come with favourable terms and a hassle-free application process. To get started with any of our valuable loans, do not hesitate to get in touch with us today.
