Five things to do before you apply for a loan

Contributed by CTOS

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The Covid-19 pandemic has resulted in economic challenges that have left many people needing financial assistance. Are you considering applying for a loan but are not sure if you are eligible? Before applying, here are five things to do to improve your chances of loan approval: 

Review your latest credit report 

Check your updated MyCTOS Score report to know your current CTOS Score and how your credit health is doing. This way, you can take steps to improve your score or fix any errors you find, such as a low credit score or missed payments, so that banks and lenders will be more likely to approve your loan application.

Avoid taking on new debt within a short time frame 

Every time you apply for credit, the record will appear in your CCRIS and your credit score usually takes a hit. Multiple applications in a short span could suggest to the banks and lenders that you are a riskier borrower and desperate for credit. So try not to apply for any other credit for at least six months before applying for new credit. 

Improve your debt to-income ratio


The debt-to-income ratio indicates the percentage of your gross monthly income that goes towards your monthly debt payments. Try to keep all your monthly loan commitments to not more than 40% of your net monthly income. Lower your ratio by reducing your debts and increasing your income. For instance, you could make extra payments to pay off your debt faster and take on an extra job or start a small side business to increase your income.

Compare terms and rates of different loan providers 

Different lenders will offer different rates because they all have their own different risk appetites. Do enough research to identify lenders with the best loan rates and terms, and check if there are any hidden fees. 

Obtain and organise income documentation 

Whether you are self-employed or work for someone else, you will need to have the right documents handy as proof of your income. Generally, you will need your latest three months’ salary slips / EPF statements (if employed by a company) or the latest three month’s bank statements (if self-employed). Each lender has a preferred way of doing business and is likely to request a different set of documents.

The faster you can provide the required documentation, the quicker they can process your loan application. CTOS aims to empower you with the right tools and knowledge to make good financial decisions, especially during these tough times. More than 1.3 million Malaysians have already signed up for the CTOS self-check to better manage their financial health.

Sign up and claim your FREE MyCTOS Report with CCRIS now at

What can you learn from your report:

•Missed payments

•All loans, credit card and non-bank debts

• Legal and bankruptcy cases

• Directorships and business interests, and more.  


Established in 1990, CTOS is a leading credit reporting agency under the ambit of the Credit Reporting Agencies Act 2010. Its three-digit CTOS Score will show your creditworthiness. It is an evaluation of an individual’s credit history and capability to repay financial obligations. The higher the score, the higher your chances of securing a loan.

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