Close-up of credit score scale on laptop screen, highlighting the concept of good or bad credit

How to Get a Personal Loan Approved Even With Bad Credit

4 min

Sometimes, we are faced with situations that necessitate taking a loan. Whether it is a medical emergency or a life-changing upgrade (such as paying for one’s property downpayment), such situations require us to take a personal loan to be able to meet the expenses. But sometimes, the loan application may be rejected.

So, if you are one of those who have applied for a personal loan from banks in Singapore and had your application rejected, chances are that your credit score might be the reason behind this.

Banks go through your credit score before determining whether to approve your personal loan application or not. This implies that if you have a bad credit score, then your chances of getting a loan may be lower.

What is a credit score?

A credit score is a statistical value assigned to borrowers, showing their likelihood of repaying debts. This is given by a rating company, which individually and accurately assesses the creditworthiness of the borrower. It is also considered by lenders to determine the risk a credit applicant poses. The credit score is dependent on your loans or other payment histories.

Financial institutions like banks typically receive a customer’s credit report from the Credit Bureau Singapore.

Individuals who want to check their credit scores can also purchase their own reports.

You will then be presented with a grade according to the score range that shows the chances of a loan default.

Score Range Risk Grade Probability of Default
Minimum Maximum
1911-2000 AA 0.00% 0.27%
1844-1910 BB 0.27% 0.67%
1825-1843 CC 0.67% 0.88%
1813-1824 DD 0.88% 1.03%
1782-1812 EE 1.03% 1.58%
1755-1781 FF 1.58% 2.28%
1724-1754 GG 2.28% 3.46%
1000-1723 HH 3.46% 100.00%

Read this article for more information on the Credit Bureau Report.

Ways to get a personal loan approved even with a bad credit score

Restructure and consolidate all your current loans

In case you have many debts, like several credit cards or multiple small loans from banks, you can consolidate them into a single loan. This will allow you to manage your debt and build up your credit score.

The best lenders assist you in accomplishing the consolidation and restructuring by providing a loan according to your capacity to pay. They consolidate the debts in one account and find the minimum monthly payment that you can manage without risking the loss of your ability to pay for basic requirements such as utilities, rent, and food.

Take smaller loans

It is tough to get a larger personal loan from banks in Singapore with a bad credit score. In such situations, you can choose to apply for smaller personal loans.

However, do not forget to pay off personal loans at the right time, and ensure you repay and manage these debts effectively. Doing so demonstrates that you can pay off these loans, thereby improving your credit score. Thereafter, your chances of getting approval improve significantly.

Woman looking at a laptop screen and considering to get a personal loan

Look for more options

You can also search for more options, such as getting a loan from a licensed moneylender.

Even with a bad credit score, all is not lost. Licensed moneylenders will still approve a loan, but may charge higher interest for it. But the good news is that they cannot charge more than 4% per month, as mandated by law.

In addition, these legal lenders also provide quick approval for loans, usually within 30 minutes to an hour. Licensed moneylenders are a great choice when you require a loan immediately and are rejected by banks for a poor credit score.

And unlike banks, licensed money lenders do not impose minimum salary requirements, although the maximum loan amount you are eligible for would be affected by your income.

Add a guarantor or apply for a joint loan

Another way of getting your personal loan approved is to choose a joint loan. In this type of loan, you can collaborate with someone (any family member such as your spouse) with a better credit score. It improves the chances of getting the loan approved as the other person stands as a co-applicant with the borrower who has a lower credit score.

Adding a guarantor reduces the credit risk for the lender as the guarantor or co-applicant is equally liable for loan repayment in case the primary borrower defaults.

Improve your credit score

There are a few ways to improve your credit score such as paying off debts on time, checking your credit report for errors, and questioning the errors.

When applying for loans, it’s important to note that every loan application submitted to Credit Bureau Singapore members such as banks will trigger credit inquiries and potentially impact your credit score. Therefore, when you choose to begin applying for a loan, carry out your research thoroughly. Do not blindly apply for a loan from every lender you encounter. However, it’s worth mentioning that loan applications made to licensed moneylenders are not recorded.

It takes time to improve your credit score. There is no solution to the problem of bad credit scores. Do your best to begin improving.

If you need a personal loan urgently and have a bad credit score, it is better to approach a reliable moneylender like Cash Direct. We assess each application on its merit and do not reject them for template reasons.

Ready to explore your options for a personal loan? Contact us today to discuss your needs and take the first step toward your financial goals.


The information provided on our website is for educational and informational purposes only and is not intended to be a substitute for legal or financial advice. While we try to ensure that information on this website is accurate, we do not warrant that the information will be free from error. We shall not be liable for any loss or damage that may arise from the use of this website.

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