5 Reasons Lenders Are Not Giving You Better Loan Terms

5 Reasons Lenders Are Not Giving You Better Loan Terms

When deciding on a moneylender and a loan product, you want to choose one that has terms favourable to you. This way, you can guarantee timely repayments of your monthly obligations. Also, paying down your loan will not be too much of a burden financially.

But what if you rarely get the loan terms you want? Are the quick money lenders to blame for either denying you or giving you less-than-ideal terms?

It’s not always the lender, though. Cliche as it may sound, sometimes it’s you. Here are five of the most common issues that affect your loan applications.

You applied for a loan that’s bigger than you can handle

Lenders always check your capacity to pay them back before approving your loan. If they determine that the principal you applied for is too much for you to reasonably pay back, they may deny the loan or give you very strict terms.

Lenders take several factors into account to determine your ability to pay. These include monthly income, credit score, total debt servicing ratio (TDSR), as well as any history of previous loans.

Your credit score is not that good

Your credit score is a primary measure that lenders use to approve your loan applications. In Singapore, your credit score ranges from 1000 to 2000, with 2000 being the most likely to get approved for loan applications. 

The closer your score is to 1000, the more likely you are to default on your loans. With this kind of credit score, lenders have little confidence in your ability to pay them back. This means they may not want to give you favourable loan terms.

You have inconsistent sources of income

Lenders take a look at your main sources of income to find out if you can repay your loans. Most, if not all, lenders prefer that you have a stable, consistent source of income. 

This is easy if you hold a full-time job. But if your main source of income is a business with variable monthly earnings, your income may not be as stable as the lenders would want. In turn, this will affect the terms lenders are willing to give you.

You have a high TDSR

Total Debt Servicing Ratio (TDSR) is a statistic that measures the proportion of your monthly income that goes into paying down debts. The Monetary Authority of Singapore (MAS) states that this ratio must not exceed 55% so you can qualify for loans. If your TDSR is higher than 55%, your loan applications will be rejected. If it’s not above 55% but close to it, your loan may be approved but the terms may be more stringent.

Your purpose for the loan does not fit the lender’s guidelines

Different loan products have specific purposes that lenders allow. For example, a business loan can only be used to provide extra capital for your business. You cannot use it to fund a vacation or your child’s education. There are other loans that you can get for those purposes.

If what you intend to do with the loan does not match what the lender requires, then your application will most likely be denied. 


If you find your loan applications constantly getting rejected, it’s time to evaluate your financial situation. A bad credit score, high TDSR, unstable income, borrowing too much, and loan purpose mismatch are all valid reasons for lenders to deny loans. 

Also, perhaps the lender you chose is not that reliable. Pick trustworthy ones like 96bm Credit, as they will also help you in other ways to get out of a tough financial situation.

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