Getting It Right In Personal Loan Application

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.

Can Older Singaporeans Can Get A Loan Approved?

Like other countries worldwide, older Singaporeans at the age of 62 and above may find it difficult to get a personal loan because they no longer have regular paying jobs. Banks require assurance that the loan would be paid and if one does not have a job, they are reluctant to approve loan requests.

Fortunately, there are still ways for older Singaporeans to get a personal loan from financial institutions.

Here are five ways that can get you started on your loan application:

Offer a collateral for your loan

Banks require a guarantee when it comes to the client’s capacity to pay the loans regularly. If you are close to retirement age or in retirement age, using a collateral can boost your chances of attaining a personal loan.

A collateral can be a property the bank accepts to be of higher value than the loan amount you are requesting. This collateral can be stock investments, house titles and gold. Some adults tend to save up their gold because of their high value and it can be used as loan collateral when you are short of funds.

If you are going to use your fully paid home as a collateral, the process is called cash-out financing or reverse mortgage. Under this process, the Monetary Authority of Singapore’s directive states that banks can lend you to 50% of the current value of your property even if you do not meet certain income requirements such as the Total Debt Servicing Ratio.

When you have a collateral given to the bank, you are charged with a lower interest rate once you get your loan approved. Currently, cash-out financing interest rate in Singapore is around 1.6% per annum.

If you are unable to pay your collateral, the bank would take your collateral as payment. At the same time, if you manage to pay off your loan, you can get your collateral back.

Collateral loans are not available in all banks so double check with the bank you wish to loan from if they can process your collateral loans.

Ask a guarantor to help you

A guarantor is simply a person that would agree to pay for your loan if you are unable to do so. In Singapore, a guarantor must be 21 years old and has an income level that would enable them to pay your loan. If the personal loan amount is high, then the guarantor’s income level must be higher than that.

Usually, guarantors can be your family and friends. However, there are cases where guarantors would decline paying on your behalf if you failed to pay the loan. Before you ask someone to stand as your guarantor, you should draft a contract with them to set the guidelines on how the loan will be handled if the guarantor steps in.

Getting a guarantor for personal loans is perfect for those who have no or poor credit history. You can check out your credit history and your guarantor by requesting it with the Credit Bureau Singapore.

Get a short-term loan

The quicker you pay your loans, the better and if you are applying for a personal loan, accepting a shorter loan term can get your request approved.

Home loans are usually the loans that have short-term loan tenures. Applying for home loans are compulsory nowadays if you wish to purchase real estate even if you have the funds to pay it in full. As a result, repayments are not very difficult to manage if one plans on how to pay for it and it can be paid quickly.

When you shorten the loan tenure, you would need to pay higher monthly repayments. Fortunately, you can minimize the impact of higher monthly repayments by refinancing, paying higher EMIs (equated monthly instalment), calculating mortgage fees, and regulating your funds.

Before you take this option, make sure you would be able to handle the higher monthly dues to prevent mishaps during payments.

Get a Co-Borrower

Usually, borrowing money from the bank can be quite tedious since you have to work with a time period on how long the payment should be done. You can also borrow money up to a certain age, which can be difficult if you have already retired. In order to bypass this problem, you can pick a younger co-borrower to stand with you when borrowing funds.

If you have a co-borrower, the bank would average out your ages and see if you can pay the money you borrowed. Usually, younger borrowers are preferred by banks since they still have a regular source of income.

When you get approved for your personal loan make sure you plan out with your co-borrower on how it can be paid as soon as possible.

Check out offers from credit unions and moneylender companies

If you do not wish to get a personal loan from a bank, non-banking institutions like credit unions and moneylender companies are available. Moneylender companies and credit unions tend to be flexible when it comes to their loan payment plans and would not focus much on the person’s age and credit history. If you have a good credit history, you can approach them to get a loan.

However, not all credit unions and moneylender companies are accredited. Before you approach these non-financial institutions, do your research. In Singapore, the list of accredited credit unions is listed on the website of Singapore National Cooperative Foundation. Licensed moneylender firms can be viewed at the website of the Singaporean Ministry of Law.

Final Thoughts

When you reach retirement age, it is time for you to take things slow and relax. However, since you need to spend to remain comfortable, you will end up spending your savings if you are not careful. Taking a personal loan can lessen the burden somewhat, but your age might be an issue.

With the help of these tips and some careful planning, you can still get a personal loan even if you already retired and pay it off as easily.

Good luck!

How Licensed Money Lenders Aid You In Business

As a borrower, you may have to get in touch with your business moneylender. Private business advances and gear loan advances are rather simple to get. This is business lending rules are often not similar to private lending.

When you look for a business loan to manage your business. You will need to consider working with a licensed lender. One that is ready to work closely with your company. As well as help raise the funds you require. The lender should look at your business financial needs.

This way they can offer you a stable set up with many different funding choices.

Some Types Of Business Funding Accessible

Credit extensions

This can be used for getting new equipment. It can also finance your working capital and big and small purchases. You need to borrow loans that have flexible terms and fixed interests.

