Personal loans are very common type of loans in Singapore and people can go for it as they can get the amount easily and at a reasonable rate of interest. There are situations in which banks reject the loan applications. One of the major reasons is the bad credit score. There are many ways in which people can get loans for bad credit. Some of these ways are discussed here.
The loan amount should be small
If a borrower has bad credit score, none of the banks will give them a loan of large amount. In such a case, he can apply for a small amount of loans for bad credit. The borrower also needs to improve his credit score so that in future, he can apply for large amount of loan. This score can be improved by taking loans of small amounts and repay them on time.
Repayment of other debts
A person having bad credit score must have other outstanding debts. He needs to repay those debts in order to improve the credit score and get a large amount of personal loan. There are situations when people do not have enough funds to repay their existing loans. In such a case, they can contact the banks and ask them to restructure their loans. People can ask them to reduce the rate of interest or increase the time period. If they succeed in this negotiation, they can pay the loan as per the time extended in order to improve the credit score.
Debts can also be restructured with the help of bank transfer or debt consolidation plan. People need to contact with Credit Counselling Singapore and let them know about the problems that they are facing in dealing with the loans. The credit counseling will help the debtors in arranging the meeting with the banks and negotiate the interest rate or the increase of the repayment period. This will help in the recovering of credit score and people can use it to get personal loans of high amount.
Seeing financial institution other than bank
If people with bad credit are not getting loans through banks, they can look for other financial institutions. There are many financial institutions that have done their registration with Monetary Authority of Singapore. These institutions provide the loans as per the requirements of the borrowers. They also check the credit score of the borrowers before giving them loans. The credit score is checked as these institutions provide unsecured loans. One disadvantage is that these institutions provide loans at high rate of interest.
Get loans with licensed moneylenders
Another option that borrowers with bad credit score can use is the moneylenders, which should be licensed. The interest rate charged by these moneylenders is very high. This makes the repayment of loans very difficult. Another problem with these moneylenders is that their business is always at high risk so they provide loans of only small amounts. This helps them in collecting the amount easily. People need to understand the terms and conditions of these moneylenders before taking loans from them. They should also check about payment schedule. The business of other financial institutions is at high risk so they will provide the loan at high rate of interest. People can look for different types of loan packages provided by these companies and then choose the one, which fits their requirements.
Go for a secured loan
Applying for a loan if you have a bad credit can be a tough one especially if you go for an unsecured one. You may be qualified for some, but you’ll have a smaller loanable amount. Therefore, opting for a secured loan can be ideal. With a secured loan, you will need to pledge an asset as a collateral. In this way, you have chances of getting a much higher amount than with unsecured one. Take in mind that if you failed to repay your assets will be seized. This is why it is essential that you’ll need to start being a responsible borrower. After all, you are rebuilding your credit profile.
Find for Other Alternatives
People can find other alternatives to bank to provide personal loans. Personal loans can be used for various purposes and if they need the loan for a startup business, they can go for crowd funding, microloans, and peer to peer scheme.
These are some of the ways, which people with bad credit can use to get personal loans. You can go to other financial institutions where they can apply for the loans. You can also go to licensed moneylenders. They offer personal loans even you have a bad credit score. The advantage is that you can get an instant loan with them. Discover more on how you can avail instant personal loan offer here even if you have a bad credit score.