A personal loan has many different benefits that are why people who are short with funds opt to apply for a personal loan instead to acquire the money they need. Applying for a personal loan from Smart Loan has been the most straightforward solutions of people today when they have financial problems.
However, if you have a bad credit history, it would be hard for you to get the personal loan you needed. A credit history is checked by the lenders when you apply for any loan, and that includes the personal loan.
Several factors would affect a person’s credit history. Thus you have to make sure that you know these factors and so you can avoid any reasons that would adhere to your future personal loan application.
5 Ways to Avoid a Bad Credit History
Here are simple yet effective ways on how you can avoid having a bad credit history and have an easier personal loan application when you need it:
● Pay your dues on time
It is pretty normal for borrowers to have a delayed monthly repayment but even if you aren’t able to pay your loan repayment on time, make sure that you can pay it before its due date.
Not repaying your loan before its due date will be reflected on your credit history and once your lender can see this, it would eventually affect your loan application approval.
● Avoid applying for personal loan in several lenders
There are times when we are really in need of cash that is why we apply for personal loan in multiple licensed moneylenders. This method may seem easier for you to get loan approval, but it is not.
Loan application in several lenders will also be reflected in your credit history and doing so will only give the lenders an idea that you are not that confident when applying for a loan from them hence it is much wiser if you’ll wait for your loan application result before jumping in a new loan.
● Get a loan quotation from the lender
Before applying for a loan, you should check first whether you are eligible for the loan you are applying for like the personal loan. You may talk to the licensed moneylender first to check your eligibility because being rejected from a loan will give a negative score on your credit history.
● Compare offers and fees
When applying for any loan, make sure that you have to ask offers and loan cost breakdown to licensed moneylenders in the area; this way, you can check which one has the best offer.
One of the factors you should consider when choosing a moneylender is their prepayment penalties and interest rates which are the common reasons why borrowers have a hard time paying off their monthly repayments.
● Ask help from non-banking institutions
Aside from the banks and licensed moneylenders in Singapore, there are also some other financial institutions where you can borrow money. Having a wide range of choices is excellent so it would be easier for you to compare each of them and determine which one is the better option and avoid having further financial stress or outstanding loans that could affect the borrower’s credit history.