Letters of Credit

They promote exchange and decreases the importer’s country risk. They also reduce the issuing lender risk. Often time the rotating credit extension bode well than one advance.

More so when deciding on whether to purchase important things. Or even to cover income or pay for improvements. This gives you access to an extension of the rotating credit. That comes with flexible repayment terms and options.

Some Critical Features Of The Loans Offered By Licensed Moneylenders:

  1. In most cases, accredited lenders are experts in personal financing. This also includes contract organizations, government lenders, etc. The conditions and terms of the loan can vary for each lender. You need to audit and look at different crucial factors. These include things like the moneylender’s financing charge. Also, the prepayment penalties charged. Also, consider the APR, make arrangements that way you can choose the right lender. When you are not sure about finding a reliable accredited moneylender. Doing a web search is among the routes to locate them.
  2. You will benefit from these loans regardless of your business standing. That is your profits and the rating. This loan may be offered mostly based on the appraisal of the pledged property.
  3. The loan is an instant advance. You can access it in times of financial emergencies. It may be used when business owners are liquidating and abandonment.

Types Of Business Financing

Equipment Financing

It can involve transport, assembling, large equipment, yacht. This also includes corporate expansion funding.

Asset Based Lending

This is a non-customary option for resource growing companies. It helps them grow their acquiring limit.

Government Contract Financing

Offering a large variety of budgetary solutions for companies. More so companies that perform specialized assembling. It can also be for administrations of any construction.

As you search for business loans. It is always advisable to work with one moneylender. This is rather than having several of them at the same time. In so doing you will save large amounts of charges in the end. The key thing when improving your business status. Therefore consider utilizing the loan options in the market.

Accredited moneylenders offer instant business loan for capital. This will, however, depend on the asset presented as security. Loans offered by legal lenders might be costly and could higher interests. This is when you compare it to different kinds of loans. More so those done using your salary records.

Offering borrowers large loan amounts with no security. This can be a huge risk for the moneylenders. Unlike the banks and different traditional loaning institutions. The legal moneylenders do not consider a borrower’s income. They also do not look at their record, while offering loans. The moneylenders provide loans after evaluating assets used as security. Thus a borrower’s wage and resources do not get considered here.

Factors To Consider As You Decide On Licensed Moneylender Loans

  1. As you decide on licensed lender loans. It is important to have the repayment plan. This is because first, the loans use your property as security. Furthermore, they could come with rather high personal loan charges. You need to take specific prudent steps in settling these loans. For instance, you use the personal loan to settle earlier obligations. This could be loans that attract high funding costs. Settling your past debts will adequately improve your credit rating. This makes it an advantageous option for you when you require it.
  2. At this point, you need to consider the loan type. This depends on your intention of getting the loan amount. In so doing you will be able to decide on a moneylender. This could depend on your financial needs.

Different licensed money lenders will offer varying loan conditions and terms. For this reason, it is important that you carry out thorough research. This will give you a feel for the various loan terms currently offered by different lenders. Then from that, you can choose the lender that is best for your business needs.

In those situations when you realize that you do not have enough information. More so regarding the lending industry. You may even consider visiting a licensed lender in Singapore. You can also seek the advice from a financial counsellor. Large companies and privately-owned companies in most instances regularly use this support. In particular in making land bargains.

Also known as “Private Cash Loans.” These payments can be a significant source of funding. Especially for individuals who want to buy land. Yet they require funds on temporary terms. Another thing to think about is the ease of accessing the loan.

Oftentimes, when you find a good speculation property. You will need to act fast. Your ability to get funding fast will have a major effect on the payment arrangement. Traditional personal loans might take around 30 days even more.

Then at times, it is rather long. Accredited moneylender loans can help you purchase land. Particularly when you do not have the funds. It can also be used by individuals with bad FICO scores. This will make it possible for you to buy property and even benefit from it.

Money Problems You Can Solve With A Personal Loan

Normally, unexpected costs should be covered using an emergency fund. However, even a large amount of savings will not protect you. Especially from all financial pitfalls that life will throw your way. Under the right circumstances, using the personal loan will prove helpful. , is because it will offer you the chance to handle the financial situation.

Having some extra funds right now will go along way. You will be able to restructure your debts. You can also cover any urgent expenses. Or even make investments that have good returns for many years to come. The good thing about personal loans is their schedule. You already know when it will be repaid in full. You also know how much it will cost you.

Personal loans will prove to be very handy at all times. That is provided you are aware of the times to make use of one. As well as where you can source the loan from. Working as a trusted and reliable moneylender is the best source. When it comes to the purpose of your personal loan.

Below are some instances when a personal loan is of great help.

Meeting Unexpected Medical Bills

Even when you have medical policies that you have taken. At times the treatment costs might go beyond the amount covered. For instance, some unexpected and sudden emergencies might require huge amounts. Realize that insurance policies may not cover many cost heads.

When you have problems handling some of these medical expenses. You could consider making use of a personal loan. This is before you choose to pay with the credit cards. The personal loans are much easier for you to manage. Also, they will not push you further into debts like the credit cards do.

