Applying for a loan can often feel like a time-consuming and complex process, but there are important reasons behind the length of time it takes. Understanding these reasons can help you navigate the process with more patience and clarity.

1. Comprehensive Risk Assessment: Lenders need to thoroughly assess the risk involved in lending to each applicant. This involves evaluating your credit history, income stability, existing debts, and the purpose of the loan. For businesses, lenders may also review financial statements, cash flow, and industry risks. This detailed analysis helps lenders determine your ability to repay the loan, ensuring they are making responsible lending decisions.

2. Verification of Information: To minimize the risk of fraud and ensure that they have accurate information, lenders must verify the details you provide in your application. This can involve contacting your employer, reviewing bank statements, and checking credit reports. The verification process is crucial to ensuring that the information is correct and that the loan offer is based on a true representation of your financial situation.

3. Customization of Loan Terms: Lenders often need to tailor loan terms to fit your specific needs and financial profile. This includes determining the appropriate interest rate, loan amount, and repayment schedule. Customization takes time, especially when considering factors like your risk profile, the type of loan, and current market conditions.

4. Regulatory Compliance: Financial institutions are required to adhere to strict regulatory guidelines and legal standards when processing loan applications. These regulations are in place to protect both the borrower and the lender, ensuring that the loan process is fair, transparent, and compliant with laws. Adhering to these regulations often requires additional paperwork and review, which can add to the time it takes to process a loan.

5. Multiple Levels of Approval: Especially in the case of higher-risk loans or larger amounts, the loan application may need to pass through several levels of approval within the lending institution. Each level of review is an additional safeguard to ensure that the loan is appropriate and that the lender’s interests are protected.

6. Market Conditions and Internal Processes: Sometimes, the length of the loan process is affected by external factors, such as market conditions or the volume of applications a lender is handling at a given time. Internally, different lenders have varying processes and timelines, which can also impact how quickly your loan is approved.

Many loan brokers tout fast turnover despite having no control over lenders who do not work for them. However, as more brokers engage in false advertising, others feel compelled to follow suit, leading to a race to the bottom in terms of industry transparency. This situation ultimately disadvantages borrowers, who are left without a reliable method to guide their decision-making when choosing a broker.

Therefore, we can only tell you that many of our Financing Partners can reply to enquiries within hours. However, depending on factors such as the nature of your risk profile, quantum, loan type, and the volume they are working on, it will differ from one to another.

FindTheLoan.com ties up with our Financing Partners on a company level, unlike brokers who may be just working with a particular RM they know and a lender can have hundreds of and come & go. Via our platform, the Financing Partners and their users can assign and balance out the distribution of the enquires among their entire salesforce.

For certain higher-risk industries/profiles, many lenders limit how much they lend to a particular sector each month to diversify their loan books so as not to be overly exposed to a certain sector – comparing all the enquiries among their entire sales forces to pick the better one to fund. So even the RM cannot tell you if you qualify until he or she pushes it upward first. As such, certain higher-risk industries/profiles may experience a slightly longer wait time. We also recommend that you take those websites that try to tell you what rate you can borrow, instantly, with a pinch of salt.

Some lenders, especially the smaller ones, may care less about “misleading ads” (Singapore’s advertising guidelines generally do not consider exaggeration as misleading, especially for non-healthcare products. Or if 1 hour applies only to a small subset of customers and is not entirely untrue.) and may tout, for example, 1 hour or 1 day is all they need for them to make an offer. We recommend you take that with a pinch of salt and buffer the time required and not apply for a loan only at the last minute.

Some lenders may also give you a conditional offer within an hour by doing a simplified assessment. That means it is just indicative and they will need more info or time before they can make an actual offer.  When using FindTheLoan.com, all offers on your dashboard are after they have done a full assessment.