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What banks look for in loan applications

When applying for a loan, you will be served with loan application forms in which you will be required to provide your personal information. Banks look forward to making profits from the interest they charge on loans and for this reason; they aim at reducing the risk of bad loans as much as possible. Some of the most important information that banks look out for include:

Cash flow

This information should be clearly stated since it is the primary determinant of whether the loan application will be accepted or rejected. Besides the information you fill in the application forms, the bank will require you to provide supporting documents which could be the latest pay slips for salaried individuals and bank statements for people in business. In some cases, the net monthly income is used to determine the amount of monthly repayments and subsequently the maximum amount of credit that can be given to an individual.

Credit history

This is another common field that must be completed in loan application forms from all lending institutions. The information is backed up by bank statements which state the amounts of money that goes into loan repayments as well as loan statements which can be obtained by the client from the lending institutions. This will help determine the credit rating and repayment ability since too many loans for example might strain a person’s financial capacity. In the recent past, most countries have introduced a centralized system for banks that allows them to access their clients’ credit history from other institutions.

Available collaterals

Secured loans require collateral which has to be of the same or higher value to the amount being borrowed. This will be held by the bank until the loan has been fully repaid and is a way of minimizing the risks that the bank might incur should the loan become a bad debt. The lifespan of the collateral should exceed the loan repayment time limit so that it does not become obsolete before the loan has been fully recovered. The borrower will also be required to prove that he has full rights to the property ownership such that no other party will claim it. Where applicable, banks usually hold the original documents affiliated to the collateral until they have fully recovered their money.

Physical and work/business address

Lenders require this information so that they can physically track the client should they default. This is however not a strong security because people change their locations and jobs on a daily basis. It is usually supported by utility bills and letters from relevant authorities.

These are just a few of the important information collected from the client during loan applications. Banks are usually very keen on this and any slight discrepancy between what is presented in the application forms and the supporting documents guarantees a decline.


Licensed Moneylender in Singapore – Singa Credit Pte Ltd

Established in 1992 and previously known as Yong Seng Credit,
Singa Credit Pte Ltd is Licensed Moneylender in Singapore regularly updated with the latest regulations to be in line with the requirements set out by Registry of Moneylenders.

Please feel free to call 66946166 for more info on our lowest interest rate in Singapore or walk in our office 470 North Bridge Road #02-01 Bugis Cube Singapore 188735.

What we offer:
– Personal loan
– Foreigner loan
– 1 % loan
– Renovation loan