Personal loans help you amass funds that you would need to pay for pressing expenses. However, if you have a poor credit score, you are likely to find it very difficult to get a personal loan approved. Your credit score is the most significant financial tool to get the best personal loan. If you are looking for a personal loan by taking on a trial-and-error method, it will be destructive and fruitless. You need to consider factors that are likely to impact your credit score and the chances of getting a personal loan.
Here are the five tips to find a personal loan without hurting your credit score:
1. Pay your dues on time
– Paying your dues on time will have a positive influence on your credit score. But what if you failed to pay your credit card bills and other dues on time? Payments within 30 days past the due date is usually accepted. Doing so, you can choose a personal loan you like, without worrying about getting rejected
2. Avoid applying for personal loans from different lenders
– Applying for multiple personal loans at the same time indicates your lack of confidence in obtaining a loan and will reflect badly on your credit rating. Personal Loan Eligibility Calculator can help you check the prospective rate of interest and eligibility before having a loan.
3. Get a loan quote
– If you apply for a personal loan formally, the lender will carry out a credit check. It will leave a negative score on your rating. If this takes place often, your score will go down drastically. Therefore, before you formally apply for a loan, you need to find out if you are eligible by talking to the moneylender in person and going through the eligibility criteria.
4. Compare the fees charged
– Many banks offer low-interest rates but charge substantial supplementary fees. These charges are burdensome and may lead you to miss a monthly installment damaging your credit rating. Compare the fees imposed by different lenders on personal loans before applying.
5. Consider NBFI
– Consider non-banking financial institutions (NBFI); these institutions are listed with Monetary Authority of Singapore and offer a wide range of loans. These institutions also depend on your credit score and history to evaluate your risk as a debtor. They have different packages for different risk appetites.