5 tips for successful personal loans approval

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There’s no universal formula for successful personal loans approval

By: Hitesh Khan/

Requirements for successful personal loans approval, such as credit score and minimum income requirement, vary by lender, and some non-traditional lenders consider data like free cash flow or education level.

There’s no universal formula for successful personal loans approval. Requirements such as credit score and minimum income requirement vary by lender, and some non-traditional lenders consider data like free cash flow or education level.

By: Hitesh Khan/

But all financial institutions which give out personal loans have one thing in common – they want to get paid back on time – and this will determine successful personal loans approval.

This means they approve only borrowers who meet their requirements. Here are five tips to boost your chances of qualifying for personal loans.

1. Clean up your credit for successful personal loans approval

Credit scores are major considerations on personal loan applications. The higher your score, the better your approval chances. A credit score is a number that the lenders consider before they determine if they should approve your application for loans in Singapore.

It is a joint effort between all the major lenders here, where data about consumers’ credit history is pooled together and aggregated. Within the aggregated data, lenders would have access to records that show the number of accounts that you have across different banks, and your payment history.

After crunching the available data, each account holder is then assigned a credit score. This indicates how good or bad of a risk you might be to the lender as a customer. The higher the number (up to 2,000 and AA rating), the better your credit score.

Although the the exact weightage of how your credit score is calculated isn’t public knowledge, the factors that the Credit Bureau of Singapore (CBS) uses in determining your credit score is.

Factors like usage patterns of loan facility (e.g. if you have been making large purchases or transactions lately); your recent credit account activity (The number of credit facilities an account holder has is considered by banks as liabilities as they may perceive that you are over-extending yourself); and your account delinquency data, or how you have fared as a customer (this means where possible, always avoid making late or partial payments for your facilities).

Other factors considered by CBS include your credit account history, or how long you have been a customer (factors like if you have you been a loyal customer of your bank since you received your first credit card from them); how much available credit do you have (your credit score is affected by the number of accounts you have with various banks in Singapore); and enquiry activity of how many organisations have asked about you (having too many enquiries might indicate to banks that you could be taking on more debt than you should).

successful personal loans approval
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2. Rebalance your debts and income for successful personal loans approval

Applications for personal loans usually ask for your annual income. This means you can include money earned from part-time or freelance work. So if your income is not up to the mark of the lender, you should think how to supplement your income or to get a raise in your current job.

What’s equally important for successful personal loans approval is for you to pay down your debts as well.

Boosting your income and lowering your debt improves your debt-to-income ratio, which is the percentage of your monthly debt payments divided by monthly income. A lower debt-to-income ratio shows your lender that your current debt is under control and you can take on more.

3. Be careful of how much you ask for 

Most lenders will usually have a maximum amount an applicant with a certain income level can apply for, but requesting more money than you need to reach your financial goal can be seen as risky by lenders. Also, be mindful that a larger personal loan squeezes your budget, as higher loan payments impact your ability to meet other financial obligations, such as education loans or mortgage payments.

4. Do you need a guarantor for successful personal loans approval?

A guarantor or co-signer to personal loans is a third party in the loan contract. In the event of a default by the borrower the co-signer is legally obliged to repay the loan. So, if your credit scores are in the “fair” range, adding a guarantor with stronger credit and income can increase your chances of approval. But you should have an honest conversation with the prospective guarantor so they fully understand the risks before agreeing.

Best Personal Loans in Singapore (2018)

5. Find the right lender for successful personal loans approval

Most financial institutions and non-traditional lenders disclose their minimum requirements for lending. If you meet a lender’s minimum qualifications and want to see estimated rates and terms, you can pre-qualify for financing. But pre-qualification is not the same as putting in an application for personal loans. You may pre-qualify for a loan and yet your loan application may be rejected once you put in a formal application – and the more formal personal loan applications you put out, the more the impact is on your credit score.

This is one good reason why you need to work with trusted loan specialists like those at iCompareLoan. Our Loan specialists are able to not only pre-qualify you with multiple lenders and compare rates and terms, they are also able to get you the best personal loans which has costs and payments that fit into your budget.

How to Secure a Personal Loan Quickly

Do you want best personal loans but not sure if you qualify? Don’t worry because iCompareLoan loan specialists can set you up on a path that can get you a loan in a quick and seamless manner.

We also can arrange the Best Home Loans in Singapore as our brokers have close links with the best lenders in town and can help you compare Singapore home loans and settle for a package that best suits your home purchase needs.

Whether you are looking for a new home loan or to refinance, our mortgage brokers can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the loan. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us.

For advice on a new home loan  or Personal Finance advice.

If you want to speak to our Panel of Property agents or loan specialists.

If you need refinancing advice, we are here


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