A period of unemployment can be a challenging time and surviving is difficult when you have no regular source of income. A personal loan can help enormously during a financial emergency, allowing you to get back on your feet.
Licensed moneylenders in Singapore offer greater flexibility than the big banks, so can carefully assess your personal circumstances to consider you for a loan.
What will a lender consider when applying for a personal loan?
When considering an application for a personal loan, responsible lenders will assess your sources of income and the level of your annual income.
They will check your debt-to-income ratio and determine if you can pay back the loan. They will also look into your other obligations such as bills and other credit commitments.
Lenders will check your credit score. Your credit rating can be hit hard by spells of unemployment, so avoid doing anything that can damage your credit score. This means trying not to overuse credit cards and not repeatedly applying for loans as this will impact your credit-worthiness.
Select a lender which best meets your needs
Not all moneylenders are alike. Different lenders have different credit rating requirements, different income requirements and varying credit limits.
Some lenders will only consider those with a high credit score while others will offer a loan even to those whose rating is poor.
Carefully research a panel of lenders before applying and seek recommendations from friends and family. Repeatedly applying to a random range of credit facilities will be perceived poorly by potential lenders.
You should approach a lender with confidence and honesty. Meeting a loan officer in person can be a chance to fully explain why you need the loan and how you intend to repay it.
Ways to increase your chances of loan acceptance when unemployed
A co-maker or guarantor loan is one where another person or party agrees to repay the loan should the principal fail to do so. This gives potential lenders much greater security when considering a credit application.
Alternatively, you could offer some form of collateral as security against loan repayments. This means you would need some form of an asset such as a vehicle, jewellery, stocks or even property to secure the loan. Consider such options with extreme care as a failure to repay or defaulting on the loan will mean you losing the collateral.
The bottom line
Being unemployed can be an extremely uncertain time. But it is important not to panic and carefully research and consider your next steps. There are options out there, so take the time to speak to a reputable and trustworthy moneylender for advice.