Most people whether a businessman, student, professional, or even the average office worker may have at one time, been in a position where an injection of cash was much needed in their business or financial situation. However, they did not take up a loan just because they didn’t have enough information on loans. And, more often than not, one of the information lacking is simply, not knowing how long the time it takes to obtain a loan.
You may be currently in a situation where there’s a shortfall in your business budget or financial position and pulling at your hair with both hands in worry and frustration. There’s more money needed to be spent than money available to you or in your hand. “Yikes!” The money could be required for expanding your business or practice, or for bridging a cash-flow gap in your firm’s operating costs or perhaps you need a personal loan for that urgent renovation of your home. “Why not take up a loan?” You may ask yourself, and then one of the questions popping up soon afterwards is, “How long does it take to apply for a loan?” And that’s when you hit a brick wall. The reason being is that you don’t have the information at hand or it is ‘inconvenient’ to search for it.
Well, fret not as in fact the information on how long it takes to apply and obtain a loan is only a phone call or just a click of a button away. But for those who do not want to go the extra ‘click’ or so-called ‘mile’ to do your own research, I’ve compiled some information on the processes and times it takes in getting loans in Singapore for various lenders for you to make a comparison and decision.
For those looking for bank loans
In this day and age of ‘techno-convenience’ where technology rules supreme, and convenience means the world to us, we find that applying or buying anything seems to be done online. Whether it needs to be paid for or is free of charge and the item whether tangible or virtual can be purchased or obtained anytime over the PC or the Smartphone. Well, the good news is that you can also apply for loans online with banks, licensed money lenders, and in recent years also with P2P crowdfunding platforms which are a relatively new source of finance for entrepreneurs and also ‘fertile grounds’ for small investors.
Applying for loans whether for business or personal use is so convenient and easy nowadays. It takes mere hours only to just a few days and for bigger or more complex loans, a week to a few weeks time to be approved. From the initial application to the final approval and to the time cash is disbursed, certain types of loans like the small SME loans or business loans, account receivables loan types, credit financing (e.g. credit card loans), working loans, start-up loans, Spring SME Micro Loans, SME Working Capital Loans, peer to peer (P2P) crowdfunding loans, and others can now be transacted fully or almost fully online. Once approved, the money is banked into your account in just a day to a few days later in some cases.
Banks like DBS, OCBC, UOB, and others have online facilities for loan application with quick processing and approval times depending on the loan type and amount of the loan. Most of their online loan application form filling up takes only 5 to 10 minutes. Certain loans of smaller sums such as for a personal loan can have approval-in-principle (a provisional approval provided by the bank based on the information provided by the applicant) given by on-screen notification within 1 minute for applications submitted within prescribed times, for example, in the case of HSBC’s personal loan online application. Also in the case of HSBC’s “Next Day” Personal Loan Approval facility, when a valid application is made (with full required documentation submitted) the personal loan can be approved for amounts of up to $100,000 by the next working day.
DBS also offers the Business Term Loan through an online application that has a maximum quantum of $500,000 which doesn’t involve branch visits or require signatures, thus making it a very streamlined process. OCBC’s Business First Loan (Business Micro Loan) which has a quantum of up to $100,000 may take a total of 4 to 6 days only for the whole process of obtaining it. Only one day is taken to apply, process, and respond to you on your loan eligibility provided all necessary documents are submitted. The other 3 to 5 days will only be needed for you to receive the money once the loan has been approved and signed.
Licensed money lenders such as Credit 21 have online loan application services with processing times of a day to a few days. In the case of Credit 21, when final approval of the loan application is given and upon signing of the loan agreement at their office has transpired, the money is given on the spot.
A new, efficient form of business loan – P2P and Online Only Loans
For most P2P platforms, the whole process of obtaining a loan from the initial application to the disbursement of funds usually takes 15 to 20 days or less. The business loan application is approved in 4 to 5 days time or lesser. Take Funding Societies, which has many instances where the approval and the sending out of information about the loan details to its thousands of potential investors, takes only 3 days. But with their new FS Bolt mobile app, loan application can be done in just 2 minutes while approval can come back within 2 hours. Also, notably funds up to a quantum of $100,000 are later disbursed within 24 hours.
For those who want to apply for loans by more traditional methods (involving contact by phone, filling up hard copies of loan application forms, and also physical meetings etc.)
If you’re the type who isn’t much into technology, then there are options of applying for loans by the usual means such as having a telephone discussion and then followed by a visit to the bank branch, like in the case of the UOB Business Loan application procedure. But you cannot totally escape using the PC or Smartphone because you need to first request a call back by filling out an online request form and submitting it over the internet. The call back by a bank officer will be received later within a day. So the whole process of application from applying for the loan to approval and then finally to funds being disbursed may take about 5 to 8 days more as compared to a virtual or cyber way of getting a business loan from a bank. But the real noticeable difference is that it is not so convenient, easy, and practical. The truth of the matter is that sometimes going to the bank for a face to face meeting might only be feasible to the applicant a few days after the initial online request for a call. So the whole application process for a loan is extended further.
When it comes to licensed money lenders the process of getting a loan by more conventional means also can be done by just dropping by their office straightaway. One can get a loan approved with contracts prepared on the first visit if full documentation is provided by the applicant, and that the loan is not a large complex one, within 60 minutes, as in the case of Credit 21. For larger loans with more variables involved thus needing more complex calculations, this could take up to 4 to 7 days for the whole loan process to be completed.
So currently, most lenders in Singapore do rely to a certain extent on the internet even though they are categorized as being more conventional or traditional in their loan application processes. There’s still the initial online form to fill out and submit by the loan applicant even though the rest of the loan application process does not involve the internet. The fact is that relying on the internet or cyber methods of applying for loans is much quicker, easier, and convenient overall when compared to older methods. The process is even more streamlined, smooth, and effortless especially when the whole process of getting a loan can be done on a mobile app. To date, only one bank and one P2P platform have developed this unique way of applying, processing, and approving loans in the quickest of times.
Therefore I conclude that each lender genre and within lenders of each genre type too there are variations in the time it takes to apply for loans. And there is certainly a noticeable difference in general in the time taken by virtual means compared to more traditional methods. More and more lenders are moving into techno means of loan applications, processing, and approving loans using computers and Smartphones, involving text messaging, mobile apps, scanners, automated systems, chatbots, WhatsApp messaging, etc which replace phone calls and physical meetings at the office. Overall, the time it takes to apply for a loan and the approval period gets shorter over the years. This scenario applies to all types of loan applications and all types of lenders.