Simple Steps on Obtaining a Personal Loan

Do you need cash for a much-needed holiday?  Or funds to tie you over in emergency situations?  In life, there’ll be times when we find ourselves needing to apply for personal loans for various reasons – an intimidating proposition for those who have never done it before.  But whilst the process of obtaining a loan from bank might seem complicated, it is, in fact, surprisingly simple.  Here are a few easy steps to guide you through the process:

Making a Decision to Obtain a Personal Loan

Before you apply for your loan, you should probably assess your personal financial situation.  First, calculate exactly how much you need to borrow, then work out the total repayment amount by adding the principle loan amount to the interest.  When you’re done, divide the total repayment amount by the loan period to get an estimated monthly repayment amount.  And finally, compare this figure against your monthly income to see if you could afford to borrow the money for that amount, at such a rate and for that number of months.

Researching the Options

Once you’ve ascertained that you could afford the loan, conduct research on the various options that are available.  If you have a particular bank in mind, visit its website for details.  Alternatively, comparison websites are an easy option to finding a variety of lenders and all the details pertaining to the loans that they offer.  Sometimes, comparison websites even have reviews and tips for the different banks.

Getting the Required Documents Ready

Before you proceed to apply for a personal loan, make sure you have all the necessary documents ready.  If you are a salaried employee, the bank will usually require the following, along with the application form:

●     A copy of your government issued identity document or permanent resident documentation

●     A copy of your current payslip.  If you do not receive payslips, a copy of your bank statement indicating your salary deposit or Form BE indicating tax receipt of payment, or EA / EPF statement.

If you are self-employed, the bank will usually request the following documents, along with the application form:

●     A copy of your government issued identity document or permanent resident documentation

●     Copies of your business registration documents or certificates

●     A copy of your most recent Form BE indicating tax receipt of payment.

This is simply a list of the basic documentation that may be required.  The bank may require further documents from you prior to the approval of the loan.

Completing the Application

Now that you are ready to apply for your loan, proceed to visit a bank or undertake an online application if the bank offers such facilities.  Time for loan approval will vary from bank to bank and is dependent on a number of factors.  Generally, you’ll attain approval quicker if you already have an account with the bank and have a solid credit history.

Prior to the signing of the loan agreement, do read the terms and conditions to ascertain  the amount, the loan period, the monthly repayment amount, the agreed interest rate, and any other administration charges that may apply.  Also, you’ll want to take note of the monthly repayment date.   Throughout the entire loan period, you’ll need to make sure you have sufficient funds in your bank account on that date every month. 

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