Possible Reasons Why Your Personal Loan Application Got Denied

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This article originally appeared on Payment1.com

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When your personal loan application gets denied, it can be disappointing. Most people are also puzzled. Even people with strong credit scores can get denied, and it makes them wonder why. Below are a few common reasons why banks deny personal loan applications so the next time you apply for one, you’ll know what and what not to do.

 

  1.  Bad credit score

 

Let’s get the most obvious reason out of the way. When you have a bad credit score, lenders are most likely to deny your personal loan applications. Your credit score is what tells banks the likelihood of you paying them back for the loan. If your track record is not very good when it comes to paying what you owe, chances are your bank will be resistant to granting you loans.

 

  1. The loan amount is too high

 

Lenders will take into account your capacity to pay back when you apply for a loan. When you fill out that loan application form and put in too high of an amount in the “desired loan amount” field, banks will most likely deny your application. To avoid this mistake, use an online loan calculator. Loan calculators can tell you how much you can borrow given your current income.

 

  1.       Unstable employment record

 

Because banks consider your ability to pay the loan off in the long run, they will be looking at your employment record. So if you have an unstable employment record or worse, no employment at all, banks will be hesitant to grant your loan application. Lenders will require certain employment tenure or length of service, which is why banks typically require you to submit a certificate of employment.

 

  1.  Insufficient income

 

When you don’t make enough to apply for a loan, you will most likely not get approved. You need to be able to make the monthly loan repayments, and If you do not make enough money to pay them and at the same time address your basic needs as well, lenders will not grant you a loan. This is because you are most likely to use your income for your basic needs than to pay off the loan.

 

  1.  You have too much debt

 

When you apply for a personal loan, your bank will do a background check to see if you have any outstanding loans. This is so they are sure that you have the capacity to pay. If you meet the minimum income requirement and have a good credit score but have several outstanding loans, they will most likely be hesitant to grant you another one. The more loans you have, the less capacity you have to pay back an additional loan.

 

  1.  How you fill out the loan application

 

If you have any mistakes or inconsistencies in your loan application, lenders might not grant you your personal loan. Your data needs to be complete, correct, and consistent. Lying on your application will get you denial and could possibly land you on your bank’s bad side.

 

Consider the list above the next time you apply for a personal loan. Make sure you fill out the application completely and honestly, have a good credit score and enough income to make the payments, and make sure you’ve been employed a while.

Continue ReadingPossible Reasons Why Your Personal Loan Application Got Denied

Singapore REIT Fundamental Analysis Comparison Table – 3 June 2019

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Technical Analysis of FTSE ST REIT Index (FSTAS8670)

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) changed from 869.49  to 858.67 (-1.24%) as compared to last post on Singapore REIT Fundamental Comparison Table on May 5, 2019.

The REIT index is currently facing immediate resistance of 875 (the previous high in 2018) and trading within a falling wedge consolidation range between 848 to 870.  Based on the current chart pattern and and momentum,  the sentiment is BULLISH and the trend for Singapore REIT direction is still UP with a pause. All eyes will be focusing on whether the REIT index can break the 2018 high (875) and 2013 high (892) back in May 2013. Another scenario would be a break down of the 848 immediate support and we will see a larger correction of REIT index, heading towards the 200D SMA support of about 820.

 

Fundamental Analysis of 39 Singapore REITs

The following is the compilation of 39 REITs in Singapore with colour coding of the Distribution Yield, Gearing Ratio and Price to NAV Ratio. This gives investors a quick glance of which REITs are attractive enough to have an in-depth analysis. The 2 new IPO ARA US Hospitality Trust and Eagle Hospitality Trust are not included in this table due to insufficient data points.

  • Price/NAV decreases from 1.03 to 1.02 (Singapore Overall REIT sector is slightly over value now).
  • Distribution Yield increases from 6.40% to 6.51% (take note that this is lagging number). About 38.5% of Singapore REITs (15 out of 39) have Distribution Yield > 7%.
  • Gearing Ratio increases from 34.7% to 34.9%. 22 out of 39 have Gearing Ratio more than 35%. In general, Singapore REITs sector gearing ratio is healthy. Note: The limit of gearing ratio for REITs listed in Singapore Stock Exchange is 45%.
  • The most overvalue REIT is Parkway Life (Price/NAV = 1.62), followed by Ascendas REIT (Price/NAV = 1.42), Keppel DC REIT (Price/NAV = 1.49) and Mapletree Industrial Trust (Price/NAV = 1.40).
  • The most undervalue (base on NAV) is Fortune REIT (Price/NAV = 0.64), followed by OUE Comm REIT (Price/NAV = 0.68), Lippo Mall Indonesia Retail Trust (Price/NAV = 0.71), Sabana REIT (Price/NAV = 0.75) and Far East Hospitality Trust (Price/NAV = 0.73).
  • The Highest Distribution Yield (TTM) is Lippo Mall Indonesia Retail Trust (9.19%), followed by First REIT (8.60%), SoilBuild BizREIT (8.67%),  Sasseur REIT (8.75%)  and Cromwell European REIT (8.20%).
  • The Highest Gearing Ratio are ESR REIT (42.0%), Far East HTrust (39.9%) and OUE Comm REIT (39.4%) and SoilBuild BizREIT  (39.3%)
  • Top 5 REITs with biggest market capitalisation are Ascendas REIT ($9.0B), CapitaMall Trust ($8.9B), Capitaland Commercial Trust ($7.2B), Mapletree Commercial Trust ($5.5B) and Mapletree Logistic Trust ($5.3B)
  • The bottom 3 REITs with smallest market capitalisation are BHG Retail REIT ($359M), Sabana REIT ($442M) and iREIT Global REIT ($473M)

