When you have an existing loan with a licensed moneylender, it should be in your best interest to keep a good credit record for a few reasons – it increases the likelihood of getting a future instant cash loan, debt consolidation loan or other types of loan applications approved, and it will also help you get a higher loaned amount should you need it in the future.
Sure, you might think you’re only applying for a loan now because you found yourself in a financial pickle that you vow won’t ever happen again.
But you never really know when you will need another emergency boost on your finances, and if you do need another loan in the future, you’ll thank yourself for maintaining a good record with your moneylender.
If you’re wondering how you can keep your credit or loan records on the positive side, read on as we discuss further.
1. Familiarise yourself with what goes into a good credit record
If you want to maintain a positive record, the best first step is to precisely know what makes a good record and what makes a bad one.
In general, the following plays a considerable role in determining how positive or negative your credit records are – loaned amount, your repayment terms and ability to meet them, and previous records, if any.
2. Listen to your loan officer
When you get your loan application approved, a loan officer from your choice of money lending company will be with you to discuss the terms and conditions of the loan you applied for.
At this stage, be sure that you listen intently and understand what they are saying because you would want to comply with these terms if you want to maintain a positive record with them. This discussion will cover essential things to take note of, such as the interest rates, late payment fees, and repayment terms, to name a few.
3. Pay your loans when they’re due
As mentioned, your loan officer should have discussed with you your repayment terms before your loaned amount got disbursed. It is vital that you repay your loans on the agreed schedule for three primary reasons – so you don’t incur late payment fees, so your interest rates wouldn’t be a rolling snowball in effect, and so you can keep a positive record.
Chances are, your repayment terms will fall on a monthly basis. It would be helpful to mark your calendar ahead of time so that you wouldn’t miss out on your repayment’s due date. If you have many different loans to keep track of, getting a debt consolidation loan from an approved debt consolidation company can help simplify your payment schedule.
4. Maintain a good financial habit
If you’re able to meet your repayment dues with ease, you probably are good to go. But if you’re struggling to meet them, you might want to come up with new debt repayment plans to handle your finances.
When applying for a loan, the moneylender has considered your income when determining how much money they will lend you and how often you should repay them. That’s why it’s almost impossible for them to grant you a loaned amount that is way beyond your repayment capabilities.
Should you struggle to meet your financial dues, try cutting down on your unnecessary spending. If you do it right, you’ll not only be able to pay your dues, but you might even get to save some money.
5. Only apply when necessary
Just because the requirements to apply for a loan with a moneylender in Singapore aren’t strenuous doesn’t mean that you should go ahead and apply for a loan even when you don’t need it. If you want to make smarter financial decisions, only apply when absolutely necessary, such as when an emergency arises or when you want to start your own business.
All loans come with interest charges. However low they might be, it’s ultimately best not to incur them when you have the finances to get what you need without getting a loan.
Determining your actual credit record is a very technical process involving much number crunching and timekeeping. But to make a positive one happen, your best move is to understand the terms you agreed upon with your moneylender and maintain good financial habits, so that you can prove yourself to be a reliable and trustworthy borrower.