Moneylender Loan Application Denied: What to Do Next
It can be frustrating to find out your moneylender loan application was denied. You are likely unaware of what to do next.
However, a denied loan application should not be the end. You can work things out and flip the situation with the proper knowledge.
Therefore, this post will guide you through what to do next.
What to do When Your Moneylender Loan Application is Denied
1. Find out Why the moneylender loan was denied
Don’t panic; loan rejections are possible and do not necessarily mean you are worth less. Singapore moneylenders usually adhere to certain conditions; sometimes, it is simply a matter of not meeting one or two.
Therefore, contact the moneylender and find out why you were denied the loan. Was it because of your credit report, or did you send in a few documents than required? Knowing why you were denied the loan is helpful because it gives you something to start with when trying to make things better the next time.
2. Check Your Financial Status
When you find out your loan application has been rejected, look closely at your finances. Find out if you could be heavily indebted. This is because lenders need to feel assured that you are in a good financial situation to repay the loan and not stretch yourself too thin financially when repaying the loan.
If your debt-to-income ratio is terrible, meaning you have a high amount of debt relative to your income, it’s a red flag for lenders. Pay off the loans first. Not only will you be healthier in the long term, but you’ll also be a better borrower in the future. Also, if you have an unpredictable income, think about how to make it more predictable, whether getting a second job or cutting wasteful spending.
3. Check Closely Your Credit Report
Your credit score is a significant factor in loan approvals. Moneylenders in Singapore usually scrutinize your credit history to gauge your creditworthiness as a borrower. If your credit score is low, it may raise a red flag for lenders.
Get a copy of your credit report from the Credit Bureau Singapore. Study the report to identify any issues, such as errors or inaccuracies affecting your score. If you find some problems, you can immediately dispute them with the Credit Bureau Singapore. They will investigate and correct any errors if found. Importantly, if the low score results from past financial mistakes, try to mend them through timely payment of bills and debts.
4. Find Alternative Loan Options
Just because one of the moneylenders rejected your loan does not mean that all will. Moneylenders offer different terms so that others may provide much more than them. Be courteous and show which Singapore-licensed moneylenders have services suitable for borrowers with the same financial record as yours.
You can also try searching for other sources of funds. For example, if you do not need much cash, a personal loan from a bank or credit union is another alternative. You can also consider peer-to-peer lending platforms or even borrowing from family or friends. Just ensure you know the terms and conditions well so you will not be caught off guard.
5. Reapply When You’re Ready
You can reapply once you’ve made whatever caused you to be rejected for your loan. Get everything in order, such as your ID, proof of income, and job details. Double-check all of these twice so your application is accurate and complete.
Importantly, do not hesitate to consult with the moneylender. Most moneylenders in Singapore would be more than happy to walk you through a proper application.
Final Thoughts
Loan rejection on an application never reflects your current worth or creditworthiness in the future. It’s just a speed bump. You should simply find out why you were denied, make some adjustments before reapplying or considering alternatives.
Notably, while it’s discouraging, it should be a learning and development experience that will enlighten you about your financial situation and how to improve it.
Lastly, don’t hesitate to consult a licensed money lender for assistance in improving your creditworthiness. They are there to support you and guide you through the process, so don’t be afraid to reach out for help.