Sure, all licensed money lenders are alike as they are all legally authorised by the Ministry of Law and the terms of your personal loan are going to be the same no matter who you borrow from. No, this is not the case; in fact, going from one lender to the next you will find the terms can vary greatly. And, when you go with a licensed versus non licensed lender, the changes are going to be even more drastic. Can you pay off the loan, how much can you take out, and are you going to be approved? You are asking these questions, and others when the time comes for you to apply. So, what should you know prior to applying, and actually taking out the personal loan? These are a few things you should consider if you are planning to or have already applied for a personal loan, and want to ensure you go through the best lender possible.
What is it?
What is a personal loan? As the name implies, it is a loan you take out with a licensed money lender. But, unlike a traditional bank loan, you are going to pay a higher interest rate. You are usually going to have to make 5X the income, as the loan amount you are borrowing as well. And, since there is no credit check, you are going to have proof of income, so you can repay, and you are going to have to repay in a shorter amount of time (typically up to 60 months) when you apply for such loans.
When do you use them?
Personal loans can be used by many people in many different ways. For some, it is to fund your vacation or the purchase of a new car. For others, you simply wish to consolidate your debts, and repay all of your credit cards with a single monthly payment. No matter what the reason is you want to make sure you are doing so intelligently. You do not simply want to apply for another loan, and go on paying a higher interest rate, just so you can have the cash in hand. So, if you do plan on applying, you have to do so intelligently, and you have to make sure you are going through a viable lender when you are ready to take out the cash loan.
Indulging on entertainment is one of the main reasons people do take out these loans. If you plan on going on vacation and do not have the funds in place to pay for it, this is a great way for you to do so. Or, if you plan on taking a short trip, you can do so when you take out a personal loan. Investments are another reason people take out these loans. If you plan on investing in land or property, with a money or personal loan, you have the cash in hand, so you can pay for these investments you would like to make.
And, the consolidation of other debts is a major reason people take out personal loans. If you owe several creditors, you can consolidate and make a single monthly payment, as opposed to paying each creditor every month. This allows you to reduce the interest you are paying, as it is typically higher when you go through a credit card. And, it is also a way you can reduce the total number of payments you are going to make each month. As opposed to paying 3 to 4, you are now only going to make one payment each month as you consolidate. So you repay faster, and you are going to pay less, when you choose this route for borrowing a personal loan.
By June 2019, new limits are in place for borrowers. If your debt is 12X your monthly income, there are going to be restrictions as to how much and which lenders you can go through for the personal loan you wish to apply for. SO, for those who do want to consolidate, you should keep this in mind as the regulations have changed, and as the terms and amounts are going to change, when the time comes for you to apply for the loan you wish to take out with a lender in Singapore.
Where to apply?
You have options; in fact, there are non and licensed money lenders you can go through. If you want to go with a legitimate company, one you know is reputable, and is going to provide you reasonable terms, choose a licensed lender. Not only are government regulations in place to protect you, this is also the only way to ensure you know outright what you are going to be paying for, how much, and the maturity of your loan. You have to take the time to find a viable lender, and you should only take out monies with a licensed money lender.
It is not only for your safety as a borrower, but also to ensure you do not end up owing more than what you bargained for. With many legitimate lenders, which are fully licensed, it is up to you to take the time to compare, and find out what the terms are on the loans you are applying for, in order to ensure you can afford the personal loan you are going to take out, and in order to ensure you are fully aware of what you are getting into as a borrower for such loans.
When you need cash, you do have options as a borrower; but, you have to familiarize yourself with the terms, the type of loans, and what you are going to be paying, for any lender you choose to go through as a borrower. So, taking the time to compare, and learn about loan terms, are some things you should do as a borrower. and, when the time comes for you to decide up on a lender, and the loan amount you plan on applying for, these are a few of the factors which will help guide you in the decision making process as a borrower in Singapore.