Things to consider when taking a personal loan in Singapore

1. You need to be between 18 and 65 years of age, employed full-time and contributing to your CPF every month.

2. Gather any documentation that may be required for you to apply for your loans.

  1. Proof of identity; NRIC
  2. Singpass login credentials; to check your monthly CPF contributions, and NOA
  3. Proof of employment; employment contract, work permit, S or E pass
  4. Proof of residency; tenancy agreement or a bill addressed to you the applicant.

3. Consider the duration of a loan. It will largely depend on your monthly income, and how big rate you can afford yourself, but try to clear it as soon as possible, since you never know when you are going to need another loan, especially if you are planning any major loans in the near future.

4. Since most personal loans are unsecured, you do not have to put any collateral as a security mechanism for this type of loans, but it usually means higher interest rates than with secured loans.

5. Compare interest rates and fees. Make sure you check both, since some banks may offer lower interest rates, but will charge you higher processing fees, or late payment fees.

6. Inquire about late payment fees. They are not the same in all banks. If you fail to repay your loan in time, late payment fees may rise very high, and increase your debt significantly.

7. Choose your lender wisely. If you are looking to take up a loan from a licensed moneylender, make sure that they are in fact licensed. You can cross check their company name and license number through the registry of moneylenders. The list is updated periodically to include those who have been recently suspended.

8. In order for your application to be processed faster, you should submit it online, although these days personal loans usually do not take more than a day to be processed.

NOTE; It is advisable to know how much money you are in need of before you visit a moneylender. You should also only take the amount you need and nothing more. As the loan is your responsibility to pay back, it would become a financial liability if you take up a loan larger than what you’re comfortable paying back.

What is a licensed moneylender?

The main difference between taking a bank loan and a loan from a licensed moneylender is that the bank offers secured and unsecured loans whereas a licensed moneylender only offers unsecured loans. Much like banks, the description of a moneylender is obviously to offer financial assistance, except Moneylenders also offer loans as small as $300, which major banks don’t offer. Unlike secured loans, an unsecured loan doesn’t affect your existing credit scores that degrade your chances of getting a mortgage loan or a car loan.

A licensed moneylender is a private entity offering financial assistance to the general public. Moneylenders also operate under a strict code of conduct provided by the Registry of Moneylenders Singapore. So there’s no worrying about moneylenders breaking the law in an unlawful manner. How can you be sure if the moneylender you have engaged with is licensed? You can always ask them for their license number or for their registered company name and cross reference that with the list of registered moneylenders in Singapore. The Ministry of Law Singapore keeps a list of all registered moneylenders in Singapore accessible on their official website. The registry of moneylenders is regularly updated to include those whose licenses have recently been suspended.

What to expect when borrowing from a licensed moneylender.

Rest assured when dealing with a licensed moneylender, as the moneylending practice is nothing if not professional. The main draw for a licensed moneylender lies in the immediate approval of your loan and receiving your loan in cash on the same day of application. As are the flexible loan amount that registered moneylenders are able to grant. Unlike major banks that offer personal loans at a minimum loan amount no lesser than $10,000, registered moneylenders can grant personal loan amounts that starts as low at $300. Since license moneylenders’ loans are unsecured, it means that there’s no need to put any collateral as a security for any types of loans that you take up with a registered moneylender.

Since most personal loans that you take up from a licensed moneylender are unsecured, there is no need for you to leave collateral as a security deposit to the institution, but this usually means that you’re paying higher interest rates as compared to taking on secured loans. Take some preventive measures on your part and get your respective loan officer to take the time to brief you on their contact terms, interests and other fees, such as late fees, late interests and or administrative fees, before you sign the contract to take up your loans.

Transparency is an important factor when it comes to anything binding you financially. When you engage with a Bank or a Licensed Moneylender, you will most definitely be asked to sign a contract, legally binding you to be responsible for the loans that you take up. Transparency in a loan office is one of the signs to look out for when looking for a suitable licensed moneylender. In this case, a company with high reviews is a good sign that the loan office is trusted by their clients.

The process of obtaining a loan from a licensed moneylender is fairly simple. Firstly, have your pick at a suitable registered moneylender of your choosing and you can fill out an application on the spot at their loan office. The loan officer will then advise you on how much you are able to loan based on your monthly salary and any kinds of outstanding loans you may have. The loan officer will then discuss with you the amount of which you want to loan and the type of repayment schemes that you are eligible for. Once your loan application is approved by the loan officer, you will be able to receive your full loan in cash immediately.


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