There may be a point in your life where ‘savings for a rainy day’ might not be enough to tide you through a tough financial situation. Be it to pay for an unforeseen medical bill, or urgent home renovation, considering an urgent loan could be a solution to your problems. But what if I am currently unemployed? Can I still apply for an urgent loan for unemployed in Singapore?

Why unemployment can negatively affect your loan application

Contrary to popular belief, you can still successfully obtain an urgent loan even though you are unemployed. To apply for any type of loan, you must first find out if you are eligible for it. Loan eligibility requirements include minimum salary, proof of employment etc. Most banks and financial institutions require loan applicants to be gainfully employed and show proof of income when applying for a loan. This enables lenders to assess your loan repayment capabilities.

However, for those who need an urgent loan for unemployed in Singapore, this may prove to be a challenge. But don’t be discouraged, as you can still get your loan application approved. Here are five essential tips for the unemployed to be successful in getting an urgent loan:

5 Essential tips to get a successful urgent loan for unemployed

1. Maintain good credit history

Your credit score determines how financial institutions such as banks and licensed money lenders in Singapore view you as a borrower. A good credit score indicates that you have been diligently paying off your credit card debts or other loans on time, and the chances of your loans getting approved is higher. In Singapore, your credit payment history is recorded by the Credit Bureau Singapore (CBS), where you can check your credit history with banks in Singapore.

If you’re looking to apply for a loan with a licensed money lender, they will check your details such as your existing outstanding loan principal amount with other moneylenders, total payable amount, repayment records and borrower’s current borrowing limits with the Money Lenders Credit Bureau (MLCB).

While money lenders don’t usually consider your credit score with CBS, a good credit score can most definitely help you get your loan application approved, especially if you are unemployed. So ensure that you maintain a good credit history by making timely payments and don’t default on your loans.

2. Get alternative sources of incomes

The good news is you don’t have to be employed full-time to successfully apply for a personal loan. Alternative sources of incomes i.e. part-time jobs, freelance, contract jobs, and passive incomes from rental payments or investments are considered as “proof of income”. As long as there’s funds coming in and you’re able to prove to the lenders that you can effectively pay off your loans, you can apply for an urgent loan for unemployed in Singapore.

3. Consider taking up secured loans

A secured loan is a type of loan that is backed by your assets such as car, property, or jewellery as collateral to the lender in case you are unable to repay your loans. In the event you can’t pay off your loans, the lender has the right to sell the asset you pledged to pay them off. This provides more security for lenders, lowers the risk of not getting their money back and in turn grants you a higher probability of getting a loan, even if you are unemployed.

4. Negotiate and commit to a repayment schedule you can adhere to

To effectively pay off your loans, you will need to first ensure you can afford the repayments. While it is tempting, don’t borrow more than what you need. The more money you borrow, the more you’ll have to pay back.

Lay out your monthly finances e.g., bills, mortgages, groceries. Then, add the potential loan installments you must pay into the above expenses and see if you can afford to pay them all in a timely manner. Note that if you’re late in repaying your loans, you will incur late payment interest of maximum 4% per month for each month the loan is repaid late.

Hence, don’t commit to a repayment schedule and frequency you’re not confident of adhering to. Inability to pay off your loans on time can also negatively affect your credit history.

5. Choose interest rates with your financial situation in mind

Interest rates are probably one of the first things borrowers consider when applying for a loan. Depending on your current financial situation, sometimes lower interest rates might not be the best option for you as it might come with a shorter repayment period. This means you need to pay higher monthly installments, which can be a challenge if you are unemployed or don’t have a regular stream of income.

Many licensed moneylenders in Singapore offer affordable and flexible repayment on a case-by-case basis. Do your research before committing to a lender. Find one that can provide what you need – good interest rates, a flexible repayment schedule, and reasonable repayment conditions you can work with even if you’re unemployed.

Also, consider other loan information such as processing and late payment fees, should you not be able to pay off your loan on time.

Apply for an urgent loan for unemployed now

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Got your loan approved? Well, congratulations!

