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Getting It Right In Personal Loan Application

By Kally / May 18, 2018

Singapore is one of Asia’s highly developed cities and as such, the cost of living and expenses can be quite high. Whether you are working or studying in the city, you would need some funds on hand to pay for your expenses and other necessities. However, there are days when you feel your on-hand funds is not enough to the point you feel like you would be unable to live the next day as comfortably as you could or should.

When your salary or savings is not enough to sustain your expenses, there are many options to consider to help you fund your needs and pay your expenses. You can borrow money from your family or get a personal loan from a bank or a moneylender.

However, if you are new to all this financial terminology, you may not be familiar with the inner workings of what a “personal loan” is and how it differs to other financial services. Is it like mortgages? Or something different? What are the risks? What are the advantages? Is there some criteria to follow before you can get a personal loan?

What are Personal Loans?

Personal loans are actually “unsecured” type of loans which do not require a collateral to acquire. If you are somehow unable to pay your personal loan, the bank cannot repossess your properties. They can repossess properties like your house or car if you are unable to pay a mortgage loan.

While there is no need to submit a collateral for personal loans and worry about it being repossessed by the bank or moneylender, it does have higher interest rates in comparison to mortgages. You would also find your credit score damaged if you failed to pay your personal loan or default it.

What else are the pros and cons of personal loans?

Advantages of Personal Loans

Here are some of the advantages of personal loans:

  • Availability
    Personal loans can easily be received after one week of application. Sometimes, it is handed on the same day.
  • Fixed Interest rate
    Unlike credit cards that come with variable interest rates, personal loans are fixed and would only rise up if your balance increases.
  • No collaterals
    As noted above, you do not need to worry about the bank or moneylender getting any property from you if you fail to pay your loans.

Cons of Personal Loans

Here are some of the disadvantages of personal loans:

  • High Interest
    Although personal loans have fixed interest rates, they actually come with high-interest rates as your balance remains very high. As a result, you pay more for what you actually borrowed.
  • Affects Credit Rating
    If you have a good credit rating, you may be able to still get some loans with lower rates. However, this would mean you would only be able to get collateral loans for your next money needs.

How does a Personal Loan Work?

When your personal loan application is accepted, you will be receiving the amount you requested and the time period as to when you need to repay it back. The interest rate and payment period of these loans may vary depending on your arrangement with the loan provider, although it may span for a few years.

It is also common that repayments are amortized, meaning it comes with an interest charge and the principal amount you need to pay. Fortunately, the payments would not balloon over to a higher amount by the end of the loan term, which makes it easier for you to pay it monthly.

Personal Loan Requirements

Singaporeans, from ages 21 to 65, are qualified to request for a personal loan if you manage to submit the following requirements:

  • Proof of Identity: Singapore Identification Card
  • Proof of Address: Any document showing your name and address (ex. Credit card bills, phone bills)
  • Proof of Income: Must have an annual income of $30,000 or higher, Central Provident Fund annual statement, the latest income tax notice of assessment or latest computerized salary.

Foreigners based in Singapore, from ages 21 to 65, are also allowed to request a personal loan if they also submit the following requirements:

  • Proof of Identity: Employment Pass and Passport
  • Proof of Address: Utility bills showing your name and address
  • Proof of Income: Annual income must be from $40,000 to $60,000, latest yearly Central Provident Fund statement, latest computerized salary or latest income tax notice of assessment

For other types of personal loans, additional requirements may be requested depending on the loan provider. It is crucial that you ask first before you file your loan application.

Available Personal Loans in Singapore

If you in Singapore and in need of some funds, there are three types of personal loans you can avail depending on your preference and need.

  • Credit line
    With this type of personal loan, the lender determines how much you can borrow from your credit line whenever you need it. When you pay, you only pay the interest and the borrowed duration. After you pay everything, you no longer have to pay anything until you borrow money again.
  • Personal Installment Loans
    This type of personal loan is the standard type of loans where the money is given to you upfront. You would need to pay it back monthly for a certain value.
  • Balance transfer
    If you do not want to pay numerous companies, you can simply consolidate them into one big bill by seeking a balance transfer loan. A grace period may be included in the arrangement depending on the lender in question when you request this loan type.

Should you take out a personal loan?

Taking out a personal loan should not be made haphazardly because it may not be appropriate for your financial need or capacity. You must be able to pay the money back regularly without fail. If you are unable to commit to paying it regularly, you should consider other options because defaulting loan payments come will affect your credit rating for future loans.

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    How Can The Foreigner Loan In Singapore Help You?

