8 things approved lenders consider before approving your loan ► FINCHANNEL

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The cost of living in Singapore is higher than in neighboring countries, which is why you may feel the need to take out a loan to pay for your daily living expenses. But depending on the complexity of your financial situation, getting a loan can be a tedious or quick process.

When you are considering getting a loan for the first time, you may not be aware of all the aspects that a loan provider researches about your situation before approving it. Hence, be sure to find the ideal lender for your needs who offers affordable interest rates.

Although Singapore strictly regulates pawn shops in the country, you could still end up borrowing from an illegal lender if you don’t do your due diligence. So check the business registration on the Department of Justice website before signing any documents for a loan.

Suppose you need a loan to get you out of a tough situation. It would be best if you prepared in advance to make sure it gets approved as quickly as possible. Once you have covered the following aspects, head to a Singapore authorized money lender.

Documentation availability

Before considering anything else, you should make sure that you have the full documentation required by most, if not all, licensed pawn shops in Singapore.

The documents you should have with you when looking to apply for a loan are:

  • Identity card / NRIC

  • Proof of residency (can be a utility bill, rental agreement, etc.)

  • Proof of employment (payslip, letter of appointment, etc.)

Whether you are a local or a foreigner applying for a loan, you might also need additional documents like a work permit or visa, passport, proof of income, etc.

Your income and your job

Loan providers want to make sure that they are receiving their money with interest. To make sure this will happen, they need to confirm your employment status. No one would want to give money to an individual who cannot pay it back. So, you need to make sure that the details of your income and employment history are ready to be presented to the lender.

Depending on your income and years of employment, a lender may offer you different amounts for loan purposes. They may also be willing to negotiate a flexible payment plan that gives you more freedom while sticking to a specific schedule.

Credit score

Every approved Singapore pawnbroker is sure to watch your credit score when considering your loan application. Having a good credit rating means that you have paid off EMIs or loans taken out in the past.

If this is your first time taking out a loan and you’ve never had a credit card in your name before, your clean slate can also prompt a lender to give you a loan. Make sure you are aware of your credit score, and if it is too low you should be prepared to explain why it is so.

Financial history

While not all pawn shops in Singapore take a close look at your past finances, some will, especially if you’ve applied for a large loan. Past finances would also include financial details of any dependent families you have.

If you have an impeccable financial history, there is nothing to worry about. However, if you have declared bankruptcybefore or something similar, it’s best to be upfront about this with your lender during the early stages of your loan approval.

Deposit details

While your loan is in the process of being approved, your lender might want to sit down with you and determine the appropriate down payment you should make on your loan.

The down payments may differ depending on your financial situation and other aspects, and you can negotiate this with your lender depending on the urgency of your need for the loan. Make sure the down payment is mentioned on the final loan document which you will also sign.

Any guarantee you have

You don’t necessarily need to have collateral for your loan. In Singapore, depending on the type of loan you are applying for, collateral requirements may vary. However, if you are asking for a large amount or for a mortgage, you may need collateral to secure your loan.

In order for collateral to be included in your loan approval documents, you must have full documentation that shows you own it.


Whether you have liquidated assets or other types of assets, they can be essential in helping you get your loan approved. If your lender seems reluctant to give you a loan, it’s ideal to be upfront about your asset details.

The assets can also be used as collateral, depending on the type of loan you are applying for. Not all assets can be considered collateral, and you will need to research in your area to find out.

term of the loan

The Singapore approved money lender will have a contract that mentions when he expects the full loan amount including interest repayment. They may offer several options for paying off your loan, including regular payments or periodic payments (quarterly, annually, etc.).

You can also check the Credit Association of Singapore website if you have any questions about how pawn shops operate in the country. Be aware that you will only be eligible for a limited loan based on your income and other factors.

When you know what to prepare before you go to get a loan from a lender in Singapore, your loan can be approved within days.