Growing Your Side Hustle

Often times small businesses will require additional capital. The extra capital is aimed at maintaining the necessary cash flow. In addition, it is used for the purposes of expanding the business.

Legal moneylenders do provide loans to small businesses. These loans often come at excellent rates of interest, for purposes of expansion. Thus, It is wise to talk about your requirements in detail with your lender. Then ensure that you choose a loan that will suit your need. The loan should offer you a repayment schedule that is comfortable for you.

Additionally, you also may look for a loan for a project to renovate your home. You can also use it to purchase some high-end electronic devices etc. Opting to borrow money should at all times, be a judicious decision. Thus you need to give the option careful consideration. Always remember that borrowing should not be frivolous.

Invest in Yourself

Some people in Singapore will use the personal loans to spend on themselves. For example, you could use a personal loan for purposes of paying for training. For many workers in Singapore, training, a certification, or another kind of education is crucial. This may be an opportunity for them to greatly enhance their earning power. However, the first costs might be holding them back.

Using a personal loan could be an affordable method to finance this investment. At the same time, it will give a boost to borrower’s career. If you are seriously considering such use for a personal loan. Ensure that you do your research. This will make sure that you will have good returns on your investments.

Even then realize that there is some risk involved. But at times you will have to take the chance. Even then, such an investment in yourself can see you landing a new job. Or it could lead to a salary increment. 

Improve Bad Credit

Personal loans may be a good strategy to improve your credit reports. This can eventually help grow your credit scores. Credit scoring will often consider the mix of account of your credit accounts. When you just have revolving accounts such as credit cards listed in your report. Therefore, opening the instalment account such as personal loan might boost your score.

When paying off credit card debt use of personal loans is even better. Getting credit card outstanding balances down can lower the utilization ratio down. This measures the segment of credit available that you have borrowed.

When you take out personal loans to settle balances and not close the credit cards. You will lower this ratio and may see the credit score greatly improve.

Settling High-Interest Credit Card Debts

Although credit cards will offer you instant cash. However, their interests for repayment are the highest. At times, the interest may get to 24 percent high. When you have lots of accumulated credit card debts.

Taking out a personal loan to help close it will be a grant idea. This is because the interests charged by the moneylender will be a lot lesser. This is when you compare the rates on that credit card companies will charge on you.

Knowing When to Acquire a Personal Loan

Taking out a personal loan might be the right move. However, only smart as when you are securing one. It is important that you always ensure that you are getting a loan offered by a reputable lender. Be on the lookout for indications of a scam. These can include things like being promised a loan. That is regardless of your credit score. Or when a lender asks you to make upfront fees.

Additionally, make sure that you are taking into account all other options. Although in those cases mentioned above personal loans are worth considering. Debts — that includes a personal loan — is not a solution to all your money problem. It is important for you to realize this. Every time you purchase items on credit, you end up paying more for it. Though for most people they prefer to get a discount instead of paying a premium.

In Conclusion

Although, emergency costs should be settled using an emergency fund. However, under the right circumstances, a personal loan is very helpful. This is because it offers the chance for you to sort out your financial situation. And above all always work with a licensed moneylender.


Why It Is Crucial To Have Emergency Funds

Many people in Singapore fail to plan for their future. Having financial security is crucial for everyone. Having emergency funds can help you have peace of mind. This is because you can look forward to the future with no worries so you do not feel unprepared for any unforeseen expenses.

Emergency funds are important to your family’s financial security. Through finding out more about this fund will help people better prepare. They will also start saving for those who have not done so already.

The What And Why For The Fund

This type of fund is basically money that has been put aside. The aim is to later cover life’s unforeseen events. The emergency fund will let you live for several months in case of a job loss. Or when unexpected event crops up that may cost you huge amounts to cover.

Consider it to be like an insurance policy. Instead of paying monthly premiums to insurance companies. You are, however, are putting aside some money for yourself that can be used at a later date. This money can then you and your family. This money can come in handy when unforeseen events occur.

Even then there are options available for you. To help you out an alternative would be taking out a personal loan. You could also use the payday loan from legal moneylenders in Singapore. Although this direction might not be the most ideal. But it truly will go along way. The loan amount will help you deal with your current issue. Thus it will get solved a lot faster as compared to the other options like the banks.

Deciding on an Amount

Financial experts and most banks advise that you need to save some cash. This should be about 3 months the value of your salary towards your emergency fund. In so doing, in case you lose your job, you will have sufficient cash to cope. This should sustain you for several months before you could find another job.

Even then, based on your income level and preferences, the fund amount will vary. First, you will need to calculate your monthly expenses to know the exact figure. Work out the amount you spend every month on rent or mortgage. Also calculate what you spend on groceries, vehicle expenses, and utility bills.

When you have some insurance policies which will cover you. Especially when you are facing unexpected emergencies. Then you can manage with a bare minimum. Even when you have family that can support you during the financial downtime.

It is advisable that everyone makes a point to set aside some money. This should be intended for the emergency funds. This will help you later for the unforeseen expenses.