    Without a doubt, Singapore is among the most beautiful place to live in. However, for foreigners, living in Singapore can be rather difficult. Considering the cost of living here is among the priciest in the region.

    For an expatriate living studying and working in Singapore, it can drain you money-wise. And when your only income source is your employment, you could face some difficulties with your finances at any time.

    When you are in such a situation, it would be time for you to consider taking a foreigner loans from a moneylender. When you are low on cash plus there are bills to pay. Consider getting some additional money. This you can obtain using a foreigner loan offered by moneylenders in Singapore.

    Foreigner Loan

    You might be questioning what a foreigner loan will do for your current financial situation. Actually, this is a very important thing for you to question about and consider. When uncertain on using these sorts of alternatives for money, educate yourself on the way they work. This might help you resolve the hesitance.

    Different from the widely held belief system, the foreigner payday loans are not there to add you more debt. Actually, they are offered to help you settle any immediate financial obligations.

    Mainly those that won’t be put off till the next payday. You might be wondering how you’ll endure additional fees and rates. In particular, if you are making use of a small amount through this loan type. Even then there are some costs connected to taking out the cash advance or short-term payday loan. It’s for this reason why the use of a foreigner loan needs to be done after a thorough research.

    A foreigner loan can help you pay off several bills or a bill on time. This way you do not incur all the extra late fees as well as bank fees. This makes it a smart method of making use of this type of quick cash. This is provided that the charges from your payday loan lender are not higher. This is when they are compared to other charges. More so those you would incur when you didn’t pay the bill on time.

    There are many benefits of using a foreigner loan. Another being that it will also give you the comfort you need in your financial situation. This is because the payday foreigner loan will relieve pressing financial strain. Given that you have a pile of bills which seem to keep growing. Or late fees which also seem to increase daily. Making use of a payday loan will offer you some short-term break. Plus it will help you regain your financial control in between your monthly wages.

    Keep in mind, that even though these loans help you manage a temporary financial setback. This means that the foreigner payday loan is not intended for use as a long-term option. One thing you need to realize is that most moneylenders anticipate being repaid. And always the loan is to be cleared with your following paycheck. Therefore, it is very important that you make a budget to guide into getting this done.

    You need to realize that the procedure for the short-term payday foreigner loan is very simple. In addition, the request for a loan is quick and simple. Thus it is possible for you to receive the funds you require within the shortest time possible.

    An added benefit you need to be aware of is. That choosing a payday loan will help protect your credit rating. This is because the two will rarely interfere with one another as they are kept separate. At the end of the day, this will keep your payday loan unreported. This method is particularly great for individuals who do not have any existing credit. Also, it’s helping those individuals who’ve had troubles with their credit. Thus it will be useful to help you improve your credit score.

    A payday foreigner loan will help you manage of all of your bills immediately. And at the same time, you will be protecting your bank account from incurring overdraft charges. At this time it is upon you to maintain the bills down. This you can do by making repayment of the payday loan. Hence you can continue to live healthier and happier. And without you experiencing financial burden pressuring.

    Even then, there is a very important aspect for you to keep in mind. A foreigner payday loan attracts rather higher rates of interest. The reason for this is because foreigners don’t own any properties in the country. The property when present can be used as a type of collateral.

    Therefore, the rates of interest will, of course, become a lot higher. This, however, is not a key concern amongst most foreigners bearing in mind of how urgently they require the funds. Also, they look at their ability to pay off their loan using their next salary. What the moneylenders tend to keep in mind mostly is your having the ability to repay your loans. And this they do. Depending on the deadline put in place during the signing of the loan contract.

    How you Qualify to access a Foreigner Loan

    For you to access this loan type here are some of the basic requirements that you will need to meet.

    • You have to be between 21 to 55 Years of age
    • Be sure you have a valid pass of Employment in Singapore
    • Important make sure your Passport is valid
    • You need to have Full-Time form of Employment
    • Also, you need to provide your lender Proof of Billing (an example is any receipts indicating your current residential address)
    • And finally, you need to submit your most current payslip from the past 3 months

    Conclusion

    Living in Singapore can be rather difficult. Since the cost of living here is among the priciest in the region. A foreigner loan can help you pay off several bills. Thus, it will also give you the comfort you need in your financial situation.

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      Tricks To Get A Personal Loan With Bad Credit History

      Just like the questionable multimedia documents you have on your hard drive, a few things cannot be removed regardless of how hard you might attempt to delete it. These files always leave behind a track that is easy to dredge up. The same goes for your credit practices as well; in this particular case, deleting will only come by means of getting rid of the debt fast, so that you can enhance your credit score.

