In times of financial crisis, a credit facility from a licensed money lender might likely the last resort, especially if one does not qualify for a loan from other financial institutions.
Notably, apart from the cost of borrowing in the form of interest and fees, the application process can be tricky, especially without an idea of what you will need. But the good news is that this process is relatively smooth with a licensed moneylender, provided you are well-prepared with the right documents.
Therefore, in this post, we’ll give you helpful information on the documents you must have when applying for a loan.
Documents You Need When Applying for a Loan from a Licensed Money lender
Licensed money lenders require certain documents to confirm your identity, income, and other important information.
Below is all you need to know about the documents you need when applying for a loan.
Proof of Identity
A licensed money lender will ask for identity proof to ensure they deal with the right individual. Some documents you can use to prove your identity include a passport, driver’s license, or even a national ID card.
Notably, if you are a foreigner working in Singapore, you must provide proof of immigrant status documentation alongside a valid work pass or an employment pass.
Income verification
The licensed money lenders must be sure that you can repay the loan. Thus, they will need to verify the applicant’s payslips. This is usually in the form of recent payslips and sometimes bank statements that indicate one’s regular flow of income.
Not everyone can produce payslips because they might be self-employed or freelance. Such people may use their tax return receipts or bank statements to show how much they have made as proof. These show how much they make and reassure the lender of their financial stability.
Confirmation of Residential Address
Also, the lenders will request confirmation of your residential address to ensure that it is possible to reach you when necessary.
They verify the residential address by requesting utility bills or tenancy agreements if one is renting. Also, recently produced bank statements containing an address. These documents must mostly be under three months old to offer current information.
Employment Details
Some lenders require assurance of the state of your employment besides authenticating your pay income via pay slips. These might request an official letter of employment stating clearly where you have been working and showing your salary.
At other times, the money lenders may request the employee’s employer information, including phone numbers and addresses, so they may contact them directly to ascertain facts about any particular employee. Although this may sound a bit intrusive, it is common in responsible lending.
Credit History
Sometimes, you must attach a credit report to your loan application. A credit report will let the lender evaluate the lending risk.
Notably, requesting a credit report before applying for loans is good to avoid delays in your application process.
Guarantor Documentation
When the amount lent is large, or the borrower has an average financial profile, the lender will likely request the borrower to have a guarantor.
The guarantor will be asked to provide documents such as proof of identity, income, and other personal information. This extra step creates a layer of security on the lender’s part and helps strengthen your application.
Conclusion
Having the proper documents ready makes all the difference during the application process. The whole process will be smooth and hassle-free.
Lastly, each licensed money lender is quite particular about the documentation they require. Therefore, it will save you time and frustration when you contact the moneylender to ask about the necessary documents and organize them in advance.