Now that the funds are in to help you with your expenses, here’s where the hard part comes in – remember, every loan is a responsibility.

Failing to repay your loan on time or not budgeting enough money to repay your term loan regularly can cause debt to accumulate, especially since you will need to pay additional late interests and changes!

So how can you manage your finances realistically so you can pay off your loan on time fuss-free? Here are 4 simple tips you can use.

Do your budgeting and financial planning

If you’ve been feeling anxious about your financial situation as of late, financial planning might feel overly complicated and daunting. Many of us have been through that, and we understand.

If you do it one step at a time, it is actually pretty simple!

Start by finding out the outstanding loan amount for all your existing loans (check your latest repayment receipts or call your lender to check). Next, total up your loan repayment amount every month.

You can then start budgeting every month around this repayment, and align it with your monthly payday dates. If you’re struggling with this, consider trying the 50/30/20 budget rule – which suggests spending 50% of your take-home pay on essential expenses, 30% on other things you might want, and the remaining 20% on savings and debt repayments.

If the 20% of your take-home pay isn’t enough to help you manage your monthly term loan repayments, you may need to reduce the amount you spend on non-essential items, so you are able to repay your loan and have enough savings. If you find yourself ending up using all your take-home salary for loan repayment and expenses with barely any savings left, you may need to reduce your expenses and stick to a tight budget.

If you need any budgeting advice, reach out to us here and our experts will be more than happy to help!

Automate your debt and bill payments

Have you ever found yourself forgetting and missing bill repayment deadlines (as well as repayment dates for loans)? While it might have simply slipped your mind, it’s a very expensive mistake that might come with late charges and a black mark on your credit record, even if you’ve only taken cheap short term loans.

Why not simply automate your monthly bill repayments? You can set up GIRO payment options or scheduled card deductions from your bank account.

The best part? You can time this automated deduction according to when your salary comes in every month, so you can ensure you have sufficient funds in your account for the transaction to go through.

Top up or round up your term loan repayments

Have a little extra money on hand for the money from performance bonuses or freelance gigs?

Before you start thinking about splurging to reward yourself, if you are currently repaying off loans, consider using the extra cash to top up your loan installment repayment. This will help you clear off your debt more quickly, especially if you have short term loans which may have higher interest rates.

Not sure what extra amount to start with? Consider rounding up your installments instead of the stipulated amount of payment you are supposed to make.

For instance, if you need to pay $276.50 monthly, you can round it up to $300 and pay $300 instead, if you have the extra cash. Over time, you will end up reducing the period you need to otherwise take to repay your loan, which can leave you with a shining credit report and reduced stress from loan repayments!

With that said, keep in mind, however, that some lenders might penalise you for early repayment. Sometimes, lenders do this in order to make sure that they’re still earning a stipulated amount of money from the interest of your loan, in exchange for their service. So be sure to read all the fine print before you pay off your loan too early!

Make use of the option to refinance your term loan (if any)

Refinancing is when you revise the terms of your existing loan, whether with the same lender or with a different one entirely. Most of the time, this is done when the prevailing interest rates fall, and borrowers request to refinance in order to get better interest rates than the existing interest rate you currently have to pay for your loan.

The lender would then re-evaluate the borrower’s credit history and repayment status, before adjusting the loan terms such as interest rates or payment schedules. Doing so can help you save money.

If you’re juggling many lines of credit, repayment terms and deadlines, you can consider taking a debt consolidation loan, which helps you merge all your loan obligations into a single loan, so it is easier for you to manage your financial responsibilities.

If you’re looking to refinance your term loan, always make sure to read the fine print of your current loan before taking any action.

How can you get the best term loans?

With a simple plan and a little bit of discipline, managing a short term loan in Singapore can actually be simple.

If you are unsure of how to start, we are here to help. At LoanHere, we’re passionate about improving your quality of life by constructing a feasible financial plan for you.

We will also help you get the best long term personal loans and the cheapest short term loans by helping you compare loan quotes between the top licensed money lenders in Singapore. Get a loan quote with us now.

