5 things the lender will check before approving your loan

Whenever you go to a money lender for getting some money on a loan, it is important to go prepared with all the relevant documents. The loan may be of any type such as a personal loan, mortgage, education, etc.

You must submit the loan application with the required documents. There are many good at money lending in Singapore. Different lenders will provide loans at different rates of interest. You must compare them and choose the best offer for you. However, some major and common aspects that every lender checks are your creditworthiness or credit score, credit history, and income as they need to ensure if you are capable of paying the loan amount back or not.

For this, you must ensure the 5 C’s of credit. All these Cs stands for different criteria such as Character, Capacity, Capital, Collateral, and Conditions. Let us understand it more clearly.


This is also known as your credit history, which covers your old payment dues, previous loans, etc. Usually, each lender has different criteria for examining and deciding whether you are eligible for the loan or not. Some have a fixed method of assessing credit score. A person with a higher credit score tends to be safer for the lender.



This refers to your capability to repay your loans. For this, the lender compares your debited amount and your income. This is calculated as the debt-to-income ratio. The lender suggests the lower the ratio, the lesser the risk of you failing to pay the loan. To maintain a good score, you should apply for the amount you can repay without disturbing your daily or monthly payment.


This criterion covers your savings, assets, and investments. You should have a good sum of money in your hands as a cover in case of failure to repay, which will increase your chances to get your loan approved with good offers



This criterion includes security that you keep with your documents for the loan. Other than personal loans, this is compulsory in every type of secured loan. This security is taken under the lender’s control in case you fail to pay the loan within your tenure. Collateral can also help you to get your loan approved when you cannot get it based on your creditworthiness.



This criterion depends on what conditions the lender sets for lending the money. In some cases, lenders lend the money only if you satisfy a specific reason or purpose. Having good knowledge about such situations can give you a good idea about your eligibility for a loan.


Keeping these criteria of 5 Cs in mind will help you to work for your financial goals efficiently. They will help you to track your eligibility for taking the loan in the future and will save you time by providing you with good deals.