How To Build Your Emergency Fund

There are no shortcuts when it comes to saving up for your emergency fund. This boils down to several factors. These are individual discipline, your financial status, and your determination too. An emergency fund could take a rather long time to grow. That is when your monthly wages are acceptable.

Yet your monthly expenses are rather high. Bearing that in mind, realize that everyone has got to start from somewhere. Therefore, it is important to start growing the fund. This is because it is difficult to predict any emergency events.

Given that for example, that you earn a set salary of S$4,000 each month. However, your liabilities use up a total of S$3,000. This will leave you with an amount of about S$1000 every month. This is what you is to go towards the emergency fund.

Based on this for you to have 6 months’ the sum of your expenses to grow the emergency fund. Then it means that you need a minimum of S$18,000. Thus you will need 18 months of savings to grow it by putting in S$1000 each month.

What Your Emergency Fund Should Cover

Job-Related Move

When a job opportunity comes your way. You will not want to have to turn it down. Simply because you will not afford the move from one state or city to another.

Medical Bills

Most of the people in Singapore are covered by MediShield. Thus they are able to utilize Medisave. However, you may have to take a personal loan offered by moneylenders. This will help you pay off the expensive medical bills. This mostly depends on how long you stay, the conditions, and class of the ward. With all that is is easy to drain off all your savings.

Home Renovations

There are some home renovations cannot wait. Broken water heaters, leaky roofs, old cooling and heating systems that do not work. Some of the home repairs may not be covered by insurance. Thus that leaves the responsibility for them to you.

Also, most Singaporeans carry high deductibles for their policies. Thus even though you hold insurance, it is a good idea that you come up with money for the essential repairs.

Job Loss

Most experts often recommend this as the first reason to have an emergency fund. Although you may lose your source of income, the bills still need to get paid. That includes mortgage/rent, food, utilities, car payments, and the credit cards minimum due amounts.

Bottom Line

An individual and family need to be prepared for the for the unexpected. Home repairs, Medical emergencies, retirement and auto repairs are some reasons for having some emergency fund. Most people will want to have sufficient savings at retirement, to live comfortably.

Having Social Security does not guarantee that you will have enough funds to enjoy retirement. But, when you start making preparation now. Then you get to look forward to your retirement.

An emergency fund is important for your health. Having to live in fear that you are not secure for the future. it will only cause you unnecessary stress. Getting stress may lead to numerous health issues. Additionally, health issues might lead to loss of income.

Hence, an emergency fund will help you eliminate this stress. This will allow you to lead a more comfortable and peaceful life.

This Is What You Should Do During A Financial Emergency

At times emergencies are beyond your control. It could be car accidents, health crisis or your home gets damaged in a fire. However, at times it is easy to prevent when you choose to be proactive. When you are faced with an emergency. There are some things you could do to help prevent it from wrecking your finances.

A financial emergency can easily make you lose your perspective. This will cause making poor decisions. That will have long-term effects on your finances. However, when you follow the tips listed below. You will minimize the damage to your finances. This will also help you get through the emergency fast and pain-free.

Do Not Panic

In a financial emergency, the first to do is- not to panic. This may be hard to do. Even the try and face the difficulty with no much fear. Keep calm and rationally think about ways to deal with the situation.

Do realize that any decision you will make can affect your future. When you are not certain on what to do. Seek counsel from someone more experienced. This will help make the best possible decisions.

Find Out The Main Cause Of The Problem

Going through a financial emergency can be stressful. The stress can affect your ability to assess the condition logically. Thus the first thing to do is calm down. From there try to look for the cause of your problem. After you find out the origin of the financial emergency. It will be easy for you to get a lasting solution to your problem.

Cut your Spending

Certainly, if the emergency causes a big dent in your finances. It means you may have to cut on your spending. Do this as much as you possibly can until you recover. At this point, having a good working budget will come in handy.

Utilize the budget to help prioritize your spending. This will also help you stop spending on what you do not need. This is will also help in the recovery process.

Look For Ways To Make Extra Cash

This is amongst the best strategy you can use to help repay emergency bills. It will also help you as you try to get rid of debt. Earning some extra cash money speeds up the time you would take to settle any debt. It also lets you cope for a much shorter period with emergency expenses. This is when you compare when you have to manage without the extra income.

Get a Loan

When you are sure that the problem is short-lived. You may consider making use of a loan. This would be for short term. It is easy to access a personal loan in Singapore from legal moneylenders. The type of loan that you need to take will depend on the situation. It will also be influenced by the amount of money you require.

Of importance, your capability to repay will play a role. For example, for a salaried professional, taking out a payday loan will be convenient. When you prefer the unsecured loan that has a repayment period of a year. Then you may consider making use of a personal loan.

Prioritize Your Expenses

When facing a cash crunch, make every penny go a long way. The point here is that you try and save money as much as possible. To achieve this, you will have to prioritize your expenses. You could consider differentiating between ‘wants’ and ‘needs’.