If you’re planning to take out a personal loan, then you should know that it comes with the obligation of repaying the fixed amount of monthly instalments over an agreed period of time. As a matter of fact, ensuring that you pay your loans on time has its benefits such as improving your credit score and hindering you from paying the interests that may incur from late repayments.

That is why, whether you’re planning to apply for a personal loan in Singapore from banks or licensed moneylenders, you must not only ensure you have the resources to pay your repayments on time but to do your best to stay ahead of your repayment dates too. Don’t worry, there are tips for you to practice to help you pay your loans on time.

#1 Create A Budget

Right off the bat, you need to create a realistic budget tailored to your spending habits and financial status. In doing so, you’ll find that you will always have the money to repay your personal loans as well as ensuring that you don’t end up accidentally spending the money meant to pay your loans on something else.

But, before you do, you need to understand the dynamics of your loan and how much you’re saving monthly. In fact, by tracking your daily spending, it’ll be easier for you to differentiate your wants from needs, and thereby, determine which things for you to stop spending on. By creating a division of essential and less important things to elucidate your spending habit, you’ll find it even more possible to refrain from spending your money on non-essential items.

If you’re worried that you might have a hard time keeping track of your expenses, there are apps available on your smartphone that will help you create an efficient budget plan. Here’s another bonus point: these apps can also help keep track of your spending habits, cap your daily spending, and set budgeting goals.

#2 Opt For Loan Restructuring

Understandably, you may think that lower equated monthly installments (EMIs), which is essentially a fixed amount of money you’ve to repay banks or licensed moneylenders to pay off your loan, with higher tenure is the best option for better liquidity management. But, here’s the thing, higher EMIs to repay your personal loans from banks or licensed moneylenders translates to lower tenure. This means that you can easily repay the loan either on or before time with far fewer interests.

If this option piques your interest, then you need to evaluate and analyse which aspect is more accommodating to your situation: either obtaining liquidity by opting for lower EMIs; or save on interests by opting for higher EMIs.

#3 Identify and Prioritise Your Repayment Loans

Now that you have a clearer idea of your spending habits and set a budget in mind, it’s time to prioritise your personal loans, especially if you’ve several loans to pay off. The first step is to identify the costliest loans, interest rates, and their repayment date. In doing so, you’ll be able to monitor your repayment schedules and the amount without fearing that you’ll miss paying your dues.

It’s also prudent for you to allocate your funds primarily towards repaying loans with higher interest rates, whilst maintaining the regular payments of loans with lower interest rates. That way, you’ll minimise the total amount of interest that you’ll be required to pay and gradually eliminate higher interest amounts first.

#4 Consider Consolidating Your Loans

If you’ve several personal loans under your belt, then it’d be wise to consolidate your loans as having several loans will make your interest rates pile up and increase in the amount in the long run. But, by consolidating your loans, be it from banks or licensed moneylenders, in a single account, your repayment terms will be more streamlined, and as such, makes it that much easier for you to repay your loans.

Additionally, it’ll be even more effective if you consolidate your personal loans into secured loans. This is because secured loans are known to have longer repayment terms with low interest rests as well as high borrowing limits. In turn, you can consolidate all of your personal loans while having a longer repayment term, which helps save up money.

#5 Make Lifestyle Changes

One of the simplest means to pay off your personal loans in Singapore is by making lifestyle changes. For instance, by cutting out unnecessary spending, you’ll have more room to increase your savings as well as funds meant for your personal loan repayments.

While we understand that adopting this habit can be a little challenging in the beginning. But, once you get the hang of it, you’ll find yourself steadily generating savings and paying off your personal loans from banks or licensed moneylenders steadily.

In fact, you can start slow by shopping at places that can accommodate your budget, choosing a credit card provider with the best rebate plan, and cutting down on entertainment expenses. Assuming that you finally have more control over your finances, you may also be able to consider increasing your monthly repayment amount to help shorten your loan tenure.

It’s natural for borrowers to have the desire to repay their personal loans quickly, whilst improving or maintaining their commendable credit scores. The bottom line is this: the key to paying off your personal loan on time is discipline and proper financial management.