In Singapore, getting a loan after bankruptcy can seem like a difficult task. But do not worry! Although it may be more difficult than usual, getting a loan is still possible.
This blog examines your possibilities, outlines the difficulties, and provides insightful advice to improve your chances of getting a loan approved.
Understanding Bankruptcy in Singapore
When someone is declared bankrupt, their assets are typically sold to pay off existing loans, and their ability to conduct financial transactions is restricted. The average duration of bankruptcy is three to five years, during which time an official assignee is responsible for managing the finances.
The bankrupt person is subject to a number of restrictions during the bankruptcy phase. These can include restrictions on opening a business, getting credit, and traveling without the OA’s consent.
The person is released from bankruptcy after the bankruptcy period is successfully completed and all obligations are fulfilled. This implies that they are free from the majority of their debts.
Rebuilding Creditworthiness
Bankruptcy recovery calls for dedication, self-control and a calculated approach. The first thing to do is to concentrate on restoring creditworthiness. This requires earning a consistent salary, paying payments on time, and maintaining little credit card debt. These responsible financial practices have the potential to raise credit scores and prove to lenders that a borrower is creditworthy over time.
Process of Rebuilding Creditworthiness
Get Your Credit Report: The Credit Bureau Singapore (CBS) is permitted to provide you with a free credit report each year. Check it over carefully for any mistakes, and report them as soon as possible.
Focus on Debt Repayment: As soon as feasible, settle any remaining debts that were not dismissed after bankruptcy. Rebuilding confidence with money lenders requires consistent on-time payments.
Manage Credit Utilization: This refers to the percentage of your credit limit you’re using. Aim to keep it below 30% for a positive credit score impact. Consider using a secured credit card with a low limit and pay the balance in full each month.
Become an Authorized User: If someone you know has a good credit history and trusts you, they can add you as an authorized user on their credit card. Their positive payment behavior gets reflected on your credit report, giving you a boost.
Maintain Timely Payments: Make all your bill payments on time. Even minor mistakes can negatively impact your credit score.
Help from a Credit Counseling Agency: These agencies offer personalized guidance on managing your finances and rebuilding credit.
Be Patient: Rebuilding credit takes time and consistent effort. Don’t get discouraged by slow progress.
Types of Loans Available After Bankruptcy
Even if it could be difficult to get a loan right away after filing for bankruptcy, there are still options available:
Secured Loans: Collateral, like a house or car, serves as the guarantee for secured loans. If there is an asset securing the loan, lenders could be more interested to grant credit because it lowers their risk.
Guarantor Loans: Take into account guarantor loans, which are loans that are guaranteed by a third party—typically a friend or family member. This gives the lender an extra degree of security.
Licensed Loan Providers: Look into alternative lenders and credit unions. When compared to traditional banks, these organizations might have more accommodating lending standards, which could mean that people with a bankruptcy record have more options.
Credit rebuilding Loans: For people with bad credit or a bankruptcy record, certain financial institutions provide credit rebuilding loans. Although these loans frequently have higher interest rates, they eventually can show trustworthiness.
How We Can Help You?
As a licensed moneylender in Singapore, we understand the financial difficulties individuals may face, especially after experiencing bankruptcy. We are committed to helping you in rebuilding your financial stability and regaining control of your finances. Here’s how we can help:
Understanding Your Situation: Understand your unique financial circumstances, including any challenges you may have faced due to bankruptcy. Our team listens to your concerns and works with you to find suitable solutions.
Flexible Loan Options: We offer a range of loans to meet the needs of individuals rebuilding their credit after bankruptcy. Whether you need a secured loan backed by collateral or a credit rebuilding loan with manageable repayment terms, we have options available to suit your requirements.
Transparent Terms and Conditions: We believe in transparency and clarity when it comes to loan agreements. Our team will explain all terms and conditions clearly, ensuring you fully understand the obligations and responsibilities associated with the loan.
Supportive Guidance: Our experienced professionals provide supportive guidance throughout the loan application process and beyond. We are here to answer your questions, address any concerns, and provide assistance whenever you need it.
Commitment to Responsible Lending: As a responsible moneylender, we adhere to the regulations set forth by the Ministry of Law in Singapore. We conduct thorough assessments to ensure that loans are provided responsibly and that borrowers can afford the repayments without undue financial strain.
Empowering Financial Education: We believe in empowering individuals with the knowledge and tools needed to make informed financial decisions. Through educational resources and personalized advice, we help you develop healthy financial habits and strategies for long-term financial success.
At Oasis Credit Pte Ltd, we are dedicated to helping individuals overcome financial challenges and achieve their goals, even after experiencing bankruptcy. Contact us today to learn more about our loan options and how we can assist you on your journey to financial recovery.