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Once you have gone out of the bank, the consultant will do a check on you. First, he will fax your name and identity card number (or passport number) to the bank's head office where a clerk will key in your details online to check whether there's any ongoing court cases, or bankruptcy involving you. There are many people out there with similar names, so the identity card number helps them along. If you have some record on file somewhere, you won't get the loan. Therefore, if you wish to apply for a loan, make sure you are clean. Settle any outstanding court cases before you apply for a loan. Once the case is closed, your record is expunged from the court's database. You should do a check at the subordinate courts or online at DATAPOOL (pay a fee) to confirm this. By the way, this database belongs to a commercial firm specialising in such searches. The bank merely subscribes to it. In fact, all banks and financial institutions use the service.

Banks used to write to other banks with which you maintain bank accounts to check on your financial status. Now, because of keen competition coupled with the desire to give a turnaround (approval) time of 24 hours, they have done away with this practice. Branch Managers have approval limits assigned to them, so if your loan is a small amount, say S$10 000 or less, the Branch Manager can approve it. Otherwise, your application goes to the head office for approval. But, if you are applying at a local bank, remember - these banks are still conservative, which means approval will be likely to come from their head office.

You can expect the outcome of your application to be told to you within one or two working days. Once your loan is approved, you are required to come to the branch again to sign the acceptance letter, and open a current account with the bank. The current account is for you to bank in your monthly instalment and also withdraw the proceeds of the loan when it's approved. If you do not want the chequebook that comes with the account, let them know. You only need to bank in the instalment when it comes due and there's no service charge because you are not using their cheques. If you are not using their cheques, they will give you a counter cheque for you to collect your loan proceeds at the cashier.

Your first instalment is due one month after the loan is disbursed to you. You can ask for a specific date. Please do so. You will want to fix a date that will be most convenient to you. Remember, you have other commitments too and you wouldn't want the timing for the instalment to crash with your other commitments.

If you find that you can't service (pay) the instalments when they fall due because of some unforseen circumstances, by no means delay payment. Once you have a bad record with them, they will never let you off, which means, you can say goodbye to any future loans you intend to take from them. Find other means to come up with the instalment amount - never once think that they will be sympathetic. Banks tag a flag to all customers in their system, whether the customers have a deposit or a loan with them. This tag stays with the customer for as long as the customer has an account with the bank, and even thereafter. Some banks give a status code "1" for ordinary customers (no bad history), there is no "2", "3" for customers with some bad payment record and "4" for bad customers. Once the bank tags 3 or 4 against your name, it stays forever and you will be unlikely to get any loan from it.

If, midway through your loan, you decide to pay up whatever outstanding amount left in the loan, you may get a rebate on the interest payable. This rebate rate differs from bank to bank.

If everything goes well and you have sailed through all your loan instaments without any problems, you can ask for another loan midway while the first loan is still being serviced. Let's suppose you have paid back S$3000 of the S$5000 loan you took. You will not get a new S$3000 loan. Don't forget, your monthly instalment amount remains unchanged, so it works against you. Your only hope is that, in the last two years since you took the loan, your salary has gone up quite a bit and your other commitments have come down. If that's the case, you will stand a good chance of getting another loan approved. Otherwise, you are just plain wasting your time asking for another loan.

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