It may be very difficult to approach banks with a bad credit score in hand. So how does one go about doing so when in need of emergency funds? A lot of financial institutions do not even consider the applications of those with a bad credit score.
Luckily for borrowers, there are reliable moneylenders in Singapore that are willing to give out loans even to those with a bad credit history. Read on to find out the considerations to make and the requirements to know of when applying for loans with a bad credit score.
What to consider with a poor credit score
When applying for loans with a bad credit score, do not just delve into any option available. In doing so, one is doing oneself more harm than good. Take time to research the best moneylenders to borrow from. The first thing any borrower should look out for is low-interest rates.
Although loans for bad credit may accrue a high-interest rate, some moneylenders offer relatively lower rates. So, make sure that the moneylender selected offers a low-interest rate. Aside from considering the repayment terms, try to find a flexible one that allows for payment in installments rather than a one-off payment in its entirety. Other than that, try to double-confirm the timeframe in which repayment is expected to be made. If the duration is not a comfortable one, consider other options like a monthly installment loan in Singapore.
Other factors to consider
Any prospective borrower is bound to come across a sea of moneylenders online with a simple search, but how does one make the best decision from the options available? Firstly, make sure that the moneylender selected has a straightforward application procedure. In the event where one does not fully understand the terms and conditions of the loan, do not be reckless in applying for it.
To opt for a secured loan or an unsecured one depends on what is favorable for an individual’s financial situation. With a secured loan, collateral is required to obtain the loan. With unsecured loans, on the other hand, there will be no need for collateral. However, in most situations, unsecured loans usually have fairly high-interest rates for borrowers with bad credit as compared to secured loans. If it is an emergency situation, it’s crucial to consider how soon the moneylender will be able to disburse the sum of money as well.
How you can qualify for loans with bad credit
The first step to take to determine if one qualifies for this type of loan is whether or not one is above the age of 18. Also, some lenders may give preference to borrowers living in the region e.g. licensed money lender in Geylang.
Some moneylenders in Singapore may also require a co-signer or guarantor with a good credit score before considering a loan application from someone with bad credit. It may also be necessary for a borrower to table his or her employment history and provide bank statements or any other form of documentation which the moneylender wants to look at.
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