How does bank loan application actually work?

[Lestat]

I think that is an excellent suggestion. Look up your own credit bureau records first.

Some banks have as much as 16 criteria.

Generally they relate to:

(1) your ability to repay - there is no point in giving you money when they are running a business

(2) your exposure to current & other banks and your repayment records

(3) the stability of your income

(4) your employment history

(5) the number of your dependents

The type of loans you are applying for is also important.

In my opinion, I would suggest that if you do not need the loan for medical or humanitarian (eg helping a family member) reasons, do not take it.

Thanks for your reply.

For 1. I think that's up to the bank's individual assesment, isn't it?

For 2. I have no exposure to any bank loans and credit cards at all... :(

For 3. My income is pretty stable, as I am not the commissioned based type.

For 4. I have been working for quite some time, in this current company for 2 years already.

For 5. I am single

I am not applying a loan for medical or help. It's for my education. And no, cannot take education loan, coz the institute is not recognized by MOE yet.

 

[Zombie]

It's for my education. And no, cannot take education loan, coz the institute is not recognized by MOE yet.

I think max unsecured personal loan allowed is 2 x your monthly pay.

 

[Ramseth]

Bank loans? LOL! I've heard one maxim. The bank will lend you as much money as you want as long as you can prove that you don't so much.

 

[Lestat]

I think max unsecured personal loan allowed is 2 x your monthly pay.

Some banks allow up to 4x your monthly salary. The crux is that I am only short for, and not needing a big loan to cover the whole course fees. Of course, I do have my own savings, and that I'm only needing some to "top" up the fees.

And yes, I will still be working full time. Cannot stop working, can I?

 

[Lestat]

Bank loans? LOL! I've heard one maxim. The bank will lend you as much money as you want as long as you can prove that you don't so much.

Haha! If that's the maxim which banks practice, I believe the recent financial meltdown will not have happened. :p

 

[kakowi]

(1) Some centres have tie-ups with banks to offer education loans...have you checked those already?

(2) Some of the banks here offer education loans

(3) Unsecured overdrafts/term loans carry a high interest rate, so you need to see if it is worth your while

(4) do you think you can postpone your studies by one year whilst you save up the money and pay in full? Or at least pay one semester in advance so that you will not need to take loans...you should consider this as you have a regular income...note also that you are spoilt for choice in the singapore market and you can certainly shop around....also you might like to compare with the malaysia market as foreign universities also have a presence there....then check out the differential in prices and see if you still need a loan

(5) is your degree recognized by the singapore government...that is one of the best ways to determine the value of your degree...no point paying $20,000 for a piece of paper that no one recognize

all the best

ps: loans is a four-letter word multiplied many times

hmmm....i just read your later posts that you do not need a large amount...in that case, calculate how long you need to repay and note that some banks offer 6 months free of interest and some credit cards offer up to 2 years interest free.....and see if these are useful to you...of course check your self-discipline quotient too

 

[Lestat]

(1) Some centres have tie-ups with banks to offer education loans...have you checked those already?

(2) Some of the banks here offer education loans

(3) Unsecured overdrafts/term loans carry a high interest rate, so you need to see if it is worth your while

(4) do you think you can postpone your studies by one year whilst you save up the money and pay in full? Or at least pay one semester in advance so that you will not need to take loans...you should consider this as you have a regular income...note also that you are spoilt for choice in the singapore market and you can certainly shop around....also you might like to compare with the malaysia market as foreign universities also have a presence there....then check out the differential in prices and see if you still need a loan

(5) is your degree recognized by the singapore government...that is one of the best ways to determine the value of your degree...no point paying $20,000 for a piece of paper that no one recognize

all the best

ps: loans is a four-letter word multiplied many times

hmmm....i just read your later posts that you do not need a large amount...in that case, calculate how long you need to repay and note that some banks offer 6 months free of interest and some credit cards offer up to 2 years interest free.....and see if these are useful to you...of course check your self-discipline quotient too

Thanks for your reply.

(1) Checked, they only give education loan to recognized education institutions. Mine does not fall into this category.

(2) Same as point 1

(3) I have worked out the interest rate as well as the repayment period and I am comfortable with the T&C.

(4) It's a multimedia course, it's still in an infancy stage, that's the reason why govt is not opening up fast enough. Even though the recent articles have indicated that the govt is going to open this area, it will still take 1 year or 2. In technology, one cannot wait. it's either you are in or you are out, if you are slow.

(5) It will not be recognized in SG govt yet, maybe in future, but definitely not now. However, it's recognized in the States and Europe, so this will definitely be an added advantage if I move over there to develop this line.

 

[High till Dry]

I have no unsecured lines like credit cards and credit lines. I do not currently own any credit cards at all, as I feel that they are not that useful for me currently.

And yes, it's unsecured term loan. That's what is being advertised in certain banks.

just calcualte the interest and principle that u have to pay. if u meet the minimum income think shouldn't be a problem with good credit standing

 

[Lestat]

just calcualte the interest and principle that u have to pay. if u meet the minimum income think shouldn't be a problem with good credit standing

Well, the thing here is, everything I meet but still unable to get approval. I also dunno why.

One more thing, I think they may have to look at my 12 mths cycle of previous records. Is this true?

 

[High till Dry]

Well, the thing here is, everything I meet but still unable to get approval. I also dunno why.

One more thing, I think they may have to look at my 12 mths cycle of previous records. Is this true?

u said ur record is clean therefore no history. under cbs it's graded as GX which is ok. how much did u apply for? sometimes different banks varies in their criteria. finance company like GE money may be more lenient.

 

[JWNY]

OCBC education bank loan is best...check it up, i have dropped a very good hint

S$30 000 annual pay would be a good start. GE money is designed more for those earning below that bracket...

If that institution is not endorsed by MOE, are you for certain that is the right choice?

JWNY

 

[madix]

Credit Bureau is a shared agency amongst all financial institutions.

If you lag in payments, from credit card to housing loan bills, your big name will be reflected in the system.

If you late payment, it will be reflected.
It is machiam a report card of your loan behaviour.

To approve a loan, bank takes a look at your repayment behaviour, bankruptcy history, current job salary, whether commissioned or fixed pay, loan size, total debt in financial institutions etc.. before giving out a loan.

No hard and fast rule.

HOPE this helps

 

[madix]

for a start, banks are more stringent on loans.
Overseas institutions are most likely rejected.
Local ones, mainly govt ones are allowed.

SO there....it is not comprehensive but this is wat banks are willing to offer only.