Omit any unnecessary and not-so-important expenditure. Be sure to only spend when it is very necessary. For example, to pay utility bills is very necessary. However, you could delay your yearly trip for a while. In following these easy steps you will be able to deal with any financial emergencies.

Contact Your Lenders

When you realize that you might have a problem paying your bills. This is owing to the financial emergency. It is advisable that you immediately contact your moneylender and service providers.

Most Singaporeans have a trend of putting this off. This then results in lots of late fees. Eventually, you start getting nasty calls from moneylenders. If you get proactive, often times you come up with suitable payment options. These solutions can help you prevent a lot of stress, for instance.

A few credit card companies are ready to put off payments for a while. They can also help you draw up alternative payment solutions. There are programs established by utility companies. These are intended for borrowers who have trouble managing their bills.

Contact them to get more information about the options available. Keep in mind not to put these off when you need assistance. The sooner you tell your moneylenders the better.

How To Prevent a Financial Emergency

You might face a financial crisis at any time in life. This will also cost you lots of money. However, most Singaporeans are not prepared financially. Thus may not know where to start when it comes. Therefore, to help you minimize and avoid a financial crisis before it occurs. To get you prepared for ways to prevent a financial emergency. Below are some tips:

  • Have an Emergency Fund – Having some money saved up for an emergency. It will mean that there are less panic and stress. You are then able to pay for it and get on with your life.
  • Ensure that you are financially prepared for an emergency before it occurs.
  • Be debt-free – By having lots of debt, emergency expenses might send your finances out of control. However, when you are debt free. You will not experience the stress of dealing with debt collectors. In addition to handling a financial
  • Have Insurance – It is worth noting that insurance could be expensive. However, it will be is less expensive for you than when you do not have At the very least, make certain that you hold health insurance. But, life insurance, home insurance, car insurance, and maybe disability are needed. This will help you head off some life-changing emergency expense.

3 Types Of Lenders In Singapore: What Works For You

Singaporeans are spoilt for choice.

This is when it comes to accessing loans in the market. The options are endless. On the other side, not all these choices are ideal. By picking the wrong moneylender, and you might end up deeper in debt. More than you would have suspected.

Below are differences between these lenders:

You can legally borrow from 3 types of lenders in Singapore. Their practices will vary and these lenders cater for different borrowers:

Pawn Shops

Pawn shops usually let you “pledge” a valuable item in exchange for loans.

Once you present valuables to pawn shops (e.g. a gold watch). Pawn shops will lend you some money. The amount ranges from 60 to 80% of the value of your item. Therefore, when you are to pledge a watch worth $ 9,000. You might get a loan amount of $72,000.

Pledge is the valuable item you present to the pawn shop dealer. Once you receive the loan, you get 6 months you to pay back the whole loan and interest. Failure to that, your valuable item will be auctioned. Typically interest rates on this loan are 1 percent for the initial month. Subsequent months will attract 1.5% interest. The rates are lower compared to the normal credit card, that charges 2% a month.

Realize that these repayments amounts are not fixed. For instance, you may decide to repay $50 for one month. You could also pay $700 for the following month. Thereafter, $400 for the month after, etc. Whenever you make a remittance, the auctioning of the pledge will be postponed by six months.

Note: Do not use pawn shops as a “quick sell” place for watches, jewellery, and other valuables. Usually, you will get less cash from pawn shops. That is more than you might get when you sell it to a watch dealer or goldsmith, etc.


What you need to acquire a loan is a pledge and Identification (your IC). Income, outstanding loans, and credit history are not required.

Failure to repay your loan, you only lose your pledge. That is not the same for personal loans and credit card line. This debt only keeps compounding when you do not repay.


A rate of 1.5% each month, maybe lower compared to credit cards. It still very high when you compare it to personal loans offered by banks.

These lenders offer a single loan. Thus no revolving credit products.

The loan you may borrow depends on the value of the pledge.

You should own an item worth being pawned for you to access a loan.


Banks the popular sources of credit. They widely can be divided into private banks and retail banks.

Retail banks provide “mass market” type of loans. These come in forms of business loans, credit cards, car loans, personal etc. Their range of products is too big. These lenders are able to fulfill most borrowers needs.

The second type of bank, the private banks, provide primarily to high net-worth borrowers. These lenders provide unique loan choice when you have valuable security. For instance, given that you own an extensive fine wines collection.(the private bank can conduct valuation exercise for it). They then can offer you the loan using your wine collection. This will act as the collateral.

Pros Of Borrowing From the Banks

Banking institutions think highly of their reputation. Thus they are subject to strict industry regulations. They also keenly adhere to government policing.

Most banks may offer you revolving credit products. These they do use loan products like the credit cards. By using revolving credit, will require that you make a new loan application. That is each time you wish to take out a loan.

They can offer bigger loan amounts compared to other lenders listed.

Banking institutions might charge lower rates. That is when you compare them to other credit sources listed here. This is especially for specific loans like the education loans and home loans.

Making repayments to banks is normally more convenient. The repayment methods are many. You could do so from the bank’s ATM, online, by mail and through its branches. The other lending options listed here will often require that you make remittances in person.