      However, it always does not work that way. In desperate attempts to apply for personal loans – whether to help you cope during a tough period and even for financing medical bills, banks will always have a record of how you have been managing your line of credit.

      Give that you have a poor credit history and at the same time you have to obtain a bank loan, do not give up yet, there’s still hope even when the only loan option you were considering goes poof. The below-listed ways will very well reverse the fate of your personal loans and help you get the emergency funding you urgently need.

      What You Need The Personal Loan For

      Having to deal with your loan application being rejected isn’t the end of your life. It simply is the end of a disappointing attempt to obtain a loan. Even as there are many alternatives to the banking institutions, there are choices available to you for the loan as well. As soon as you have clearly outlined the purpose of the personal loan, your Plan B will also become much clearer.

      For instance, when you require the personal loan for startup use, or maybe for kick-starting the start of a revolutionary personal project, it’s time you discovered the surprises of peer-to-peer lending plans, crowdfunding as well as the microloans issued by SPRING Singapore.

      Consider Other Funding Avenues Available

      When in urgent need of funding, bargaining for personal loans with banking organization can feel rather pointless. Large financial organizations as such always have a set of stringent practices and protocols to maintain, thus a no from them is simply that. Instead of fussing about it at the banking hall or even giving up all the same, possibly the answer is as easy as circling the set procedures.

      Do realize that banks are big financial institutions, and not the one and only. It is worth noting that there are many other avenues for funding that can give you the second chance such as the licensed moneylenders. Let’s look at pawn shops, for example; you could and un-hoard the luxury pre-90’s goods for you to get a loan. When you also require a more time for your repayment and you do not mind losing your ‘assets’, then go ahead and coax them to the willing buyers. However, in some cases, you may not have much control of the trend.

      When you would like an alternative that is on the same level as the banking institutions in terms of speedy approvals and high loan limits, you may think about shopping around for the right licensed moneylenders despite the many preconceived notions some people have. These lenders are more ready to accommodate your loan requirements.

      Furthermore, owing to the new effects that started last year, these legal moneylenders will no longer overprice their rates of interest to their borrowers. It was amended from a high of 20 percent per year to 4 percent each month.

      Request For A Loan But With Help

      Before you jump to the wrong conclusion, the idea here is not asking you to commit an identity theft. On the contrary, what is being suggested is that you enlist the assistance of somebody who trusts and knows you well enough to take out a personal credit on your behalf. If you are someone who used to take out credit in past, it’s likely that you were always asked to list your guarantor.

      In this case, it will be like you are getting the guarantor to do the borrowing. Likewise, you will, in addition, be putting the individual’s credit score in jeopardy, therefore be even more accountable for your personal loans as you would your own it. The loan is your, the more reason you need to be accountable.

      Show The Lenders The Proof Of Money

      It might happen that you are back in the money; however, the bank still puts the rejection stamp on the loan application since that one bad financial choice you made many years ago has left a lasting mark on your credit record (and let this be your learning point!). In spite of everything, no one likes the feeling of continuing risks even with the hope of beneficial returns.

      Before you despair, there are very many local and foreign banking institutions in Singapore available for you to choose from in case when your first choice of lender turns you down for a loan application. It still is possible that you to negotiate with the mortgage officer.

      One important thing for you to keep in mind before you go straight to your lender to give your case, make sure that you have armed yourself with the right documentation for instance bank statements and also the latest credit report for you to submit them to your potential lender to show them that you’ve been careful in servicing your debts.

      Conclusion

      Having a bad credit score can leave a lasting mark on your credit history. The solution to a bad credit rating is only doable by getting rid of the debt fast to help improve your credit score. Even then it is important for you to realize that all your credit practices are always recorded in this statement.

      Thus a low credit score can remain in your credit history for a long time and it will certainly have an impact on your future loan applications. Before you give up you need to realize that there are many other alternative sources of funding besides the banking institutions. Therefore shop around for the right lender who is ready to offer you a loan despite your poor credit rating.

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        Legal Moneylenders Will Not Resort To These Tricks

        By Kally / March 13, 2018

        Before taking out a personal loan issued by licensed moneylenders, it is important that you always confirm the legality of their business licenses. The Singapore Law Ministry always does monthly updates on their website on all the validity of licenses that have currently been issued to money lenders in Singapore. You should know who you are dealing with before taking up a personal loan.

        There have been many cases of unlicensed moneylenders pretend to be licensed moneylenders. Also, do remember to carry out thorough research and only to borrow from legal moneylenders in Singapore. In so doing you will be saving yourself lots of trouble. There are a number of ways that you can use in finding out the interest rates that moneylenders are offering their borrowers. And above all be careful you don’t fall victim to the unlicensed lenders.

