A credit score is a three-digit number that helps the lenders to know if the loan borrower is creditworthy. There are a lot of aspects that come together to make a 3 digit credit score. Credit score can range between 300-900. It’s like a report card of your financial status. If a loan borrower credit score is more than 750, it is considered a good credit score and you can get any personal score easily. If your credit score is between 500-750 then it is considered an average score and if it’s below 500, the credit score considered bad. It can be difficult to get a personal loan from any financial institute with a bad credit score.
Getting a personal loan with a good credit score is like the cherry on the cake but still, you can get a personal loan with a bad credit score with high-interest rates.
Here how you can get a personal loan with a bad credit score in Singapore
1. Prove that you can afford the loan EMI’s:
Before lending any personal loan to a borrower, financial institutes/ banks check credit score. Right after the credit score, individual monthly income is considered. By providing proof that you are capable enough to pay the loan monthly EMI is one of the easiest ways to get a personal loan with a bad credit score. If you can convince the lender to lend you a personal loan, the chances of loan approval are higher.
2. Apply for a loan with a secure guarantor:
Another easiest way to get a personal loan with bad credit in Singapore is with help of a co-signer or a security guarantor. A co-signer or secure guarantor can be anyone- your parents, sibling, friend or any other relative. If you applying for a personal loan with a co-signor than the lender will look after the co-signor credit score, thus it increases your chance of loan approval.
3. Pledge collateral
Pledge Collateral is a security giving to the bank in the form of some asset whose market value is higher or equals to the loan amount. If someday the borrower fails to pay EMI, the lender by default will release the asset in the market and receive back his loam amount.
4. Go for lower loan Amount
If you somehow have a bad credit score, then first go for the lower personal loan amount. The chance of getting a lower loan amount with a bad credit score is higher. If you succeed in paying off the loan amount, it will increase the trust of the lender in you and maybe later you can get more personal loan easily.
5. Correct the mistakes and increase your credit score
A lot of times, people make a lot of mistakes and errors within their bank account by not keeping their bank transaction in sync. This later leads to a bad credit score and affects credit possibilities. So make sure you check your credit score at least one or two times in a year and remove any error or mistake that your credit report may have.
The above-mentioned tips can help you to get a personal loan easily even with a bad credit score. However, we would recommend you to improve your credit score and then apply for a personal loan.