Banks follow strict standards for their borrowers. These include things like Debt Servicing Ratios- DSRs. Additionally, they use minimum salary requirements. This means not many Singaporeans will qualify for bank loans.

When you fail to pay off banks promptly. It might damage your records with all the other banks. This could even include other financial institutions. When you failed to repay bank loans before. You will not have the chance to borrow from banks at all.

The private banks are generally not accessible to borrowers without several extra million dollars.

Licensed Moneylender

This type of lender often times deals in small loans. That is loan amounts of up to $10,000. Though some licensed lender might be ready to give larger loans. This is however for few clients. Loans offered are either secured or unsecured.

Accredited moneylenders transact individually with their customers. Although these lenders also assess your income and credit history. They may offer different interest rates and the loan size based on the own judgment. It is for this reason, it is hard to make general statements regarding legal moneylenders.

Owing to the high risk involved in the money lending business. Licensed moneylenders in Singapore will charge high interests. These rates depend on a borrowers income:

Most legal moneylenders need fixed monthly remittances. However, these terms can be negotiated.


These are providers of last resort. These lenders can give you loans even after banks have rejected your loan request.


They have in the past ugly incidents that engaged services of debt collection bureaus. There has been alleged harassment of borrowers. Banks are big enough to take in bad debt. Yet they generally care much about their reputation. Thus they will never result in using such strategies. Not the case for moneylenders. Few lender charge interests that are almost exorbitant. Therefore it is important that you do your own research in getting the best service from the best moneylenders in Singapore.

How To Manage Debt Consolidation

Following the economic challenges over the past few years. In addition to nearing government shutdown. Most Singaporeans have moved from having manageable debt. At present, it is gone to minimum unmanageable debt. Debt for some has spun out of control. Having a manageable debt means that a borrower is able to repay their debt. At the same time, they remain financially solvent.

Oversplurging on Credit Cards

Sadly, most Singaporeans with debt issues depend on credit cards. They also choose to use short-term loans, disregarding the existing issues. In some instances, they simply are not able to pay off their bills. This is without using these means. However, this leads to interest repayments that suddenly get out of control.

To most, this spells a financial trap which ends badly. Thus they find themselves facing unmanageable debt. However, when you look for a solution for your financial problems. Yet, fail to address the main causes of debt. It will only result in your getting into more debt in future. This comes about because when debts are merged into one loan.

All credit cards, as well as other newly accessible financial options, will be leveraged again. This starts the very process that brought about your seeking help. You will find yourself facing debt all over again.

Professional Consolidation Loan

Professional consolidation services are one of many reasons why many seek this option. This loan product not only offers the necessary resources. It offers help for borrowers to get rid of debt. More importantly, this option will help you address the main cause of the first debt. It is important for you to realize that all these services are not equal. Different providers will offer many varying service terms.

When you choose to use online resources to review the best debt consolidation loan. It will provide you with a complete list of the offers from different companies. It will also show the products they do not offer. It will include how a borrower should go about the process.

However, realize that there is a lot involved in debt management. This is beyond review companies and what companies offer. Each moneylender may have particular areas that make them stand out. This includes the methods they apply to help borrowers manage debt.

Above all, moneylenders have best practices that they should follow. As you review and consider the companies, ensure that you thoroughly examine each. At the same time stay away from any lender that will promise instant results.

The best place for you to start is asking yourself these three questions:

Are You Committing Assets To Consolidate Your Debt?

This may be the most crucial consideration. Like it can happen in some situations. It is possible for you to provide your home to consolidate debt. However, you should not take this step lightly. Although the interests are relatively low at present. However, using your home to guarantee unsecured debt is a risky move.

A responsible debt consolidation lender will only bring this option as the last resort. They will also ensure you keep at least 20 percent equity for your home. This is after you have taken out a credit line or even a second mortgage. At the same time, you still have to be open with your money lender. The intention is to ensure you do not incur penalties. Additionally, you do not incur unexpected fees.

Is The Lender Presenting Debt Consolidation As The Cure-All?

When a lender does this, then it is best you avoid them. Consolidating your debt involves a lot more than just merging all your debt. This is also about evaluating the grounds for your debt. It also has to do with getting counselling. It involves helping in understanding ways to avoid situations that led to the initial debt. Therefore, be careful with the lender you choose to work with.

Is The Moneylender Charging Unreasonable Fees?

Most providers do not anything different. That is from what the average person cannot do. However, they have the experience and connections. This is what allows their borrowers to merge debt more effectively. They at times also offer them better rates.

Keeping this in mind, the total rates charged by the lenders need to be manageable. They can come in the form of interest charged on personal loans. Or they can be upfront fees. Importantly, take a keen note of the total fees and interests of the consolidation loan. It should not exceed the overall interest of all debts you want to consolidate.

For instance, $10,000 credit card debt accruing 18% interest. When repaid using the minimum payments each month. It will take you 28 years and 6 months to repay. Within that period you will have paid $14,423.30 total in interest. This will bring your sum of principal plus interests to $24,423.30. The combination of payments, fees, and personal loan interest should not exceed this.