        Here are some ways that you may use to help you differentiate licensed and unlicensed money lenders.

        Pretend To Entirely Work Online

        Licensed moneylenders will not pretend to wholly work online. Since they conform to the set rule they have a physical office that fits the details they have indicated online. Unlicensed lenders, however, will act as if they operate online.

        A genuine moneylender will maintain an office and some staff. After you have information from a lender it is recommended that you follow up with a call and also go to their office. Also as you are signing the loan agreement make sure that it’s done only at the money lender’s office

        Ask For Your Personal Information

        Legal moneylenders in Singapore will not remain with your NRIC and any other private documents like your passport, driving license, work permit, ATM card or even employment pass.

        There have been instances where unlicensed lenders who were offering lower rates of interest and in return their borrowers were expected to borrow them their password and ATM card for an entire week. It is possible that these lenders might use the ATM card for unlawful money lending actions. Assisting illegal lenders is a very serious offence.

        Charge Extremely High And Varying Interest

        Licensed moneylenders abide by the interest rates depending on the market rates. This ensures that the borrowers have some serenity because the rates of interest won’t be different at any time.

        Also, keep in mind that the Singaporean Registrar of money lenders clearly states what the interest rates charged ought to be for all the certified money lenders. Provided that the lender you pick is registered and that they use the set rate, they will not risk losing their license should they go against the rule. When you choose to work with an unlicensed lender be sure that their rates will change at any time.

        Loan sharks, in contrast, will not be firm on a contract because it’s a drawback for them. Also, don’t let the lender keep some of your personal papers like your identity card.

        Signing On Blank Paper

        Licensed Moneylenders in Singapore will not ask you to sign a blank Contract. Borrowers need to refer to the borrowing guide prior to taking up a personal loan from approved moneylenders. Normally lenders don’t request their borrowers to disclose their secret passwords. (ATM password, Singpass password, Bank account number etc)

        Remember that a loan agreement is the only document binding you and the money lender. Don’t under any conditions agree to sign any blank or even an incomplete document. The agreement needs to be done by a lawyer and must include all the things you talked about with your money lender.

        The personal loan period, interest rates, as well as all the other fees, need to be indicated clearly in the agreement. Ensure you understand all the things written in the agreement before you sign it. The agreement has to be signed by both of you. Make sure you retain with a copy of the agreement.

        Operating Undercover

        When you are working with a given money lender, confirm whether they are registered with the Singaporean law ministry’s website. All legal moneylenders in Singapore must be listed on the moneylender Registry.

        In so doing it is easy for the moneylender activities to be monitored by the ministry thus ensuring they follow the set regulations and rules. Any moneylender that goes against these laws definitely loses their license. Meaning that only honest, serious, and law-abiding money lenders will retain their registration standing over the years.

        Unlicensed lenders will use other registered lenders number and name to attract clients. And in reality, they do not have a physical office where they run their operations. Thus be cautious when dealing with a lender who doesn’t have an office even if the business number and name appear to be registered under the Singaporean Law Ministry.

        Solicit For Loans

        Certified moneylenders in Singapore do not send SMS or even call their borrowers repeatedly. They also do not persuade borrowers to take up loans with them. The legal money lenders will never pressure you into taking up a personal loan from them. In addition, these lenders do not move the loan money over to a borrower’s bank account without even seeing the necessary paper for loan processing.

        Engage In Telemarketing Or Send SMS

        When you come across a money lender who constantly sends you spam SMS as well as does telemarketing, then you need to simply drop that deal with them. Such lenders are not registered and in addition, they obviously are not sticking to the set money lending guidelines issued by the money lender Registrar.

        The stated regulations strictly forbid licensed money lenders from promoting any of their financial services via SMS or email. This is because of the actuality that many prospective customers have been deceived through fake SMS from unlicensed moneylenders.

        Conclusion

        It is important that you always confirm the legality of their business licenses before you take out a personal loan offered by money lenders. There have been some cases of unlicensed moneylenders pretending to be licensed moneylenders. Also, remember to carry out a thorough research and only to borrow from legal moneylenders.

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          How To Budget Yourself When You Are Starting Out To Work?

          By Kally / February 16, 2018

          Transitioning from the student-life into employment, most of the people become financially independent. You might by now have dependants who are counting on you financially, possibly elderly parents and younger siblings who don’t have their own income.

          There are student loans to repay quickly too. Although you might have landed your dream job, you could still get yourself in trouble when you aren’t adequately financially capable. It’s important to have money management skills.

