Every once in a while, we might need some financial assistance to help boost our cash flows. This may be due to unexpected emergencies, a need to purchase an asset, or looking to bootstrap your business capital.

However, what happens when you try to seek a personal loan with bad credit? In this article, we are going to see how one can get a personal loan with bad credit in Singapore. Some licensed money lenders like OT Credit can give you a credit loan with low interest.

Good and Bad Credit

First and foremost, what are good and bad credit? In a bid to reduce the financial risk of offering loans, financial institutions maintain a database of their clients’ loan activities. This credit information is synchronized in such a way to ease sharing of credit information between financing institutions.

This resulted in the creation of a credit score for each borrower. A credit score is a report with details of previous loans an individual has taken before from Financial Institutions.

This information helps inform lenders in Singapore about how you repay loans and the possibility and risk levels of default once a specific client applies for a credit loan. It also helps inform lending institutions on:

  • How much to offer you in credit.
  • Interest rates for the credit facility they will offer you.
  • Your ability to take on a credit facility at the moment.

In Singapore, Banks rely on the credit score availed to them by the Credit Bureau Singapore. For Licensed moneylenders, they rely on the credit score sourced from the Moneylenders Credit Bureau (MLCB)

A person is rated as having good or bad credit based on their Credit Score. A person with bad credit is viewed as riskier to offer loans to than one with good credit in the eyes of lenders. In Singapore, the following factors affect one’s credit score:

  • The number of recent loans: Having taken a high number of loans or credit facilities in recent times may affect negatively your credit score. This gives lenders an impression that you are hungry for credit.
  • The number of recent loan applications: The number of recent loan applications, to one or multiple lenders may be used to gauge if you are a responsible or a desperate credit user.
  • Current Credit to Income ratio: If the amount of credit you have compared to your income bracket seems high, it gives an impression that you have poor financial planning and spending habits. Eventually, you will reach a point where your credit outweighs your income.
  • Loan Repayment patterns: If you pay on time and do not miss payments, this improves your credit score. Late and defaulted repayments lead to poor credit scores.
  • How you spend your money: The way you spend your money, helps lenders determine your creditworthiness. If your spending habits indicate a change in spending habits or a sudden significant change in spending amounts, lenders tend to classify such a user as fickle.

Getting a personal loan with bad credit.

Now that we have seen what a credit score is all about. Let us see how one can get a personal loan with bad credit. With a bad credit score, it can be challenging to get credit from a lending institution. However, there are steps one can take to salvage the situation.

Source: www.business-standard.com

A personal loan is an unsecured credit facility, where no collateral is required. Therefore in case of a default, the lender does not have the right to repossess your assets. Due to this, if you are in Singapore, and have bad credit, it is advisable to try and find steps to improve your credit score before applying.

To do this it is important to know where you stand in terms of credit scoring to know how best to improve. It is advisable to first obtain your credit score report from the Moneylenders Credit Bureau (MLCB) while applying for a loan through a Licensed moneylender.

Do a General Inquiry on Interest rates for Credit Facilities.

Now that you are aware of your credit score, you can reach out to lending institutions and inquire about the interest rates you would get if you were to apply for credit. This is important as having a bad credit score may increase the interest rates on the credit facility you are to be offered.

This allows you to gauge what to expect. Remember, you are doing a general inquiry and not a loan application. As mentioned earlier, having too many loan applications within a short period will affect your credit score, and lenders will see you as desperate. This will affect your chances of getting a personal loan in Singapore.

Apply for Smaller Loan Amounts.

Applying for a smaller loan amount increases the chances of receiving it. The average Singaporean can theoretically borrow 18 times their monthly income from Licensed Money Lenders. However, this is not possible due to several reasons. If you have a bad credit score, you have a higher chance of getting your loan approved if you apply for a S$ 5,000 loan instead of a S$10,000 loan.

Once the personal loan is approved, ensure you make timely payments, as this will work to improve your credit score, and slowly you can increase your loan amount limits.

Apply with Licensed Money Lenders.

In an act of desperation, most Singaporeans with bad credit, tend to seek out the services of loan sharks and unlicensed money lenders for personal loans. This is mainly because it may be hard to get a personal loan from a bank. However, getting credit facilities from loan sharks and unlicensed Money Lenders is dangerous as they are not regulated. It is therefore advisable to apply for a personal loan through a Licensed Money Lender, such as OT Credit PTE Limited.

Most Licensed Money Lenders look beyond the credit score to determine the creditworthiness of a client and have internal systems to figure out your creditworthiness. This means that even with a bad credit score, you have a higher chance to qualify for a personal loan from a Licensed Money Lender than from a Bank.

Apart from this, Licensed Moneylenders charge less interest compared to loan sharks. The maximum interest rate for all Licensed Money Lenders is set at 4% per month in Singapore.

Once you qualify for a loan through a Licensed Money Lender, you have a chance to improve your credit rating by making your loan repayment promptly. The Licensed Money Lender will report this to the Moneylenders Credit Bureau (MLCB).  In the long run, this will go a long way to enhance your access to future loan facilities which is an advantage.


We have gone through how one can get a personal loan with a bad credit rating. With this in mind, once you qualify for a credit facility with bad credit, it is advisable to strive to make timely repayment, to improve your credit rating. This will allow you to get higher loan limits and higher chances of loan application acceptance. There are many reasons why you should choose OT Credit for all your financial needs.

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TTMedia - a digital agency in Singapore that designed the creative website for OT Credit - a money lender in Singapore that offers the best loan services.