Actually, often times this figure needs to be substantially less. Consolidating the same $10,000 debt attracting 10%. Having a monthly amount of $250 paid for your loan. This will lead to the whole debt getting repaid in only over 4 years. And you only pay about $2,200 in interests. This will save you over $12,000. This is what you need to expect from any suitable consolidations company.


The above-mentioned considerations are 3 very important questions. Especially as you look into any type of loan for debt consolidation. However, there are more. Although there are some unscrupulous lenders in the market. Most of the moneylenders are transparent and dependable. Most will offer you access to bargaining and negotiation. This is one thing that most borrowers might not know about. Also, the ideal debt consultant will offer borrowers free consultation. This allows you to take concerns and any questions concerning their recommendations to your lender. You can also check with a certified financial advisor. In so doing you can get a sound second opinion.

Growing and maintaining your credit is not easy. However, managing excessive credit is equally tough. Through careful consideration of the options will help you make an informed decision. You will get to maintain a healthy credit. At the same time, you will to your finances will stay in order.

What Does It Mean To Have “Bad Credit”?

When lenders talk about borrowers with “bad credit”. What the actually mean is borrowers with high credit risk. Or, this means that a low credit rating signifies a bad credit. ( The credit score is the number that lenders use. This is for measuring the level of risk a borrower might be).

Normally these individuals have a bad credit score for different reasons. This could be that they owe a large loan amount. It can also be that these borrowers did not manage to pay promptly in the past.

Difficulty In Getting Loans

Owing to this, these borrowers will have a more difficult time to get loans. This will mean they might miss opportunities to get the suitable loans available. This is because their loan choices are limited. This is because of their bad credit record. This will often affect the perception of money lenders. This will make them question the borrower’s ability to pay off a loan.

Even then, It is very important for you to manage your credit rating. The reason for this is because it will affect impact your being able to get personal loans. Without having a good credit rating. This will mean your chances of qualifying for a loan are much reduced.

It is for this reason why you should protect your credit score. This you can do by making on-time payments. You should also avoid any situations that might seriously harm your credit well-being.

Unavoidable Financial Situations

Unfortunately, it so happens that not many Singaporeans can to do this. This is because of a number of unavoidable situations they face in life. For example, medical emergencies or being retrenched can cause you great concerns. This is especially as far as your finances are concerns.

When such things occur, you will have an urgent need to get some extra cash. This amount is meant to help you manage your personal expenditure. But by having bad credit can prove to be a challenge. This whole process of acquiring a personal loan can be tough. This when you wish to get the loan from licensed moneylenders and banks in Singapore.

Possible To Get A Loan?

Even when you are faced with such a tough situation. Do not give up as yet. Realize that it is possible for you to access a loan. Even for someone who has bad credit. The important thing for you to do is start rebuilding the credit status. This will help you get in control of your own finances.

Actually, there are many different types of loans available for individuals with bad credit. Therefore, be sure to do lots of research work before you request for a loan. This will help ensure that you locate the lending option for you.

The one major disadvantage of this type of loans is their rates of interest. This is because they are normally very high. That when you compare them to the normal bank loans. This means the loans offered to borrowers with healthy credit scores charge lower interest. Even then, these loans have some positives as well.

For instance, few moneylenders offer borrowers with low credit loans. This opportunity allows them to work alongside a co-signer. This needs to be someone who has a healthy credit record. In so doing, the borrowers are in a position to access a loan. This loan will often come with a lower rate of interest. This is much lower than what they can get with no cosigner.

Also, when your credit rating is very low such that you do not qualify for an unsecured loan. There are a number of moneylenders who might offer you the secured loan. Under such a situation, you could consider using your car, for instance. This will help you secure this loan.

Be Aware

Be careful when you are seeking a loan with bad credit. At times you might find you are trapped in bad credit scam. Be on the lookout for the following:

  • Money lenders who will pressure into making a deal. This is especially before you get to consider all the options available;
  • Lenders who will ask for money for you to fill a loan request (that is illegal);
  • Lending companies that pressure you to share your personal information. This is especially those that insist you do so over the phone;
  • Finally, always ensure that you are dealing with a legal and licensed moneylender.

Things To Consider Before You Apply For Loans With Bad Credit

You will need to keep the below-listed guidelines in mind. This particularly when you would like to get a loan:

You can start off by analyzing how you got into the situation. Do this ahead of actually applying for a new personal loan. By doing this it will help you in finding a lasting situation. This is because you avoid making the same mistakes. More so after you have taken this new loan.

By looking into the bad credit condition you get to analyze it. You can also see whether you are able to settle the new loan.

This will allow you to ensure that the new loan does not aggravate your score. Considering it is is already in a bad state.

You constantly need to take small steps towards enhancing your creditworthiness. This is essential to ensure that the creditworthiness is growing. This is because lenders will confirm if you actually are making attempts. These are aimed at making your credit score better.

Ensure that you start making timely payments on all your bills. Do this before you apply for the new loan.

You have to stop stressing about the bad credit record. It’s fine that you made wrong choices concerning your finances. All you should do is rectify them step by step.