          Manage Your Income

          Ensure you identify the disposable income (that is the portion of your salary that’s left after you’ve paid CPF and taxes, contribution or rent for the share of the household expenses), and ensure your monthly expenditure doesn’t exceed what’s left of your salary. Keep reading to find out more.

          Check Your Credit Usage And Spending

          It’s natural that you’d want to reward yourself for the hard work, however, keep it in perspective. When the newest must-have IT gadget or designer bag costs a huge amount of the monthly income, it could be best for you to rethink the idea of reward, particularly since these objects aren’t investments thus lose their value nearly immediately. A little self-control plus a strong desire to overindulge will only get you into trouble financially. Keep reading…..

          You’ve got a credit card and have eaten at classy restaurants and clothed in the best labels. You’ve bought a car using a moneylender’s personal loan. All looked rosy, but you start to feel the pressure – the credit card bills are fully paid and promptly. You start to pay only a minimum sum, the outstanding amounts keep growing as interest accumulate and overwhelm you. You’ve taken cash advances plus borrowing from your parents, however, the amounts keep snowballing. At last, your car is repossessed and you seek help to reorganize the debts to evade bankruptcy.

          Remember to spend what you can afford (but that doesn’t imply its ok to use all that you earn). Consider many aspects before you can borrow. Getting a payday loan, personal loan or credit line need to be the last resort since the costs you’ll incur and complications when you can’t honour your debt commitments.

          Learn To Work With A Budget

          A realistic way to manage your disposable wages and keeping track of your expenditure is to come up with a budget. An easy one could be planned in three steps:

          • Catalog all your living expenses (rent and meals, transport, etc.)
          • Choose the portion of your salary you wish to use on every item and strictly follow it.
          • Save the remainder of your pay. Begin first with practical amounts (about $200 a month) and aspire to save about 10% of the pay. And a lot more when you can.

          Remember to evaluate your budget periodically. You might find that the planned expense limits are unworkable: they might be low or high than they actually are.

          Change the distinction accordingly – assign more cash to prioritized items, remove unnecessary costs and ensure you save the remainder. Although you can’t save a lot to start with, having savings is an excellent habit to build. Little amounts will grow over time through compounding.

          Aim at saving 3-6 months’ worth of salary for emergencies and rainy days. Remember to also put aside some cash for infrequent expenses such as for buying birthday presents for close friends or your Mum, for example.

          Encourage yourself to improve next month through remembering your financial goals. It’s not at all too early to put away some cash for retirement, for parents’ expenses after they retire when they are looking up to you; a dream holiday or a dream flat.

          Are You New To Paying Taxes?

          Normally, you’ll get a notification by post or SMS from Singaporean Revenue Authority (IRAS) notifying you when you are needed or not expected to file your Tax Returns.

          A realistic way for you to manage your own finances is to ensure you understand what can be taxed and what isn’t, also to plan in advance to lessen the tax payable:

          Normally, all salary earned or derivative from the country can be charged income tax. This will include income you’ve earned from various sources like your employment, carrying out freelance work, offering private tuition services or even babysitting services, or your online business, etc.

          Starting 2-17 the Year of Assessment (YA), your personal tax returns rates will start from 0% (for a yearly chargeable salary of a total of $20,000) to 22% (for yearly chargeable wages in a surplus of $320,000). Personal tax returns rates in Singapore are progressive, that means the higher income earners will pay proportionately high taxes.

          There is a personal tax rebate of about 20% of payable tax to people who are residents in the country for YA2017. The amount was capped at $500 for each individual. You could further reduce the tax payable through claiming tax deductions like your course fees relief (this is for any classes leading to academic, vocational or professional qualification, or something that is relevant to the present employment), parent relief (to help support your aging parents who don’t have an annual income above $4,000), as well as deductions on any donations, etc.

          Planning In Advance

          Always make an effort to apply and learn basic cash management skills. Make a financial plan indicating your goals and the actions as well as strategies to help you reach them. Discover how disciplined investing and savings will help you reach your set goals thus you be financially ready with savings. Also, have an insurance policy in situations of emergencies. You are responsible for your own financial well-being.

          Staff Benefits

          Several workplaces make possible for benefits which permit you to reduce your expenses. Confirm with your employer whether you will get reduced dental and medical fees. You might be covered under a group insurance scheme as well. Be sure you understand these benefits and limitations of these insurance schemes.

          The benefits may not be moveable when you change employers, thus you need to consider obtaining some health insurance. In addition, consider taking life insurance (when you need financial security for your dependents) whilst you are still young.

