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6 Simple Things M’sians Can Do To Increase Their Chances Of Getting A Personal Loan

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Source: WOB

Contrary to popular belief, personal loans are not solely meant for large purchases like cars and property. In fact, personal loans can be helpful when one wishes to:

  • Consolidate debts with a lower interest rate
  • Fund major life events such as house moving)
  • Improve credit score (provided that debts are paid on time)
  • Cover an emergency or unexpected expense (e.g. medical, home or vehicle repair)

However, loan rejections are common, especially when it comes to poor credit scores, unstable incomes, and several pending loans. Wanna improve your odds of getting personal loans? Check out the tips below!

 

1. Maintain your FOIR below 30% 

FOIR, short for fixed-obligation-to-income ratio, is a metric used to evaluate an individual’s loan eligibility. It shows an individual’s disposable income available for existing or new debts, and can be calculated using this formula:

FOIR = total debt ÷ monthly salary 

The higher the ratio, the more income is spent on debts, and consequently, the less likely it is to obtain new loans. Therefore, a general guideline is to keep your FOIR below 30%, as many banks or service providers tend to reject loan applications from borrowers whose FOIRs are always high.

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2. Opt for a longer loan tenure to reduce FOIR

Opting for a longer loan tenure also means that you have less amount of debt to pay off monthly, which can lower your FOIR. This method can be helpful for those who want to apply for multiple loans simultaneously or consecutively.

However, it is advisable to think twice before applying for several loans at the same time, as some banks or service providers may perceive the high number of loans as the inability to manage your finances properly.

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3. Maintain a credit score above 750

Your credit score indicates your ability to repay loans, and hence, the higher the credit score, the easier it is to get a loan. A credit score above 750 is considered good and would be helpful in getting your loans approved easily. (You can check your credit score online via CTOS or CCRIS!)

If your credit score does not meet the minimum requirement of a loan, it is better to put your loan application on hold until the score is improved. Here are some effective ways you can boost your credit score:

  • Repay your debts on time
  • Consolidate your debts
  • Pay off all existing debts
  • Use less than 30% of your credit limit

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4. Ensure a 6-month gap between loan applications

Many borrowers tend to make multiple loan applications from different service providers, hoping to increase their chances of getting at least one of the loans. Unfortunately, doing so will only lower their credit scoresThis is because, for every loan application, service providers will run a hard inquiry on applicants’ credit reports to evaluate their loan eligibility.

Although new loan applications merely take up 10% of your credit score, frequent hard inquiries in a short period of time can significantly lower your credit score. Hence, a rule of thumb is to ensure that there’s at least a 6-month gap between loan applications.

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5. Provide details of all income sources 

During loan applications, it is important to provide enough evidence to show that you’re capable of repaying the loan. Instead of solely providing your main income details, it is best to furnish your application with the details of all your side incomes, such as part-time jobs and rents.

Other than increasing your chances of getting the loan, this information can also help you get a higher loan amount!

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6. Find co-applicants with high income or credit score

If your credit profile is unsatisfactory, it would be helpful to bring in a co-applicant while applying for a personal loan. The co-borrower can be your spouse, parent, or sibling, who has a high credit score or income. This adds to your repayment capabilities, which increases your chance of getting the loan.

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However, do note that bringing in a co-borrower complicates the application process, which might slow down your loan approval. If you need disbursement as soon as possible, be sure to opt for service providers that offer fast and high application approvals. One such service provider you can check out is AEON Credit.

From now until 31st December, AEON Credit Personal Financing – Fast & Instant Financial Scheme lets you loan up to RM5,000 with monthly instalments from as low as RM57! *Terms and conditions apply

This personal financing is open to all Malaysians aged 18 to 65 years old, who have a minimum gross salary of RM1,500. It offers a loan amount ranging from RM1,000 to RM5,000 with a financing tenure of 6 to 60 months

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No co-applicants required, you can enjoy fuss-free loan approval and instant disbursement! Here’s how you can apply for AEON Credit Personal Financing: 

  1. Prepare the relevant documents based on your employment status and income.
  2. Submit your online application here.
  3. During submission, key in the promo code “FASTPF01”.
  4. Upon successful application, the desired financing amount will be disbursed to your AEON Member Plus Visa Card. 

Easy peasy! Not an AEON Member Plus Visa Cardholder? Don’t worry, you can apply for the card at any AEON Credit branch or online via the AEON Wallet App. 

For more information regarding AEON Credit Personal Financing, visit their official website. Don’t forget to follow AEON Credit on Facebook! *Terms and conditions apply

 



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