Avoid applying for several credit options. By now you are aware of the consequences of such actions.

Ensure that you keep consistency as you follow the above-mentioned strategies.

In conclusion, ensure that you always evaluate all available loan options. That should be before you apply for any loan. You need to try and find a moneylender who understands your needs. Importantly ensure the lender is certified.

How To Deal With Loan Sharks

If you have had trouble in the past dealing with loan sharks. Being pressured by fraudulent lenders can be stressful. This is especially on a financial level. This article will look at some guides on the basics of handling loan sharks.

In Singapore, loan sharks are unlicensed moneylenders. These lenders usually illegally offer personal loans. They mostly provide loan money using unfair terms. This includes things like exorbitant interests.

Since loan sharks are not bound by law. They often tend to be unscrupulous. Loan sharks even use violent harassment methods. This is a way to make you pay back your debt.

Ways of Spotting a Loan Shark

Usually, loan sharks start out by being friendly. When you continue to promptly make repayments. They could stay this way. However, the reality remains. Even when you do, all the loans you take often come at high a price. To help you spot a loan shark, you will notice:

  • Your debt has increased or they might add extra charges without notice.
  • These lenders provide almost no paperwork. This is documents like loan agreement and also a record of payments.
  • They get nasty towards you. These lenders might turn to threats, intimidation, or even violence.
  • Loan sharks refuse to offer you important information. This information like interest rates and the amount you currently owe.
  • They might even refuse to let you settle your debt
  • They could take items as collateral. Things like bank cards, passports, or even a driving license

Dealing With Loan Sharks

Below listed are ways for you to deal with loan sharks.s

Report your Situation to Proper Authorities

The dealings of loan sharks are prohibited by law. Therefore, the next logical move is to report them to relevant authorities. Be sure to give details of who this loan shark is.

Explain also how this lender operates. When you have records of previous transactions made with this loan shark. It will greatly help in the investigations. Ensure that all the details you know, you let the authorities know also.

Avoid Dealing With This Lender

When it happens that you have not to date made deals with loan sharks. It is recommended that you keep it that way. It is not easy trusting loan sharks.

Regardless of how need and desperate you are. Keep in mind to never get personal loans from the loan sharks. The one rule when dealing with loan sharks is. Stay away at all costs from the loan sharks. Besides, it is better to be safe than sorry.

Keep Your Cool

The first step you need to take is to stay calm. Do not panic. It is not a good idea to let a loan shark see this. Even when you already are aware that they are attempting to victimize you. You could be risking yourself and get into more problems than you are in.

Confirm the Lender’s Credibility

Often, borrowers fail to confirm whether their moneylender is accredited. This is simply because their operations appear legitimate. Consider this carefully because most loan sharks appear as legitimate money lenders. But this is only for appearances. However, upon further inspection. It will be revealed that they are fraudulent lenders.

The first thing to do is identify whether they are certified. A legal and reliable lender holds a government-issued license. The license allows them to operate a lending business. When the moneylender has no license, consider it your red flag. Therefore, do not transact with them.

But, if you already have borrowed money. Then you realize this rather late that this moneylender is an illegal lender. You are still able to get out of this situation unhurt. When you already have fallen victim to the illegal money lenders. Do not give up yet. There is still some hope for you.

Stop Payments and Do Not Yield to their Threats

As soon as you have reported your situation to the right authorities. You may now safely stop making payments on your debt. Since loan sharks operate unlawfully. It means that they legally not allowed to lend money. Neither should they be receiving repayments from debtors. Get informed regarding your rights and the law. Then you can use it against these lenders.

Report Any Pressure And Further Threats

Loan sharks could resort to making threats and pressuring you. Even then do not yield to these threats. You should also immediately report them to authorities. This will help your case since any more threats can serve as evidence.

Consult a Financial Adviser

It is a good practice to consult a certified financial adviser. This will be useful for you in future. In doing this, you do not face the risk of dealing with loan sharks. Additionally, you get to learn much better methods of getting loans.

Who Loan Sharks’ Often Target

The rise in living expenses in Singapore has contributed to need for loans. The ongoing need for low-interest personal loans is on the increase. The possibility that you might get caught in loan shark traps is on the increase. It just happens that loan sharks will always look for ways to contact borrowers.

These lenders target those individuals with low income. These individuals also struggle to get a personal loan from legal sources. These lenders aim at reaching borrowers who desperately need loans. Loan sharks offer fake support for their borrowers on the initial meeting.

Though people use personal loans to enhance their financial situation. They are not aware of what a loan shark is capable of. Typically, loan sharks appear to be friendly at the initial meeting. However, their behaviour quickly changes into intimidation and threats. It at times can escalate to violence.

How To Confirm If a Lender Is Legal

The Moneylenders Registry keeps an up-to-date full list of all licensed moneylenders. They usually have the list posted on their official website. When a moneylender does not appear on the list. Do not borrow from them. Also, you should not let them visit your home. Always take the time to check a lenders license. Be sure to confirm that it is valid.