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            Licensed Moneylender Interest Rates

            Taking out a loan in Singapore is very easy. This is because you do not have to get a loan only from banking institutions. There are many money lender singapore available within the country that you are now able to approach at any time you are in need of a loan. Nonetheless, it is especially important for you to make sure that your moneylender is accredited by Singapore’s Law Ministry.

            This is for the purpose of helping you avoid getting into more serious problems. In addition, it suggested that you take time to care the different interest rates and terms being offered by the money lenders. This way you will better able to choose the loans type that will meet your financial requirements.

            Do make sure that you at all times take out a loan from a licensed moneylender who lets you pay off your loan with ease. This means your money lender should not pressurize you in any way or even make sudden changes to the loan agreement.

            Before you can accept a loan and sign the loan contract, be certain you understand the terms the agreement requires of you. It is important for you to realize that once you have signed the contract, the contract is binding for you and your lender. And a failure of either of the party to honour their part of the agreement, you can be prosecuted by law.

            Therefore, ensure you make your repayments on time and should there be an issue that would make you not make your payments, always talk to your moneylender to adjust for you your repayment terms.

            Protection From MAS

            The government knows that there are a few licensed moneylenders who are capable of taking advantage of worried borrowers. This they do by charging them really high rates of interest on their loans. In order to ensure that the borrowers are protected the Singaporean government has put in place regulatory measures for the moneylenders to follow. Since the beginning of October 2015, it is illegal for authorized moneylenders to charge interest that is above 4% each month. This regulation applies to personal loans in spite of them being unsecured or secured.

            In situations whereby a borrower fails to make their loan payments on schedule, no licensed moneylender permitted to charge fees that exceed 4% for every month the loan amount is overdue. Simply put, all loans taken out from authorized moneylenders in Singapore are capped at a rate of 4% each month irrespective of the current situation. This ensures that no borrower is overcharged or is protected by law in case there is a breach of this regulatory law by a moneylender.

            How Interest Is Calculated

            The moneylender regulation requires that the rates of interests charged on the money taken out from a legal moneylender need to be calculated using the reducing balance method. In other words, this implies that the calculations of the rates of interest to charge on a moneylender personal loan has to be worked out using the principal outstanding amount after the paid figure of the months preceding has been deducted from the original loan amount issued in form of a loan.

            For example, let’s look at a situation whereby borrower X has taken out a loan amount of $20000 and to date has paid off $15000 during the preceding months. Therefore, the interest rate for the present month needs to be calculated on the outstanding $5000, which will now be treated as the current principal.

            In Singapore, it is against the law for a licensed moneylender to charge any interest on the remaining loan before it reaches its due date. This is one very significant aspect you need to think about as a borrower when you still have some overdue loan amount. For example, if an individual takes out a personal loan of $20000 from an accredited moneylender and yet he fails to repay his first instalment totalling $4000 on schedule, the moneylender is only allowed to charge interest on the $4000 amount and not the outstanding $16000. The reason for this is the due date for the outstanding $16000 amount has not yet reached. Therefore, this amount cannot draw any interest to itself as yet.

            In accordance with the Singaporean Law Ministry, the highest fee that may be charged on a borrower’s late payments is $60. In addition to this, the administrative fees that should be charged on a personal loan approved are not supposed to go over 10 percent of the loan amount.

            On the other hand, there is no rule that calls for licensed moneylenders in Singapore to charge borrowers a 4% interest on the loan money they have borrowed. This is a cap interest rate laid down by the Singaporean government to help protect the wellbeing of Singaporean borrowers.

            It is, as a result, the responsibility of the borrowers to make comparisons between several moneylenders as well as negotiate for a much lower interest rate for their loan.

            The wonderful news is that the competition among Singapore’s licensed moneylenders is high. For this reason, some moneylenders charge interests as low as 2 % for each month. Even then, low-interest rates need not be a reason for borrowers to shop for moneylender personal loans blindly. They also need to look at the other important factors before selecting the most fitting licensed moneylender. Some these other factors you need to carefully consider include things like the loan terms and conditions as well as whether the loan addresses your financial requirements.

            Conclusion

            Singaporeans are spoilt for choice when it comes to accessing loans. This is because banks are not the only ones that issue loans. There are many moneylenders available within the country that you are now able to approach at any time you are in need of a loan. In order to ensure that the borrowers are protected, the government has put in place regulatory measures for the moneylenders to follow since the beginning of October 2015. The moneylender regulation requires that the rates of interests charged on the money taken out from a legal moneylender need to be calculated using the reducing balance method.

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              What Are The Common Credit Sources In Singapore

              By Kally / January 9, 2018

              Singaporeans are spoilt for choice as far as credit sources are concerned. There are lots of different loan types currently available in the market. And as if that is not enough you can get a loan tailor-made for your different needs. Even then, all these credit sources can be confusing for anyone and even choose one can be difficult especially when you do not know the right one to pick.