Disclaimer: The above table is best used for “screening and shortlisting only”. It is NOT for investing (Buy / Sell) decision. To learn how to use the table and make investing decision, Sign up next REIT Investing Seminar here to learn how to choose a fundamentally strong REIT for long term investing for passive income generation

  • 1 month increases from 1.82283% to 1.88538%
  • 3 month increases from 1.94507% to 2.00338%
  • 6 month increases from 2.00014% to 2.06215%
  • 12 month increases from 2.12550% to 2.18675%

Based on current probability of Fed Rate Monitor, the US Fed Reserve reduce the interest rate by 50bps to  2.00% in 2019. Probability of keeping the interest rate at 2.25-2.50% is only 3.2%! This means US Fed Reserve will cut the interest rate by end of this year! This is a big change from last month.

Summary

Fundamentally the whole Singapore REITs is slightly over value now. The big cap REITs are getting expensive and the distribution yield are not so attractive currently. Most of the DPU yield for big cap REIT is below 5% now. The yield spread between big cap and small cap REIT remains wide. This indicates value picks only in small and medium cap REITs.  For reference, 10-years risk free yield rate for latest Singapore Saving Bonds is 2.16%.

Yield spread (reference to 10 year Singapore government bond of 2.062%) has widened from 4.15% to 4.448%. DPU yield for a number of small and mid-cap REITs are still very attractive  (>8%) at the moment.  It is expected the next move would be on small and medium size REITs due to higher risk premium compared to big cap REITs.

Technically, the REIT index is still trading in a bullish territory and have been very defensive compared to STI. With the potential rate cut in 2019, don’t be surprise REIT index to break the resistance (875 and 892) to move higher.

 

 

If you need an independent professional review on your current REIT portfolio and need any recommendation, you may engage me in the REIT portfolio Advisory. REITs Portfolio Advisory.  https://mystocksinvesting.com/course/private-portfolio-review/

 

Continue ReadingSingapore REIT Fundamental Analysis Comparison Table – 3 June 2019

Money-saving Tips for the Self-employed

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This article was originally published by Uncapped Mortgage

Gone are the days when the American dream means climbing the corporate ladder. Over the last years, the mindset of the American worker has shifted to valuing flexibility and freedom over stability. Self-employment continues to be a rising trend as employees leave their day jobs to do freelance work or start their own business.

 

One of the major challenges self-employed individuals face is managing cash flow. Since you do not have the regular pay that a day job provides, not to mention health insurance and tax duties, it can be challenging when all these things fall on your shoulders. Saving and budgeting can be taxing, too, as there will be months when you’ll be flushed with cash, while there will be months when you’ll need to tighten your belt a little.

 

Below are a few money-saving tips for the self-employed.

 

Set a budget.  Whether you are a business owner or a freelancer, this is very crucial. Good financial planning can determine the success of your new venture. Total all your income sources. Make sure to list down all your expenses every month. Determine all the fixed costs such as monthly bills, subscriptions, and mortgage, which takes up a huge part of your budget. You may want to consider paying off your mortgage early to get it out of the way and have more room in your budget for other things like savings and retirement fund.  After listing down the fixed costs, add the variable expenses such as payment to freelancers if you hire some, and any other expense that vary month-to-month. By doing this, you’ll know the amount of cash you need every month to live comfortably. Stick to the budget as much as you can. There are plenty of budgeting apps and tools that can assist you with this.

 

Set your rate. Do not undersell yourself and do not be shy to increase your rates as you gain more experience. In terms of billing, it’s better to be billed in installments rather than in lump sum at the end of a project. It would be harder to budget your money if your cash comes in once every three months rather than having them sent in monthly installments.

 

Build your emergency fund. And maintain it. It is important to always save for the rainy days. An emergency fund can save you from high-interest debts in times of financial stress. Make sure you have a fund, ideally a 6-month cushion – for when something unexpected happens such as a big client backing out. This 6-month cushion cannot be built right away, but you must work towards building it as soon as you begin getting paid. Set a certain percentage of your income to be allotted to this fund every month.

 

Know your taxes. Now that you are self-employed, you no longer have your HR department’s compensation and benefits people to look after your taxes. You must do them yourself now. Be aware of the tax bracket you are in now that you have gone solo. Fill out an hsa tax form 8889. If you are a business owner, seek the help of a financial advisor in determining the best entity type to register your business as.

 

Get help. Time is money. If you think it would be best to delegate some of your tasks to freelancers in order for you to focus on more crucial tasks, hiring help could be a great idea. In addition to financial health, you also want to ensure that your mental health is strong when you’re self-employed. You can visit BetterHelp for free mental health resources, which are verified by licensed therapists and psychologists, to learn more about strengthening your mental health.

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