              A Reminder About Credit

              This article is aimed at giving you the comparisons between the different credit sources for when you need them. For further information about personal loans, you can visit moneylenders near you for you to get accurate information thus make an informed choice.

              In Singapore the main credit sources are:

              • Bank Loans
              • Licensed Moneylenders
              • Pawn shops
              • Credit cards

              Bank Loans

              It’s a legitimate source of loans and is well regulated, as well as adheres to professional standards.

              When your credit score and paperwork are in order, the approval can be done within the same. It’s convenient when you have to remit money or receive it in a different currency.

              Their interest rates vary depending on how detailed the loan application is. For instance, when requesting for a car loan, your interest may be 1.8% to 2.2% each year. And when you request for the unspecified personal loan, your interest can be 5 to 8 percent.

              • Maximum Loan Amount

              Small loans are usually 4x your income. Bigger loans like car loans the loan amount limit depends on the Debt Servicing Ratio (DSR).

              Thus for a loan DSR of 30%, your monthly repayment on a loan cannot go above 30% of your earnings. This factor, together with your loan tenure determines the maximum loan amount you get.

              • Pros

              Quick approval, well-regulated service, and you may receive customized loans at lower rates. Banks also offer bigger loans than in the market.

              • Cons

              You require a regular income of around $30,000 annually to qualify for a bank loan.

              Failure to pay or late payments will have the lower your credit rating. This reduces the amount you may borrow and will affect future loans from every bank.

              Also, they allow debts increase interest for long periods. This will turn a large loan into lifelong repayments.

              Credit Cards

              These are issued by the banks and they act almost like small bank loans.

              They’re handy and give rewards.

              Credit cards have high interests around 24% yearly which can get even higher when you use the cash advance services.

              Actually, it’s better to utilize your cards as a means of payment, and not a good credit source.

              • Maximum Loan Amount

              The credit limit is generally 2-4 times your salary. Users with high credit scores and who always pay in full each month can request a higher credit limit.

              • Pros:

              Approval is instant. You get rewards and shopping discounts as well, earn frequent flier miles. They are suitable for online payments.

              • Cons:

              Their high interests make them a bad source of credit. In addition, the majority credit cards require you to be earning $25,000 and above each year; and even more for a foreigner. However, there are cards such as the Citi Clear Card intended for students and have a credit limit of $500 and does not require any minimum income but is a choice for the non-working young adults.

              Pawn Shops

              These deal with secured loans. To start with you give them something valuable, often gold or jewellery which is referred to as a pledge), and will act as collateral for your loan. The worth of your pledge is often determined by the pawn shop valuer. The determined amount is then given to you in form of a cash loan.

              Every time you make repayments, the shop will renew your pledge for an additional six months all this while still holding onto your valuable. Once your loan is fully repaid, with an interest of around 1.5% each month, you will be able to get your item back. When you discontinue making repayments, your pledge is sold off.

              • Maximum Loan Amount

              Depend on your pledge’s value. Shops may have their own limits, meaning they have a limited number of items they can take up at any given time.

              • Pros:

              These shops are helpful for retirees and the unemployed because they don’t need a minimum income. What’s more, the worst result of any unpaid loan you losing the pledge. This isn’t as risky as failing to pay bank loans.

              • Cons:

              Pawn shops only deal with smaller loans making it impossible to get a big loan from the shop. Furthermore, if you don’t have valuables to pledge, they are ineffective credit sources.

              Pawn shop loans can be costly when you are slow on repayments. If you will take over a year to get back your pledge, it may well be better you simply let it go.

              Licensed Moneylenders

              Singapore’s licensed moneylenders are a lot more flexible compared to banks. The background checks they run are quicker, and they offer mostly smaller loans. Licensed moneylenders in Singapore are regulated in accordance with Moneylenders Act. It is easy to identify them through their license number, often displayed at their shop’s front.

              • Maximum Loan Amount:

              Just like banks, the amount limit is 2-4 times your salary. However, a lot of licensed money lender singapore may loan you an amount less than that. It is advisable that you visit some to find out their highest offer.

              • Pros:

              Licensed moneylenders are lenient compared to banks. You will have to produce your pay slips and CPF statements, but you may be forgiven for a not-so-good financial record.

              Moneylenders have additional flexible payment plans such as bi-monthly in place of monthly, which may fit your cash flow requirements. Many are open for negotiations than banks, and especially regarding issues like late payments.

              • Cons:

              Their interest rates are high, making them the last option. Also, even with the licensing, the industry is less regulated compared to banks. Therefore it’s upon you to confirm whether the lender you are dealing with is certified, to ensure you are not working with a rogue moneylender.

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                Pros And Cons Of Consolidating Credit Card Debt

                By Kally / January 5, 2018

                Repaying all your debt needs to be a top priority as you work towards achieving a healthy financial life. If you find yourself unable to catch up on what is due and the debt to pay off first as you have multiple credit lines, you could consider consolidating your loans.

                By consolidating your debt you are able to combine multiple existing debts to a single one. This will give you better management and overview of your debt. In fact, the new debt offers you a lower interest compared to all your existing multiple debts. Debt consolidation can especially be useful if you intend to pay off the accumulated debts on the several credit cards you own. This is because the interests charged and late fees can add up together to quite a considerable amount which can be hard to manage.

                Once you take out a debt consolidation loan, there will be fixed instalments you will be expected to pay to your moneylender for an agreed on period of time. This is a useful approach you could consider taking If you are finding it hard to manage several credit card debts.

                However, this approach may not be suitable for everyone considering it would give borrowers another chance to use up their credit cards yet again. Therefore, before you jump in, read through the pros as well as the cons to confirm whether this approach of consolidating your debt consolidation will work for you.

                Why You Need To Consider Taking A Personal Loan To Consolidate Your Debts

                Lower Interest Rates Are Charged

                Enjoying lower interest may be the main reason for taking a debt consolidation plan. Considering credit card interests can run up to about 26% per annum, it is easy for you to get a loan from a licensed moneylender that has lower interest charges than this. Being charged high interests is probably the main reason why a lot of Singaporeans end up getting trapped in debt cycles. Thus getting a loan that offers lower interest rates will greatly decrease the total costs, therefore, getting you debt-free much faster.

                Makes Management Of Debt Easy

                Let’s assume that you have debt on your 3 credit cards and that each one is issued by different banks. It means you will have to deal with different payment cycles thus you may run the risk of getting charged late payment fees when you miss the payment dates.

                Therefore, having one debt consolidation loan means you just have a single payment deadline to adhere to for every month. This can be easy to manage when you use automatic transfer option from your account hence you avoid missing the set payment date.

                Monthly Fixed Payment Terms

                A Personal loan comes in monthly instalments whereby you will be expected to pay for a set time period. When you seriously want to become debt-free, monthly instalments can be motivating since you will be seeing yourself moving closer each month to finishing your debt. Also working with a fixed instalment amount each month means you are better able to manage your finances. This is because you will be apportioning out the money that has to go to the payment of debt every month.

                Cons Of A Debt Consolidating Loan

                It’s Possible You May Use Your Credit Cards Again

                The idea behind obtaining a personal loan for debt consolidation is for you to be able to repay the outstanding credit card debts hence avoid the being charged high interest rates. Once the debt is cleared it means your cards are like new – with no debt. Therefore if you are someone who has a hard time controlling their spending habits, it can easily put you in the same situation should you give into to the temptation and start using them again.

                Should this be the case for you, making use of a debt consolidation loan will only bring you more harm as you will only be drowning yourself deeper into debt? The most advisable thing for you to do in order for this approach to work is to cancel your credit cards once the debts have been cleared. This way you will not be able to add more debt through aimless credit card spending.

                Higher Monthly Installments

                Even though making use of a personal loan for debt consolidation of your card debts may cost you less, in the end, the monthly instalments can become higher than you are paying at this time. This is for the reason that credit card bills require you to make a minimum payment for each month.

                In contrast, a personal loan involves you paying the full instalment amount each month. Therefore if you already are having a hard time paying off your credit card debts, it may be wise for you to carefully consider your being able to commit to a fixed schedule for payments.

                You Might Not Save Much As You Desire

                Given that your credit card bills aren’t huge and you certainly know that you can for sure pay them off and within some months, getting a personal loan to pay them off may not be a good move for you because they usually need a minimum time to repay.

                In addition, you would have to pay an origination fee for your personal loan, which only adds on to your overall costs. When this occurs, you may consider using the balance transfer card with zero interest rate, instead of you applying for a new and additional loan.

                Conclusion

                Repaying all your debt needs to be a top priority and it will help you work toward achieving a healthy financial life. When you consolidate your debts, you are able to combine multiple existing debts to a single one. This will give you better management and overview of your debt.

                Debt consolidation can give you many benefits which include; lower interest, you end up with a single easy to manage payment deadline, and you get monthly instalments which can be motivating since you will be seeing yourself moving closer each month to finishing your debt.

                 

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